This edition of the newsletter provides an update on some tax changes as a result of Covid-19
This edition includes articles on the new rules for capital gains tax on property and the shake-up to IR35 rules.
The Summer edition leads on changes to VAT for the construction sector and an article on the potential advantages of deferring your state pension.
The May edition details the changes to Entrepreneurs' Relief and the potential pitfalls when claiming Capital Allowances on some assets.
The Spring edition of the newsletter highlights changes to IR35 and capital allowances
HMRC are inviting those individuals that are self employed or a member of a partnership and have been adversely affected by coronavirus to claim a second grant under the Self Employed Income Support Grant.
Applications for the first grant under the scheme closed on 13 July 2020.
The second and final taxable grant is worth 70% of an individual's average monthly trading profits, paid out in a single instalment covering three months' worth of profits, and capped at £6,570 in total.
Applications for the second and final grant are now open. The grant is only available to businesses that have been adversely affected on or after 14 July 2020. Taxpayers must make a claim for the second grant on or before 19 October 2020.
HMRC will work out businesses' eligibility for the second grant in the same way as the first grant.
Taxpayers are able to make a claim for the second grant if they are eligible, even if they did not make a claim for the first grant.
HMRC have confirmed that taxpayers can:
The grant does not need to be repaid if a taxpayer is eligible, but will be subject to both income tax and self employed National Insurance.
Internet link: GOV.UK SEISS guidance
The fee for plastic shopping bags in England will be doubled to 10 pence and extended to all shops from April 2021.
Small retailers, those employing 250 people or fewer, will no longer be exempt, the Department for Environment, Food and Rural Affairs (Defra) said.
According to Defra, since the charge was first introduced in 2015 it has successfully prevented billions of plastic bags being sold and ending up in the ocean and environment.
Government data shows the current levy, which stands at 5 pence per bag and applies to any retailer employing 250 or more people, has led to a 95% cut in plastic bag sales in major supermarkets since 2015.
Commenting on the announcement, Environment Secretary George Eustice, said:
'We have all seen the devastating impact plastic bags have on the oceans and on precious marine wildlife, which is why we are taking bold and ambitious action to tackle this issue head on.
'The UK is already a world-leader in this global effort, and our carrier bag charge has been hugely successful in taking billions of harmful plastic bags out of circulation. But we want to go further by extending this to all retailers so we can continue to cut unnecessary waste and build back greener.'
Internet link: GOV.UK
Over £30 million has been lost to pension scams since 2017, according to the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR).
A total of £30,857,329 in pension savings has been lost to scammers since 2017, data published by the FCA and the TPR revealed. Reported losses ranged from under £1,000 to as much as £500,000. The average victim was a man in his 50s, the FCA and the TPR found.
65% of pension savers said they felt confident they could spot a scam. However, four in ten would put themselves at risk unknowingly by engaging with a common scam tactic, such as being told it's a time-sensitive offer.
The FCA and the TPR have advised savers not to be pressured into making any decisions about their pensions, and to reject unexpected pension offers, whether these are made online, via social media or over the phone.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
'During these uncertain times, it is more important than ever to defend your lifetime savings from scammers.
'Fraudsters will seek out every opportunity to exploit innocent people, no matter how much or how little you have saved.'
Internet link: FCA news
New company car advisory fuel rates have been published which take effect from 1 September 2020. The rates only apply to employees using a company car. The guidance states:
'You can use the previous rates for up to one month from the date the new rates apply.'
The advisory fuel rates for journeys undertaken on or after 1 September 2020 are:
|1400cc or less||10p|
|1401cc - 2000cc||12p|
|1400cc or less||7p|
|1401cc - 2000cc||8p|
|1600cc or less||8p|
|1601cc - 2000cc||10p|
HMRC guidance states that the rates only apply when you either:
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.
If you would like to discuss your car policy, please contact us.
Internet link: GOV.UK AFR
The government has announced that more than 64 million meals were enjoyed by diners across the country during the government's Eat Out to Help Out discount scheme. The scheme closed on 31 August 2020.
Government figures show that restaurants had claimed for more than 64 million discounted meals as Eat Out to Help Out entered its fourth week.
This continues the upward trend in the scheme's popularity, with 10.5 million meals claimed for in the first week, growing to a total of 35 million meals in the second.
The upward trend in meals claimed for shows that millions continued to flock to eat out to support 1.8 million jobs in the hospitality sector, which has been hit hard by coronavirus (COVID-19). The government has confirmed that 87,000 claims have been made by restaurants taking part in the scheme.
Data from OpenTable shows that during Eat Out to Help Out's third week the number of customers at UK restaurants was 61% higher than the same days last year on average for Monday to Wednesday. The average level across Monday to Wednesday in the first and second week were 12% and 41% respectively. The data also shows that the number of customers at UK restaurants was up 17% compared to the same week in 2019.
Chancellor of the Exchequer Rishi Sunak said:
'Today's figures continue to show that Brits are backing hospitality – with more than 64 million meals discounted so far, that's equivalent to nearly every person in the country dining out to protect jobs.
'This scheme has reminded us how much we love to dine out, and in doing so, how this is helping to protect the jobs of nearly two million people who work in hospitality.'
Two self assessment deadlines are approaching:
5th October 2020
For those individuals who have not previously completed a tax return but need to report a liability for 2019/20.
31st October 2020
For those individuals who have previously submitted 'paper' self assessment tax returns the deadline for the 2019/20 return is 31 October 2020. Returns submitted after that date must be submitted electronically or they will incur a minimum penalty of £100. The penalty applies even when there is no tax to pay or the tax is paid on time.
If you would like any help with the completion of your self assessment tax return, please do get in touch.
Internet link: HMRC deadlines
HMRC has published the latest edition of the Employer Bulletin. This guidance for employers, and their agents, includes articles on:
Please contact us for help with employment matters.
Internet link: Employer Bulletin
HMRC has outlined the eligibility requirements for the Job Retention Bonus (JRB) that follows the furlough scheme as part of the government's measures to support the economy through the COVID-19 lockdown.
The government's Coronavirus Job Retention Scheme ends on 31 October 2020 and the JRB aims to provide additional support to employers who keep on their furloughed employees in meaningful employment.
The JRB is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the JRB after they have filed PAYE for January and payments will be made to employers from February 2021.
All employers are eligible for the scheme including recruitment agencies and umbrella companies. They should ensure that they have complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system, maintained enrolment for PAYE online and have a UK bank account.
Employers will be able to claim for employees who were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme.
They must have up-to-date RTI records for the period to the end of January and not be serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim.
HMRC will publish further details about this process before the end of September 2020.
Internet link: GOV.UK publications
On 21 July, the Treasury set out the next steps in its plan to extend Making Tax Digital (MTD) to all businesses and those taxpayers that file self assessment returns.
Currently, businesses above the VAT threshold of £85,000 are required to comply with Making Tax Digital for VAT (MTD for VAT).
From April 2022, the initiative will be extended to all VAT-registered businesses including those with turnover below the VAT threshold. From April 2023 MTD will apply to taxpayers who file income tax self-assessment tax returns for business or property income over £10,000 annually.
According to the Treasury, the MTD changes will affect the way that taxes are reported, not the level of tax that is collected. They will help to minimise avoidable mistakes, which cost the exchequer £8.5 billion in 2018/19.
Jesse Norman, Financial Secretary to the Treasury, said:
'We are setting out our next steps on MTD . . . as we bring the UK's tax system into the 21st century.
'MTD will make it easier for businesses to keep on top of their tax affairs. But it also has huge potential to improve the productivity of our economy, and its resilience in times of crisis.'
Internet link: GOV.UK publications
The government has published a call for evidence on the overhaul of the business rates system that applies in England.
The government announced at the 2020 Budget in March that it would conduct a review of the business rates system in England. It is seeking views from businesses, business representative organisations, local authorities, rating agents, others involved in the operation of the system and anyone interested in the business rates or wider tax system.
The call for evidence seeks views on how the business rates system currently works, issues to be addressed, ideas for change and a number of alternative taxes.
The government stated that it welcomes views on the multiplier and reliefs sections of the call for evidence by 18 September 2020, to inform an interim report in the autumn.
Internet link: TM Treasury consultations