Accounting and Taxation advice in Hexham, Northumberland


Thoughts Friday 20th November 2020

Hi folks,

I’ve been reflecting on the impact of the Government‘s announcement that was leaked on Saturday 31st October as I believe we can now see the disastrous effect of the leak on the Covid figures. Well I can only hope that the impact of lockdown will at least get us back to where we were before the BBC decided to spill the beans.

Lockdown has had the effect of making me busier than ever and so I have decided to trim the pile of books beside my bed that I’m going to reread. One of them is ‘The Warden’. For those of you have who not read it, it’s the first of Anthony Trollope’s Chronicles of Barsetshire series published in 1855. If you get a chance, if lockdown happens to be creating time rather than jobs for you to do, I recommend you read it. You will then appreciate that there is nothing new in press, - 165 years ago Trollope was complaining about exactly the same things as I am now.

Self-Employment Income Support Scheme (SEISS)

In October HMRC emailed around 24,000 SEISS claimants where it held information suggesting that they had ceased trading.  Anybody who received this email must respond by Friday 20th November using the form on the link below:

If you received the email from HMRC you must respond, even if you have not ceased to trade.  If you do not respond then you will not be able to make further claims of the grant.  Once submitted, HMRC will contact you within 60 days to either ask for more information or to pay any amount due.  If you miss the 20th November deadline, then please submit the form anyway – better late than never!

If you did not receive the email from HMRC then you do not need to respond. However if you have ceased trading, and are therefore not eligible for the SEISS grant, you should tell HMRC within 90 days of receiving the grant.

SEISS version 3 starts accepting claims from 30th November.  The last two weeks’ ‘Thoughts’ have included details of this, and more information is expected about the claims process next week which I will include in next week’s ‘Thoughts’.

Coronavirus Job Retention Scheme (CJRS)

I won’t re-iterate previous ‘Thoughts’, but I haven’t mentioned the “usual pay” that the 80% furlough should be based on from 1st November 2020.  The reference to “usual” pay is used by HMRC, and this will depend on whether you have previously been furloughed.  If you are on a fixed salary, and a payroll submission for your current employment was made before 20th March 2020, then you should still use that salary as your usual salary.  If you have joined the payroll since 20th March 2020, but before 30th October, then your reference period is the last payroll submission made before 30th October.  The following is a good example:

Anna has worked for X Ltd for many years on a fixed salary of £24k and was furloughed between March and July 2020.  In September she received a pay increase to £25k.

Bernard has also worked for X Ltd for many years on a fixed salary of £24k but was not furloughed earlier in the year. In September he received a pay increase to £25k.

Carl started to work for X Ltd in September on a fixed salary of £25k and payroll submissions were made on 30th September and 31st October.

In this example, Anna and Bernard will receive furlough based on a usual pay of £24k, but Carl will receive furlough based on a usual pay of £25k.
Full details on how to work out the furlough amount is on the HMRC link below:

Making Tax Digital - update

HMRC published a consultation document last week on Making Tax Digital (MTD) for corporation tax (CT).  HMRC proposes commencing a voluntary pilot for MTD for CT in April 2024 with mandation from 2026 at the earliest. MTD for CT would require entities to maintain their records digitally, submit quarterly returns of income and expenditure through MTD compatible software, and submit the annual CT return using that software.  This announcement comes after it was confirmed in the summer that MTD for VAT would be mandatory for all VAT registered businesses from April 2022 (currently it is only those businesses that are not voluntarily registered), and MTD for income tax would be compulsory for most self-employed businesses from April 2023.  We will be contacting our clients on an individual basis in good time to ensure that they are prepared for whatever form of MTD affects them.

I will end with the progressive headline that Saudi Arabia have this year established a woman’s football league, less than two years after first allowing women into stadiums to watch a match. Great news!

Stay well as always

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