I had a perfect introduction to this edition of my ‘Thoughts’ which I drafted a couple of weeks ago, but the events of Saturday rather overshadowed it.
I have over most of my life been a great admirer of the BBC but I was not an admirer of the actions that were taken on Saturday - investigative journalism my ****! This is nothing like Woodward and Bernstein and Watergate. In fact, what was being said wasn’t really news, it was just bringing forward an event that was going to happen three days later - putting our already beleaguered Government to a lot of unnecessary work and, if Monday’s Today programme is to be believed, not giving them proper preparation time to enable them to get their graphs sorted out.
I’m not necessarily the greatest fan of Mr Johnson, but I have to say that I’ve put myself in his shoes and if somebody asked me to bring forward a major presentation (and mine have only ever been to at most 250 people rather than around 64 million) by three days, I think you might have had me in a straitjacket. I think the Government did a great job under the circumstances and I think that all the BBC have managed to do is actually ensure that the spread of coronavirus is greater than it would have been had this announcement been made on Monday as planned, rather than on Saturday, giving people a weekend of going on the razzle before they were going to get locked down.
Rant over. Apologies to those who are feeling I’m being rather harsh.
Needless to say we will be doing our bit and whilst Patricia J Arnold and Co will be open to clients to accept deliveries of accounts and tax return information and answer phone calls and emails, we will be reducing the number of staff trips to the office over the next month. In line with Government advice, those of us who can effectively work from home will do so in order to try and reduce the amount of travelling everybody does. There will however be sufficient stalwarts actually at West Orchard House to make sure the right person deals with your queries as quickly as possible. Note for clients here: If we are awaiting your accounts or tax return information, please bring them in. Inevitably things are taking a bit longer than usual this year so the sooner the better.
The self-assessment (SA) deadline remains the same, and 2019/20 income tax returns should still be filed by 31st January 2021. However, there are discussions in the accountancy profession regarding whether this deadline should be pushed back. As a profession I believe we definitely don’t want the SA deadline pushed back as it just prolongs a stressful time of the year. If the deadline was moved to 28th February 2021 for example, for some tax payers it will just mean that instead of getting their records to their accountant at the 11th hour in January, they will get the records at the 11th hour in February instead! There are also several legal changes required to move the date, such as gift aid carry back, payment dates, enquiry deadlines, etc. In my view the better solution would be to waive late filing penalties.
The Institute of Chartered Accountants in England and Wales (ICAEW) has an online survey (one question only!) where you can have your say regarding whether to extend the SA deadline, waive late filing penalties, or something else. The survey is open to everyone, not just ICAEW members, and I have included the link to the ICAEW article on the subject below:
The actual link to the survey can be found at the bottom of that article.
The Federation of Small Businesses had commented that they were optimistic for quarter three but these have been revised downwards following last Saturday’s announcement.
We do now have a raft of new financial support due to come in. We will concentrate on the most relevant ones for TODAY. For example, I will not be mentioning the Job Support Scheme (JSS) which has now been postponed until at least 3rd December. I do get the feeling that perhaps the Treasury would benefit from the words of wisdom used by my house master at school. Vis “Patricia - no FINAL DECISIONS after 10.30 at night”. We are all very grateful for the imaginative ideas that have been put into practice to help people survive the economic rigours of the pandemic but perhaps too many ideas are too much of a good thing?
Further to the announcement on 31st October, the Government announced yesterday (5th November) that CJRS or furlough scheme would not finish as planned on 31st October but continue until 31st March 2021. The Job Support Scheme (JSS), which was due to replace CJRS from 1st November, will be delayed until the end of this next lockdown period in December. The JSS was less generous than CJRS and required employees to work at least 20% of their usual hours.
The CJRS from 1st November 2020 will revert back to the rules in August where the Government 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 but clearly it will depend on the situation businesses are in at the time.
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. 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.
It's important that CJRS claims for October are still submitted by 30th November 2020. Claims for 1st November onwards can be made from 11th November, and full guidance on November claims and how to calculate a claim will be available on Tuesday 10th November.
The Job Retention Bonus covering November, December and January, with the bonus claimable from 15th February, has now been postponed following the Chancellors extension of the furlough scheme to 31st March 2021. This is not surprising given that the government could potentially be paying for employees to be retained in their jobs, only for employers to claim the bonus when they haven’t contributed to the employee’s wages during that period. The Chancellor said that the retention incentive would be redeployed when the time was right.
This scheme has changed three times in the last two weeks alone!! The third SEISS grant that covers the period from November 2020 to January 2021 inclusive will now pay 80% of average trading profits, capped at £7,500. This has increased over the last two weeks from 20%, to 40%, to 55% to the current 80%! Applications for this grant will now start from 30th November, instead of 14th December. The details of the fourth grant covering February to April 2021 will be announced closer to February. We will of course keep you updated on how to claim, and clients who are eligible for the grant will receive an individual email for their situation.
HMRC is also beginning to do SEISS post claim eligibility checks on the first two grants. If you get one of these you have got 90 days to respond. Please do not ignore it.
Businesses in England that are required to close as a result of local or national restrictions will be eligible for the following grants:
* properties with a rateable value of £15,000 or under – a grant of £1,334 per month or £667 per two-week period;
* properties with a rateable value of between £15,000 and £51,000 – a grant of £2,000 per month or £1,000 per two-week period;
* properties with a rateable value of £51,000 or over – a grant of £3,000 per month or £1,500 per two-week period.
The deadline for applying for finance under the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Future Fund has been extended again, from 30th November 2020 to 31st January 2020.
In March the Government suspended the minimum income floor (MIF) for Universal Credit from 6th April until 12th November 2020. This has now been extended until 30th April 2021. This means that you don’t need to earn a minimum amount before you can claim Universal Credit.
The October edition of HMRC’s Employers Bulletin is now available and can be found on the link here:
It is a useful round up of the issues of which employers need to be aware. Included in October’s edition is that employers can now check if they are claiming the Employment Allowance through their business tax account. On the main page on the business tax account, click on “Employment Allowance status” and you will be able to see if it has been claimed or not.
HMRC are carrying on with business as usual and there has been a flurry of letters to clients regarding potential under-reporting of overseas matters. In our experience, very often these are things that have no reporting requirement but one still has to jump through the hoops to satisfy HMRC. If you’ve got one of these letters, let us know and we’ll see what we can do.
On 24th October we apparently had 100 days to complete our tax returns. This is the time of year when the fraudsters bombard people with false offers and false links so BEWARE!
It looks like we may have a change in the White House but there is still a long way to go. The contrast in the candidates can be summed up here: Joe Biden said of the division on Wednesday, in a statesmen-like manner: “I know how deep and hard the opposing views are in our country on so many things. But I also know this, as well. To make progress, we have to stop treating our opponents as enemies. We are not enemies. What brings us together as Americans is so much stronger than anything that can tear us apart”. Trump’s view of the rivalry? “If you count the legal votes, I win."
If your mind is turning to the festive season (it may at least provide some escapism!), ICAEW has issued some guidance on the tax impact of any festive plans that employers may be considering. Whilst pointing out some perhaps unwanted tax consequences of certain gifts and activities, (bah humbug!), it does also provide a small amount of inspiration on how the traditional office party could be substituted in a Covid-secure manner! I can’t think of anything worse than a ‘Virtual Christmas Party’ but then those of you who know me well will know that I don’t like face-to-face ones much either! But for what it is worth, here’s a link to the advice:
The above measures were correct at the time of writing. However, the Government is making new announcements daily and so, as such, I am planning to revert back to publishing my ‘Thoughts’ each Friday again for a while. You can also check www.gov.uk for the latest information.