Accounting and Taxation advice in Hexham, Northumberland

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Thoughts Friday 13th November 2020

Hi folks,

The possibility of a vaccine – hurrah – maybe life will return to normal, eventually! (Fingers crossed)

The first weekend of this lockdown may have been dominated by the mists of November, a big contrast to the sunshine we had in March, but we had some Good News for our beleaguered planet. The good news is that we have a proper democrat back in the presidency of (whether we like it or not) probably the most influential nation in the world. By democrat, I am not referring to the American political party but the true sense of the concept of universal suffrage - democrat with a small d in the same sense as we can use catholic, meaning all embracing, with a small c.

Coincidently, in an attempt to find something worth watching on the television because I won’t pay for television (except the licence fee), I ended up watching the 1963 version of ‘The Spy Who Came In from the Cold’.  It did make me realise the true meaning of democracy in that in 1963 when this film was made, just a couple of years after the Berlin Wall had gone up, that you could still be a member of the Communist Party in Great Britain. We even had a communist newspaper, ‘The Morning Star’, published alongside ‘The Times’ in Fleet Street at the time.

There we were with the possibility of a four-minute warning of the enemy at the gate, yet we were quite happy for the enemy to exist within a political establishment. That is what I call DEMOCRACY!

Democracy may well, just as in Churchill’s day, be the worst way to run a government, but as he continued to say it is the only way there is. No doubt because it is the only way that you can truly respect the views of somebody else.  As Margaret Thatcher said, quoting Voltaire, “I disapprove of what you say, but I will defend to the death your right to say it”.  The statement is in fact a mis-attribution and was actually written by Evelyn Beatrice Hall in 1906. You see that women have it all the way!

So perhaps my criticism of the press last week was a little strong. It is up to us to assess whether the press are saying sensible things or not, so the American people have managed to create a triumph of democracy and we as a nation probably need to create a triumph of common sense by not listening to media hype but making up our own minds about the big decisions of life.

So let’s stay at home, protect the NHS, and save lives - you know it makes sense!

Other good news in lockdown - Rupert Bear is 100! I have to confess to never having been convinced by Rupert Bear (something to do with the doggerel verse and the yellow and black trousers I think!) but nevertheless 100 years of existence has to be something to celebrate. Maybe I should find out when Paddington Bear is going to have a big birthday????


Coronavirus Job Retention Scheme (CJRS)

The CJRS or furlough scheme has been extended until 31st March 2021.  From 1st November 2020 CJRS will pay up to 80% of an employee’s usual pay for the hours not worked, up to £2,500 a month.  Employers will need to fund the employer’s NI and employer’s pension contributions.  The CJRS will be reviewed in January, which may result in the 80% being reduced.

Neither the employee nor the employer needs to have used the scheme previously to claim a grant under the extended scheme. However, the employee must have been on the employer’s payroll at 23.59 on 30th October 2020 and an RTI submission needs to be made in respect of the employee by that date. The maximum employee cap that applied before 31 October 2020 does not apply from 1 November onwards.

Employees who were on the payroll on 23rd September 2020 and in respect of whom an RTI submission has been made, and who stopped working for the employer or have been made redundant after that date, can also qualify for the scheme if their employer re-employs them.  However, the employer will need to pay the employer NI and pension contributions which may be a stumbling block unless an agreement can be reached.

There is no minimum furlough period, and full furlough (where the employee doesn’t work at all) or flexible furlough (where the employee works some of their usual hours) is allowed. Employees furloughed can still volunteer for other organisations or employers, work for another employer, or take part in training.  Furlough or a change of hours should still comply with employment law and written agreements will be required.

The overall mechanism for making a claim remains the same. CJRS claims for October must still be submitted by 30th November 2020.  Claims for 1 November onwards opened on 11 November, and monthly claims must now be submitted by 14th of the following month – so November claims must be submitted by 14 December.  However, if the 14th lands on a weekend, then the deadline is the next weekday.  Claims must be for a minimum period of 7 days, and cannot cover more than one calendar month.  You should keep clear records of how you have calculated your claim, the hours worked by the employee and the number of hours furloughed.

HMRC intends to publish the details of employers who use the scheme for claim periods from December, so that employees will be able to find out if their employer has claimed under the scheme.  This is clearly to encourage the whistle-blowing of employers who are claiming furlough and are not entitled to do so.

The CJRS extension is more favourable for annually paid directors of owner managed companies.  If a director received their annual pay after 19 March 2020 for 2019/20 then they were excluded from previous furlough schemes.  However, now that the earnings reported from 20 March to 30 October 2020 can be claimed, these directors will now be able to claim.  However, the difficulty in evidencing usual hours may still provide issues and headaches!

The Job Retention Bonus has been postponed and an alternative retention incentive will be put in place at the appropriate time.  

The Job Support Scheme (JSS), the replacement of CJRS, has also been postponed.

There is a lot of information on how to calculate a claim – too much to include here!  I have, therefore, put some useful HMRC links  below.  If you need any assistance please contact us.

     Links to various guidance on CJRS:-   

https://www.gov.uk/government/collections/coronavirus-job-retention-scheme

     Steps to take before calculating your claim:-    

https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme

     Calculating the amount to claim, including a link to the calculator tool:-    

https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme


Self-Employment Income Support Scheme (SEISS)

There is no further information to add at this stage from the information provided in last week’s ‘Thoughts’.  Claims for the November to January period open on 30 November and we are expecting more information to be released nearer the time.  We will be sending eligible clients a personalised email letting them know how much they can expect to claim and how to claim, as we have for previous SEISS grants.


Self-assessment late filing penalties for 2018/19 tax returns

HMRC have announced that it will not charge daily penalties in respect of 2018/19 tax returns due to the coronavirus pandemic.  Daily penalties are £10 per day and accrue from 1 May 2020 for 90 days or until the return was submitted, and therefore maximum penalty is £900.  This 90 day period coincides with the height of the coronavirus pandemic when taxpayers may not have had access to all of their papers or been able to get the information they needed from third parties.  If you have received any daily late filing penalties in respect of the 2018/19 tax return, you should contact HMRC and ask for them to be cancelled.

To appeal a penalty, you should either call HMRC on 0300 200 3310, or complete form SA370 and post it to HMRC.  A link to form SA370 is below:

https://www.gov.uk/government/publications/self-assessment-appeal-against-penalties-for-late-filing-and-late-payment-sa370


A couple of other things…

This last year may have made many of us think about re-drafting our Wills. I’ve certainly had a look at mine. There is a mechanism now to enable witnessing to be done remotely which does mean that you can revise your Will even if you’re not prepared to have a face-to-face meeting with somebody at finalisation.

The lockdown scammers are at it again. We’ve had a few which say they’re having difficulty unsubscribing us.  Presumably it’s a way of pulling you in?

Finally, reverting to my comments of the use of words with small or CAPITAL letters at the start of this piece, I feel that Downing Street could benefit from a bit less ‘politics’ of the office variety at the moment. Journalistic comment seems determined to show this as a battle of the sexes. Are the ladies winning do we think?

Keep well

Tricia

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