Welcome to our monthly newswire, we hope that you find it useful. Please contact us if you wish to discuss any matters in this newsletter.
CLARKSONS CLIENT MEETINGS, DROPPING OFF AND COLLECTING PAPERWORK
Following the latest government guidance which comes into force today. Our office in Thornborough Hall will remain open, however both the front and back doors will be locked at all times. When dropping off or collecting paperwork, please make your way to the front door and call our office telephone number which will be written on a notice on the door, and a member of staff will come to meet you. Alternatively, if you wish to post or scan in documents and email them to us please let us know.
We are unable to offer one to one meetings in the office at this time but are offering phone call or Zoom meetings as an alternative.
Please note we are experiencing high volumes of work at the moment due to the additional work created by the Coronavirus, so accounts may take longer to prepare than the usual 6 to 8 weeks but we will endeavour to get them completed as soon as we can.
“FURLOUGH” SCHEME EXTENDED AT 80% USUAL PAY
Following the announcement by the Prime Minister on the 31 October regarding the new lockdown in England for the commencing 4 November, and further announcements today the CJRS has been extended until the end of March 2021.
The Grant will ensure employees receive 80% of their current salary for hours not worked, up to a maximum of £2,500.
Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, employers will be asked to cover National Insurance and employer pension contributions.
As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
The government will review the policy in January.
Who is eligible to claim the CJRS?
All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
As under the current CJRS rules:
- Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
- Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
- Additional guidance will be set out shortly and we will let you have the necessary information for clients and to make the claim when we receive it.
JOB RETENTION SCHEME BONUS
Following the extension of the Furlough Scheme, today the chancellor announced the incentive of the Job Retention Scheme Bonus of £1,000 falls away and will no longer be available.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
- For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
- For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
Business grant policy is fully devolved. Devolved Administrations will receive UK Government financial support which they could use to establish similar schemes.
MORTGAGE PAYMENT HOLIDAYS
Mortgage payment holidays will no longer end 31 October. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
The FCA will announce further information today and we will update you when we have seen it.
SELF EMPLOYED INCOME SUPPORT SCHEME (SEISS) ALSO IMPROVED
It was announced today that the government is increasing its support to the self-employed over the coming months and ensuring people get paid faster than previously planned.
To reflect the recent changes to the furlough scheme, the UK-wide Self-Employment Income Support Scheme (SEISS) will be made more generous – with self-employed individuals receiving 80% of their average trading profits for November.
To ensure those who need support get it as soon as possible, payments will also be made more quickly with the claims window being brought forward from 14 December to 30 November.
As SEISS grants are calculated over three months, the uplift of the original 40% grant for November, December and January will double to 80% of average earnings in the previous year, up to a maximum of £7,500
To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:
- have been previously eligible for the Self-Employment Income Support Scheme 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
MORE TIME TO PAY TAX DUE ON 31 JANUARY 2021
Those taxpayers who may have difficulty paying the tax due under self-assessment on 31 January 2021 can agree more time to pay with HMRC provided the amount outstanding is no more than £30,000.
The government have already agreed that amounts due under self-assessment on 31 July 2020 could be deferred until 31 January 2021 but this latest announcement generally allows a further 12 months to pay.
You can either set up a payment plan online by logging into your HMRC online personal tax account or call the HMRC Payment Support Service.
GOVERNMENT LOAN SCHEMES
More businesses will also be able to benefit from government loan schemes which have been extended to the end of January 2021, while firms can ‘top up’ existing Bounce Back Loans should they need additional finance.
CGT BUSINESS ASSET DISPOSAL RELIEF LIFETIME LIMIT JUST £1 MILLION
In the March 2021 Budget it was announced that CGT Entrepreneurs’ relief (ER) was replaced by CGT Business Asset Disposal relief (BADR) for disposals on or after 11 March 2020.
It was also announced that the 10% CGT rate would only apply to the first £1 million of qualifying gains in the taxpayer’s lifetime and many business owners have misinterpreted how this limit applies. Unfortunately claims under the predecessor ER need to be taken into consideration so if £750,000 ER has already been claimed only the first £250,000 of qualifying gains after 11 March 2020 would qualify for BADR. Any gains in excess of that amount would be taxed at normal CGT rates, currently 20% for higher rate taxpayers.
AIRBNB REPORTING PROPERTY RENTAL DETAILS TO HMRC
You may have seen in the newspapers that Airbnb will share data with HMRC about the earnings of hosts (those who let out property) on its UK platform in the years 2017/18 and 2018/19.
It is anticipated that HMRC will use this data to open enquiries into the tax affairs of individuals who have not declared letting income for 2017/18 and 2018/19. The deadline for opening an enquiry into a self-assessment return for 2018/19 is 31 January 2021, if the return was issued and submitted on time. The discovery rules allow HMRC to go back much further, potentially up to 20 years in some cases if the property income has not previously been reported.
RENT COVERED BY RENT A ROOM RELIEF
For many property owners the rental income will be tax free if it is within the £7,500 rent a room relief and will not even need to be reported. This applies where room(s) in the taxpayer’s main residence are rented out, typically to lodgers.
Where the house is owned jointly they would qualify for £3,750 each tax free.
BRING YOUR TAX AFFAIRS UP TO DATE
2018/19 tax returns can be amended by the taxpayer up until 31 January 2021. Where the omitted property income or gain relates to earlier tax years the taxpayer should consider disclosing using HMRC’s let property campaign.
If this affects you we can assist you in putting together the details that HMRC require.
DIARY OF MAIN TAX EVENTS - NOVEMBER/DECEMBER 2020
PAYE & NIC deductions, and CIS return and tax, for month to 5/11/20 (due 22/11 if you pay electronically)
Corporation tax for year to 28/02/2020 unless quarterly instalments apply
PAYE & NIC deductions, and CIS return and tax, for month to 5/12/20 (due 22/12 if you pay electronically)
Deadline for filing 2019/20 tax return online in order to request that HMRC collect outstanding tax via the 2020/21 PAYE code
Stay safe and we will keep all our clients fully informed of the new measures and how to claim as we get further details.
Please contact a member of our team if you would like to discuss any of the issues raised.
Dawn, James, Mark, Deb, Penn, Lucy and Becky
Telephone: 01969 624999