Author Archive

More on extended furlough scheme

Wednesday, December 2nd, 2020

Most employers who are eligible will be aware that the furlough scheme (the Coronavirus Job Retention Scheme) has been extended for five months – from 1 November 2020 to 31 March 2021.

The general terms for the first quarter to 31 January 2021 are:

  • Maximum claim per employee is 80% of hours not worked.
  • Furlough claims will be capped at £2,500 per employee per month for hours not worked.
  • Employers will remain responsible for paying for any hours worked, albeit on a flexible basis, and for any pension and National Insurance costs.
  • Employers can top-up wages for hours not worked at their discretion.

This is a welcome extension for many businesses that were facing difficult choices as the previous furlough scheme ended 31 October 2020.

 

Readers should note that the amounts of government support – 80% capped at £2,500 for hours not worked – only applies to 31 January 2021. During January, these rates may be changed, and much will depend on the economic challenges at that time. We will of course publish any changes announced in the new year.

Employers claiming under the new scheme should also note:

  • The previously announced £1,000 Job Retention Bonus has been withdrawn now that the furlough scheme is extended to 31 March 2021.
  • One condition of the new scheme is that employers accept that HMRC will publish information about their claim on the internet. This will include the name of the employer and a reasonable indication of the amount claimed.
  • Furlough agreements must be in place before the start of a claims period. These agreements can be subsequently varied.
  • Claims cannot be made if an employee is serving a notice period between 1 December 2020 and 31 January 2021.

Source: New feed

Self-Assessment filing deadline draws near

Wednesday, December 2nd, 2020

If you have still not submitted all of the information we need to complete your 2019-20 tax return, could we ask you to respond as soon as you can as the deadline is fast approaching – 31 January 2021.

HMRC has made no announcement that this deadline will be extended. Accordingly, the initial £100 late filing penalty will apply to any 2019-20 return filed electronically after 31 January 2021.

If you are having difficulties tracking down information, lost P60s etc, please call so that we can agree on a strategy to secure the missing data.

None of us need any additional pressure at this point in time as we all grapple with the effects of COVID disruption. However, we hope you can respond to this request – if it applies to you – in good faith and in the knowledge that our first priority is to keep you compliant and to avoid penalties.

Finally, can we thank readers who have supplied the required tax return information prior to this reminder.

Source: New feed

Trivial benefits are not so trivial

Wednesday, December 2nd, 2020

A reminder that It is possible to make small tax-free payments to employees, including directors, and this might be an appropriate time to make a small tax-free bonus in advance of the annual Christmas, New Year holidays.

Employers and employees don’t have to pay tax on small benefits provided they comply with the following rules:

  • it cost you £50 or less to provide,
  • it isn’t cash or a cash voucher,
  • it isn’t a reward for work or performance related activity
  • it isn’t in the terms of an employees’ contract.

HMRC describes these payments as a ‘trivial benefit’. Based on the national mood following months of COVID disruption, these so-called trivial benefits now seem a possible means to spread a little good cheer.

A word of caution

Where the employer is a close company, and the benefit is provided to an individual who is a director or other office holder of the company (or a member of their family or household) the exemption is capped at a total cost of £300 in the tax year.

Secondly, if you provide a benefit to a group of employees and it is impractical to work out the exact cost per head, then it is acceptable to average the cost per employee.

Source: New feed

Customs changes from 1 January 2021

Wednesday, December 2nd, 2020

Most smaller businesses will not have the resources to train and employ their own customs clearance staff in which case you may have to consider using a customs agent or broker. We have reproduced the advice on the GOV.UK website on this critical issue below.

If you do import or export goods from and to the EU you could consider one of the options that follow:

You can hire a person or business to deal with customs for you, such as:

  • freight forwarders
  • customs agents or brokers
  • fast parcel operators

What they can do for you (and who will be liable) depends on:

  • the services they provide
  • what you want them to do
  • the commercial agreement you have with them

They can act for you either as a:

  • direct representative
  • Indirect representative

They cannot act on your behalf without written instructions from you. The instruction must show whether they’re acting for you directly or indirectly. HMRC will only ask for evidence of the authorisation when required.

Freight forwarders

Freight forwarders move goods around the world for importers.

A freight forwarder will arrange clearing your goods through customs. They’ll have the right software to communicate with HMRC’s systems.

Customs agent or broker

Customs agents and brokers make sure your goods clear through customs.

Fast parcel operators

Fast parcel operators transport documents, parcels and freight across the world in a specific time frame. They can deal with customs for you, as part of their delivery.

Source: New feed

Tax Diary December 2020/January 2021

Wednesday, December 2nd, 2020

1 December 2020 – Due date for Corporation Tax payable for the year ended 28 February 2020.

19 December 2020 – PAYE and NIC deductions due for month ended 5 December 2020. (If you pay your tax electronically the due date is 22 December 2020)

19 December 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2020.

19 December 2020 – CIS tax deducted for the month ended 5 December 2020 is payable by today.

30 December 2020 – Deadline for filing 2019-20 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2021-22.

1 January 2021 – Due date for Corporation Tax due for the year ended 31 March 2020.

19 January 2021 – PAYE and NIC deductions due for month ended 5 January 2021. (If you pay your tax electronically the due date is 22 January 2021)

19 January 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2021.

19 January 2021 – CIS tax deducted for the month ended 5 January 2021 is payable by today.

31 January 2021 – Last day to file 2019-20 self-assessment tax returns online.

31 January 2021 – Balance of self-assessment tax owing for 2019-20 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2020-21.

Source: New feed

Employers note increase in National Living Wage

Tuesday, December 1st, 2020

The Chancellor, Rishi Sunak, confirmed a small increase in the National Living Wage rates from April 2021.

Employers will need to diarise these increases otherwise they may break their obligation to pay these rates and risk penalties.

The increase in the NLW will mean that low-paid workers’ incomes rise broadly in line with predicted wage growth; and modestly ahead of projected increases in prices, meaning low-paid workers’ living standards should be protected. Commissioners do not believe the increase presents a significant additional risk to employment prospects, beyond the already challenging outlook.

The Low Paid Commission’s (LPC) recommendations comprised:

 

Rate from April 2020

Rate from April 2021

Increase

National Living Wage

£8.72

£8.91

2.2%

21-22 Year Old Rate

£8.20

£8.36

2.0%

18-20 Year Old Rate

£6.45

£6.56

1.7%

16-17 Year Old Rate

£4.55

£4.62

1.5%

Apprentice Rate

£4.15

£4.30

3.6%

Accommodation Offset

£8.20

£8.36

2.0%

The LPC remain committed to the Government’s goal of ending low pay. Given uncertainties over the long-term economic outlook, they have not recommended any change to the Government’s target of the NLW reaching two-thirds of median earnings by 2024. The LPC’s report sets out an indicative future path for the NLW; but the effects of furloughing on pay data limit its precision this year.

Source: New feed

Are you ready for 1 January 2021?

Wednesday, November 25th, 2020

When we awake to the new year we will no longer be in transition; we will be out of the EU and will have to cope with a wide range of regulatory changes if we buy or sell goods or services to EU suppliers and customers.

The Department for Business, Energy & Industrial Strategy recently sent a “YOU NEED TO ACT NOW” plea to all UK businesses that may be affected by these changes.

Many of these reminders will have found their way to waste bins at a rapid rate of knots or be sitting in post boxes awaiting the return of staff all working from home or required to stay at home as their business is in lock-down.

The circular makes four points:

  1. Check the new rules on importing and exporting goods between the EU and GB from 1 January 2021 – different rules will apply in Northern Ireland.
  2. If you are planning to recruit from overseas from 1 January 2021 you will need to register as a licensed VISA sponsor.
  3. Use GOV.UK to identify changes affecting manufactured goods, such as new marking requirements or approvals needed, to ensure your business is ready to sell them in the EU and UK.
  4. If you are moving goods into out of or through Northern Ireland check the latest guidance.

The circular is peppered with red type to underline the importance and urgency of the DBEIS concerns. Presumably, they felt a reminder was necessary due to the expected number of businesses who are not prepared for this momentous change.

If you want to avoid potential disruption to your supply lines after 1 January 2021 it makes sense to take a look at the GOV.UK website and see what you need to do as a minimum to reduce these disruptive risks.

We are leaving and with complications due to COVID we may well be leaving with no formal trade agreement.

If you need help considering your options to protect your business please call.

Source: New feed

Furlough claims from 1 November 2020

Tuesday, November 24th, 2020

If you are making claims under the extended furlough scheme from 1 November 2020 you need to be aware of changes in the claims process.

Perhaps the most significant is that claims need to be registered within 14 days of the relevant period end. In their revised guidance on this topic HMRC say:

You can claim before, during or after you process your payroll as long as your claim is submitted by the relevant claim deadline. You cannot submit your claim more than 14 days before your claim period end date.

When making your claim:

  • you do not have to wait until the end date of the claim period for a previous claim before making your next claim
  • you can make your claim more than 14 days in advance of the pay date (for example, if you pay your employee in arrears)

If you do not finish your claim in one session, you can save a draft. You must complete your claim within seven days of starting it. All claims for periods from 1 July 2020 to 31 October 2020 must be submitted no later than 30 November 2020.

Claims from 1 November 2020 must be submitted by 11.59pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend or a bank holiday then claims should be submitted on the next working day.

Claim for furlough days in

Claim must be submitted by

November 2020

14 December 2020

December 2020

14 January 2021

January 2021

15 February 2021

February 2021

15 March 2021

March 2021

14 April 2021

 

But what happens if you cannot submit a claim by the deadline?

HMRC accept that there may be circumstances when a claim cannot be made within the statutory time limits. They confirm that you may have a reasonable excuse if:

  • your partner or another close relative died shortly before the claim deadline
  • you had an unexpected stay in hospital that prevented you from dealing with your claim
  • you had a serious or life-threatening illness, including Coronavirus related illnesses, which prevented you from making your claim (and no one else could claim for you)
  • a period of self-isolation prevented you from making your claim (and no one else could make the claim for you)
  • your computer or software failed just before or while you were preparing your online claim
  • service issues with HMRC online services prevented you from making your claim
  • a fire, flood or theft prevented you them from making your claim
  • postal delays that you could not have predicted prevented you from making your claim
  • delays related to a disability you have prevented you from making your claim
  • a HMRC error prevented you from making your claim

HMRC will not consider reasonable excuses in advance of a claim deadline.

Source: New feed

Are you eligible for further self-employed grants?

Thursday, November 19th, 2020

Two quarterly grants have been paid to UK self-employed traders that qualify for the Self- Employed Income Support Scheme (SEISS). These covered the periods up to 31 October 2020.

The Chancellor has announced that two further quarterly payments will be made. Traders will still need to qualify for the payments and in particular:

  • Have been previously been eligible for the SEISS first and second grant (although they do not have to have claimed the previous grants)
  • Declare that they intend to continue to trade and either:
    • are currently actively trading but are impacted by reduced demand due to coronavirus
    • were previously trading but are temporarily unable to do so due to coronavirus

If these conditions are confirmed then a claim can be made for the following periods:

Quarter 1 November 2020 to 31 January 2021

The maximum that can be claimed for this period is 80% of average, qualifying quarterly earnings capped at £7,500. This is an increase on the previously announced amount of 55%.

The online portal to make a claim will open 30 November 2020 and payments should be received before Christmas.

Quarter 1 February 2021 to 30 April 2021

Details of the amount that will be paid for this quarter will be announced January 2021.

Self-employed traders who, for what ever reason, do not qualify for this grant, but are still suffering financial hardship due to COVID disruption, may be able to claim under the Universal Credit.

The SEISS is taxable…

And don’t forget, when you prepare accounts covering any period during which you received an SEISS grant these will need to be added to your taxable earnings in the relevant tax period.

Need help applying?

Please call if you need assistance claiming these additional SEISS grants.

Source: New feed

Current businesses subject to lock-down

Tuesday, November 17th, 2020

We have reproduced below a list of businesses which must close during the period 5 November to 2 December 2020.

Business based in England and required to close

To reduce social contact, the regulations require some businesses to close and impose restrictions on how some businesses provide goods and services. These include:

  • Non-essential retail, such as clothing and homeware stores, vehicle showrooms (other than for rental), betting shops, tailors, tobacco and vape shops, electronic goods and mobile phone shops, and market stalls selling non-essential goods. These venues can continue to be able to operate click-and-collect (where goods are pre-ordered and collected off the premises) and delivery services
  • Hospitality venues such as cafes, restaurants, pubs, bars and social clubs; with the exception of providing food and drink for takeaway (before 10pm; and not including alcohol), click-and-collect, drive-through or delivery
  • Accommodation such as hotels, hostels, guest houses and campsites. Except for specific circumstances, such as where these act as someone’s main residence, where the person cannot return home, for homeless people, or where it is essential to stay there for work purposes
  • Leisure and sports facilities such as leisure centres and gyms, swimming pools, tennis and basketball courts, golf courses, fitness and dance studios, climbing walls, archery, driving, and shooting ranges
  • Entertainment venues such as theatres, concert halls, cinemas, museums and galleries, casinos, amusement arcades, bingo halls, bowling alleys, skating rinks, go-karting venues, soft play centres and areas, circuses, fairgrounds, funfairs, zoos and other animal attractions, water parks and theme parks. Indoor attractions at botanical gardens, heritage homes and landmarks must also close, though outdoor grounds of these premises can stay open
  • Personal care facilities such as hair, beauty, tanning and nail salons. Tattoo parlours, spas, massage parlours, body and skin piercing services must also close. It is also prohibited to provide these services in other peoples’ homes
  • Community centres and halls must close except for a limited number of exempt activities as set out below Libraries can also remain open to provide access to IT and digital services – for example for people who do not have it at home – and for click-and-collect
  • Places of worship, apart from for the purposes of independent prayer, for funerals or funeral commemorative events, to broadcast an act of worship, to provide essential voluntary services or urgent public support services, for registered childcare, and to host permitted gatherings.

These businesses and places will also be permitted to be open for a small number of exempt activities, including:

  • education and training (for schools to use sports, leisure and community facilities where that is part of their normal provision)
  • childcare purposes and supervised activities for children (in community centres and halls, and places of worship; and supervised activities for children in indoor sports and leisure facilities)
  • hosting blood donation sessions and food banks (in community centres and halls, places of worship, and libraries)
  • to provide medical treatment
  • for elite sports persons to train and compete (in indoor and outdoor sports facilities), and professional dancers and choreographers to work (in fitness and dance studios)
  • for training and rehearsal without an audience (in theatres and concert halls)
  • for the purposes of professional film and TV filming (in retail, entertainment and leisure venues, as well as visitor attractions)

 

Businesses based in Wales, Scotland and Northern Ireland are subject to regional variations and current restrictions for business owners in these areas will need to be accessed from regional government websites.

Source: New feed

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