Accounting and Taxation advice in Hexham, Northumberland

More...

Thoughts for the week ending 26th June

Hi folks,
I hadn’t realised until a reporter mentioned it that this Tuesday’s announcement was actually three months from the first lockdown announcement when we were asked to accept lock down measures for three weeks!

An awful lot of water has gone under the metaphorical bridge since then!

They say time flies when you’re enjoying yourself!

The good news is that most of us are still here. The sad news is that a lot of us have lost somebody at least within our broader acquaintance and some of us have lost somebody very dear.

THE PUB

I wonder what it’s going to feel like going to the pub on the 4th of July? It will be quite interesting to see how organisations adapt. Are we all going to be asked to drink with our backs to each other? Or are venues going to be segregated into booths in which households can congregate? Are we going to have to order our drinks and food by mobile app? I think I might be leaving things to settle for a while before venturing into what will no doubt feel quite a strange environment. I suspect I will be limiting myself to a pint in a beer garden!

It’s not all that many years ago that if you wanted to actually go out with your children, the beer garden was largely the only place that you could make use of anyway. It’s still the case with our dogs in many establishments so perhaps I will be in my natural habitat.

ECONOMIC OUTLOOK

NatWest bank‘s latest review on the economy is that small businesses are more optimistic than they were a few weeks ago in thinking perhaps the worst is behind us. The other side of the coin is that those same small businesses have allegedly had to raid their savings to keep afloat and that many small businesses are going to find opening up under coronavirus restrictions costly and difficult.

The Telegraph’s economic pundit is predicting that substantial growth will return in the third quarter which will help stabilise the economy.

HMRC and the Treasury have been warned that a VAT rate cut is going to be necessary to help the economy rebound after the pandemic.

The truth is it’s such a long time since we’ve faced issues like these that everybody is guessing. Only time will tell who is right.  

TEST AND TRACE

As of Tuesday 88,000 people were self-isolating due to Test and Trace. On the same day, apparently, there was 1 case per 1,750 people in the population. So, in our UK population of 65million that means about 37,000 people are infected and we have 88,000 people self- isolating. Given that very few of us are going within 2 metres of anyone at the moment I feel that, for the second week of Test and Trace, its going pretty well. Apologies I’m a bit ’into’ the statistics of all of this!

HMRC

One of the contributors to the technical journals I read, who is normally fairly negative about HMRC, has a story this week of a taxi driver (the first taxi ride he has taken for ages) who apparently voluntarily told him how wonderful he thought the HMRC were because of his self-employed grant. Not sure whether that’s a good thing in terms of people taking a more positive attitude towards taxation or whether it’s a bad thing because it will lure people into a false sense of security. HMRC are their friends!

ON TO TECHNICAL POINTS

Businesses are being warned to be careful where they’re in receipt of furlough payments and are looking to defer PAYE with a payment arrangement. HMRC are of the opinion that part of the payment within the furlough scheme is precisely to pay that tax, so it might make it more difficult to enter into such an arrangement.

VAT payments for 31 May 2020 VAT returns are payable by 7 July as the VAT payment holiday window ends on 30 June. If you are going to struggle to meet your VAT payment please contact HMRC’s Payment Support Service (PSS), ideally before the VAT is due for payment, as any time to pay agreement won’t be subject to a default surcharge. You will need your VAT number and bank account details to hand when you call, and will need to know the amount of VAT that is outstanding, and how you propose to settle the arrears. Making a partial payment on time would put you in good stead with HMRC, rather than no payment at all, - if you can manage it. HMRC have also added coronavirus as a “reasonable excuse” for missing tax obligations.

The current furlough scheme ends on 30 June with the revised flexible scheme starting on 1 July.  You have until 31 July to make a furlough claim up to 30 June.  My “Thoughts” last week included more detail on the revised furlough scheme.

HMRC have given clarity about tax refunds for corporate losses and anticipated losses - good news for those in the corporate sector. See the article from ICAEW: https://www.icaew.com/insights/tax-news/2020/may-2020/covid19-icaew-urges-for-clarity-over-qips-repayments

and this from HMRC: https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm92650

 

Some other interesting links

I’ve listed here a few other links which I think are interesting, as much in terms of what they don’t say as what they do, with regard to the guidance businesses are being given:

 

FUTURE THOUGHTS

Coronavirus briefings ceased on Tuesday, three months after they started, so I’m actually going to get my evenings back, but I suggest it’s going to be more difficult to filter the facts from the journalistic take on things without this daily grounding in government policy.

The three-month stage would seem a sensible point at which to draw a line under these ‘Thoughts’, however I feel that there are going to be quite a lot of technical issues arising from the new furlough and the new self-employed grant that are going to be of interest over the next weeks and months, in addition to any comments or reflections on how the economy is opening up and what that looks like from both the commercial and a personal point of view.

I’m therefore proposing to continue with the weekly ‘Thoughts’ for a few more weeks at least.

Keep well and enjoy what will be our newfound freedom.

Regards
Tricia

Latest News

Thoughts for the week ending 7th August

Hi folks,There was a headline in the Times on Tuesday - “POETRY IS A CORONAVIRUS… more >

MAKING TAX DIGITAL (MTD)

Are you ready?

You may well need to prepare your business for this fundamental HMRC change to the tax system.... more >

About Us

Meet the team

Patricia J Arnold & Co Ltd was founded in 1985 to provide accounting and taxation advice... more >

Services

Services

We provide a professional and friendly service tailored to individuals, partnerships... more >