Accounting and Taxation advice in Hexham, Northumberland

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Thoughts for the week ending 5th June

Hi folks!

I hope you’re all looking forward to the family barbecue this weekend. I’m hoping for good weather, as having done many barbecues with an umbrella in the past - it’s not too bad if only the barbecue is under the umbrella, but if everybody else has to be as well it can be a little bit miserable!

The challenge with these events (if I can get back to basics) is, I suspect, going to be the toilet issue. That takes me back to a party that I organised in that very hot summer of 1976 in my parents’ rather lovely garden. Those of you who are old enough to remember will recall hot days that went on and on.  At the time I was living in Wales and we were on water rationing. Shortly after issuing the invitations to the party I had to alter them to not only it being a ‘bring a bottle’ party (I was a poor student at the time) but ‘bring a bottle and an Elsan’ (the precursor of the Porta Potty - basically a large can with the toilet seat on it with chemical stuff in it) party. In the event, they appointed a Minister for Drought the day before the party and the rain started to pour so me and my then wonderful boyfriend, now husband (long-suffering as he has been, since we were married a few years later) spent the whole party moving full ‘Elsans’ from inside the house to replace them with empty ones from outbuildings as nobody was going out in the rain.

I am wondering whether we’re going to see a growth business of the Porta Potties and Toilet Tents of nowadays (rather than Elsans), in that you’re actually going to need to take one with you when you go to a small gathering so that we don’t breach any of the contact rules. Perhaps that’s a business opportunity for someone, particularly as I haven’t seen the Toilet Tent for years?!

On to more technical stuff.

On Monday, we sent you the latest information issued by the government on Friday 29th May, in respect of both furlough and the self-employed income support scheme (SEISS). Now that we have had a chance to properly study these, there are just a couple of things I want to bring to your attention:

 

Furlough

You need to consider very seriously who you might want to furlough between now and the end of October, particularly bearing in mind that furlough can be part-time with effect from the beginning of July.  From 1st July you can only claim going forwards if the employee has previously been furloughed.  Therefore if you have somebody that hasn’t previously been furloughed, but you may want them to be in the future, you need to furlough them now and have them on furlough for at least three weeks before the end of June, so the latest date they could start furlough would be Wednesday 10th June.

The new furlough rules are a new furlough scheme so you need to make sure that existing furlough claims are completed before the closing date of the existing scheme which is 31st July. In respect of getting your claims up-to-date bear in mind that you can make a claim to furlough as frequently as once a week now.

Despite the announcement from HMRC a couple of weeks ago, that they were going to introduce changes to the furlough claim system so that previous claims could be amended, there is still no further news on this. 

 

SEISS

The second tranche of support for the self-employed will not, unlike the first, be the subject of a notification from HMRC. You will need to go on to your government gateway to claim it. We don’t have a date from which that 2nd claim will be possible as yet, but your first claim for March to May must be made by 13th July when the portal will close.  The challenge is that you will be asked to make the same declaration as you did for the first claim - which is to say that you are intending to run the self-employed business in 2020/21, and that you have been adversely affected by coronavirus. Claims that are made spuriously will be the subject of reclaim and penalty by HMRC.

Just to remind you that income received under this grant will be subject to both tax and class 4 national insurance, but is outside the scope of VAT.

More information about both furlough and the self-employed income support scheme will be provided by the government on Friday 12th of June, and therefore we will be in touch with you week commencing Monday 15th of June.

 

Mortgage payment holiday extension

The Financial Conduct Authority has released a statement confirming that the mortgage payment extension will go ahead as per the draft guidance i.e. to 31st October. Part payments are a possibility, and credit ratings won’t be negatively affected.
If you haven’t had a payment holiday yet, you have until 31st October to request one. See more information by following this link to the Financial Conduct Authority’s website:
https://www.fca.org.uk/news/press-releases/fca-confirms-support-customers-who-are-struggling-pay-their-mortgage-due-coronavirus

 

VAT deferral of payments

VAT payments that fall between 20 March and 30 June 2020 can be deferred, but some people did not manage to cancel their direct debit in time and therefore the payment was taken.  HMRC have just confirmed that a refund is now available.  The quickest way to get the refund is to contact your bank and submit a direct debit indemnity claim and state that you want a refund under the Direct Debit Indemnity Scheme (DDI).  There is no time limit for making this claim.  Alternatively, you can contact HMRC directly, but this will take up to 21 days and you must make sure that your bank details are up to date using online services, as payable orders are not currently being issued by HMRC.

To have your VAT payments taken as usual after 30 June 2020, you must re-instate your direct debit.  But be careful!  The Institute of Accountants in England And Wales (ICAEW) are currently awaiting confirmation from HMRC that reinstating the direct debit will not result in the deferred VAT being collected immediately.  So please do not re-instate your direct debit until you really need to, or until we’ve heard more from ICAEW.  We’ll keep you updated on this topic.


Test and trace

We are hoping for more information about the practicalities of this scheme from the government and this will feature in ‘Thoughts’ once we have them.

Economic outlook

Oxford Economics are saying that they believe ‘the dip will be deep but brief’ in terms of the economic impact of COVID-19.

Statutory residence test

Good news for employees within the NHS that they will not be penalised for falling foul of the statutory residence test as a result of working on the front line. There is no similar relief for people who are stuck in the UK as a result of lockdown who normally work abroad. There will therefore be some nasty tax bills arising where people have chosen to return to the UK who would normally have been working abroad.

Working from home

Don’t forget if you’re working from home and your employer doesn’t pay you an allowance, you can claim up to £6 a week in respect of the expenses that you are incurring as a result of your homework location.

Enjoy your social distancing barbecue in the rain won’t you!
Until next week.

Keep well.
Tricia

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