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Monday 2nd November 2020

Autumn 2020

This edition of the newsletter provides a round up of the current Covid-19 financial support.

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Thursday 27th August 2020

August 2020

This edition of the newsletter provides an update on some tax changes as a result of Covid-19

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Thursday 7th November 2019

Autumn 2019

This edition includes articles on the new rules for capital gains tax on property and the shake-up to IR35 rules.

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Tuesday 30th July 2019

Summer 2019

The Summer edition leads on changes to VAT for the construction sector and an article on the potential advantages of deferring your state pension.

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Tuesday 14th May 2019

May 2019 Newsletter

The May edition details the changes to Entrepreneurs' Relief and the potential pitfalls when claiming Capital Allowances on some assets.

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Wednesday 27th February 2019

Spring 2019 Newsletter

The Spring edition of the newsletter highlights changes to IR35 and capital allowances

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Thursday 5th November 2020

The government has increased the support available to self-employed workers and extended its emergency business loan schemes.

The government has increased the support available to self-employed workers and extended its emergency business loan schemes as the UK heads for a second national lockdown.

On 5 November Rishi Sunak announced an increase  in the level of the third instalment of the Self-employment Income Support Scheme (SEISS) from 55% to 80% of average trading profits for November to January. SEISS grants are calculated over three months and the uplift for November to January, increases the level of the third grant to 80% of trading profits. The maximum grant will be capped at £7,500.

The SEISS grants will also be paid faster than previously planned, with the claims window opening at the end of November rather than the middle of December.

Chancellor Rishi Sunak said:

'The rapidly changing health picture has meant we have had to act in order to protect people's lives and I know this is an incredibly worrying time for the self-employed. That is why we have increased the generosity of the third grant, ensuring those who cannot trade or are facing decreased demand are able to get through the months ahead.'

Internet link: GOV.UK SEISS grant extension

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Thursday 5th November 2020

Chancellor Rishi Sunak has announced approved additional funding for cash grants to support businesses required to close in England due to the lockdown.

Chancellor Rishi Sunak has announced approved additional funding for cash grants to support businesses required to close in England due to the lockdown.

Those businesses affected will be eligible for the following:

  • For properties with a rateable value of £15,000 or under, grants to be £1,334 per month, or £667 per two weeks
  • For properties with a rateable value of between £15,000-£51,000 grants to be £2,000 per month, or £1,000 per two weeks
  • For properties with a rateable value of £51,000 or over grants to be £3,000 per month, or £1,500 per two weeks.

The Chancellor said:

'I have always said that we will do whatever it takes as the situation evolves. Now, as restrictions get tougher, we are taking steps to provide further financial support to protect jobs and businesses. These changes will provide a vital safety net for people across the UK.'

Internet link: GOV.UK news

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Thursday 5th November 2020

Self assessment taxpayers are now able to benefit from enhanced payment plans and can apply online for additional support to help spread their tax bill into monthly payments.

Self assessment taxpayers are now able to benefit from enhanced payment plans and can apply online for additional support to help spread their tax bill into monthly payments.

The online payment plan service was already able to set up instalment arrangements for paying tax liabilities up to £10,000. From 1 October 2020, HMRC increased the threshold to £30,000 for self assessment customers following Chancellor's Rishi Sunak's announcement on 24 September 2020.

As part of that speech, the Chancellor announced that self assessment taxpayers could pay their deferred payment on account bill from July 2020, any outstanding tax owed for 2019/20 and their first payment on account for 2020/21 in monthly instalments, up to 12 months, via this self-serve tool.

Taxpayers who wish to set up their own self-serve Time to Pay arrangements must meet the following requirements:

  • they have no outstanding tax returns, other tax debts or other HMRC payment plans set up
  • the debt needs to be between £32 and £30,000; and
  • the payment plan needs to be set up no later than 60 days after the due date of a debt.

Taxpayers using self-serve Time to Pay will be required to pay any interest on any outstanding balance from 1 February 2021.

Financial Secretary to the Treasury, Jesse Norman, said:

'We are supporting jobs by giving more breathing space to up to 11 million self assessment taxpayers when managing their tax affairs.

'Enhancing Time to Pay should ease the financial burdens and protect the livelihoods of these taxpayers, as they navigate the months ahead.'

HMRC is also warning taxpayers to be aware of scams claiming to be from HMRC, offering to help set up payment plans to pay any tax owed. These scams are trying to harvest taxpayers' details, in order to steal their money.

Please contact us for advice on meeting your tax payments.

Internet link: Gov.uk news

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Thursday 5th November 2020

HMRC has received more than 54,800 claims from taxpayers using a new online portal which allows workers to claim tax relief for working at home.

HMRC has received more than 54,800 claims from taxpayers using a new online portal which allows workers to claim tax relief for working at home.

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home.

Launched on 1 October 2020, the online portal has been set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer to help stop the spread of COVID-19.

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC.

HMRC is encouraging taxpayers claiming tax relief for working from home to apply directly through GOV.UK working at home.

Eligible taxpayers can claim tax relief based on the rate at which they pay tax. For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.

Higher rate taxpayers would therefore receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

HMRC's Interim Director General of Customer Services, Karl Khan, said:

'We want everyone to get the money that they are entitled to, so we've made the online service as easy to use as we can – it takes just a few minutes to make a claim.

'Once the application has been approved, the online portal will adjust an individual's tax code for the 2020/21 tax year. The employee will receive the tax relief directly through their salary and will continue to receive the adjustment until March 2021.'

Internet link: GOV.UK working at home 

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Thursday 5th November 2020

From 1 January 2021, the UK will operate a full external border with the EU, which will entail major changes for imports and exports to and from the trading bloc.

From 1 January 2021, the UK will operate a full external border with the EU, which will entail major changes for imports and exports to and from the trading bloc. From 1 January 2021, declarations will be needed to import or export specific (limited) goods categorised as 'controlled'.

However, for non-controlled goods brought from the EU to GB, import controls apply in three stages: January, April and July 2021. Some changes will apply to all goods movements, and will involve customs declarations, customs duties and VAT on imports, and safety and security declarations. 'Additional requirements' come in, but only affect certain specific goods movements, such as foodstuffs.

Action points to consider now include:

Economic Operators Registration and Identification (EORI) numbers: from 1 January 2021, an EORI number with the prefix 'GB' is needed to move goods between the UK and the EU, unless you only move goods between Northern Ireland and Ireland.

Remember that from January 2021, it will be important to think about both the UK and EU sides of the equation: to comply with EU requirements, you will, for example, need an EU EORI number if your business makes customs declarations or gets a customs decision in the EU.

Using a customs intermediary: given the complexity of UK and EU customs declarations, you may want to engage a customs intermediary to deal on your behalf.

Postponed VAT accounting for goods imported from the EU: from 1 January 2021, import VAT applies to imports from the EU. Using 'postponed VAT accounting' from 1 January 2021 lets you account for import VAT on your VAT return, giving the potential to declare and recover import VAT on the same return.

Delaying customs declarations and payment of tariffs: when the UK's full suite of border controls are in place in July 2021, full customs declarations and payment of customs duties, as set out in the new UK Global Tariff (or as specified in any trade deal with the EU) must take place when goods are imported from the EU. But from 1 January 2021 to 30 June 2021, most traders with a good compliance record can defer declaration and payment for up to six months on imports of standard goods from the EU.

This is only a summary outline of some of the issues involved. Gov.uk provides an online checker tool to use in your own circumstances. Do talk to us where further advice is needed.

Internet links: GOV.UK imports and GOV.UK exports

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Thursday 5th November 2020

The Association of Taxation Technicians (ATT) has issued a last call for businesses looking to make use of the increased Annual Investment Allowance (AIA).

The Association of Taxation Technicians (ATT) has issued a last call for businesses looking to make use of the increased Annual Investment Allowance (AIA).

The AIA will be reduced from £1 million to £200,000 from 1 January 2021. Businesses that incur significant expenditure on plant and machinery before the end of this year are likely to get tax relief on the cost much earlier than if the purchase is made in 2021.

Jeremy Coker, President of the ATT, said:

'The AIA rules can catch a business unawares.Many businesses will have deferred decisions about purchasing capital equipment this year because of the enormous uncertainties created by the pandemic. For any which are considering such purchases now, the scheduled ending of the temporary increase in the AIA in two months' time introduces an unwelcome additional complexity.

'Although the timing of a purchase may make no difference in the long run to the amount of expenditure which qualifies for tax relief, it can make an enormous difference to how quickly that relief is received and the contribution that the relief can make to the cashflow of a business.'

Internet link: ATT

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Thursday 5th November 2020

HMRC has published the latest issue of the Employer Bulletin.

HMRC has published the latest issue of the Employer Bulletin. The October issue has information on various topics including:

  • coronavirus support schemes and what employers need to do from November onwards
  • National Insurance Number delays
  • Guidance on off payroll working rules (IR35)
  • grants for businesses that complete customs declarations
  • new Employment Allowance status option on PAYE for employers
  • using HMRC's Business Tax Account
  • making PAYE settlement agreement payments
  • applications for the £50 million customs grant scheme
  • deferred self assessment payments from July 2020
  • Student Loan repayments.

Please contact us for help with payroll matters.

Internet link: Employer Bulletin

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Friday 2nd October 2020

The existing job support scheme, the furlough scheme, comes to an end on 31 October.

The existing job support scheme, the furlough scheme, comes to an end on 31 October. As part of the Winter Economy Plan the government announced it will be introducing a new Job Support Scheme from 1 November 2020.

For employers to participate in the scheme:

  • employees will need to work a minimum of 33% of their usual hours
  • for every hour not worked, the employer and the government will each pay one third of the employee's usual pay
  • the government contribution will be capped at £697.92 per month.

Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice.

The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme. It will be open to such businesses even if they have not previously used the furlough scheme.

All small and medium-sized enterprises will be eligible. Large businesses will be required to demonstrate that their business has been adversely affected by COVID-19. The government also expects that large employers will not be making capital distributions, such as dividends, while using the scheme.

The Job Support Scheme will sit alongside the Jobs Retention Bonus which was announced by the Chancellor in July. The Bonus will provide a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021 and who earns at least £520 a month on average between 1 November 2020 and 31 January 2021. Businesses can benefit from both schemes.

Internet link: Gov.uk Factsheet

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Friday 2nd October 2020

As part of the Winter Economy Plan the Self-Employment Income Support Scheme (SEISS) will be extended under the name SEISS Grant Extension.

As part of the Winter Economy Plan the Self-Employment Income Support Scheme (SEISS) will be extended under the name SEISS Grant Extension. The grant:

  • will be limited to self-employed individuals who are currently eligible for the SEISS, and
  • will be available to individuals who are actively continuing to trade but are facing reduced demand due to COVID-19.

The scheme will last for six months, from November 2020 to April 2021, and will consist of two grants. The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20% of average monthly trading profits, paid out in a single instalment covering three months' worth of profits, and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.

The amount of the first grant under the SEISS grant extension will be significantly less than the grants made under the SEISS. The initial SEISS grant was based on 80% of profits (capped at £7,500) and the second SEISS grant was based on 70% of profits (capped at £6,570).

Internet link: Gov.uk factsheet

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Friday 2nd October 2020

As part of the Winter Economy Plan the government has announced options for deferred VAT and income tax self assessment payments.

Over half a million businesses deferred VAT payments, which were due in March to June 2020, with these payments becoming due at the end of March 2021.

As part of the Winter Economy Plan the government has now announced the option for such businesses to spread their payments over the financial year 2021/22. Businesses will be able to choose to make 11 equal instalments over 2021/22. All businesses which took advantage of the VAT deferral can use the spreading scheme. Businesses will need to opt in and HMRC will put in place an opt-in process in early 2021.

Enhanced Time to Pay for self assessment taxpayers

Taxpayers were able to defer the income tax self assessment payment on account for 2019/20, due by 31 July 2020, to 31 January 2021. There are also other amounts due on 31 January 2021 – a balancing payment for the 2019/20 tax year and the first payment on account for the 2020/21 tax year.

Taxpayers with up to £30,000 of self assessment liabilities due will be able to use HMRC's self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that self assessment liabilities due in July 2020, and those due in January 2021, will not need to be paid in full until January 2022. Any self assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC's Time to Pay self assessment helpline to agree a payment plan.

Internet link: Gov.uk news

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