Month: March 2020

1 April 2020 – Due date for Corporation Tax due for the year ended 30 June 2019.

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

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

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

30 April 2020 – 2018-19 tax returns filed after this date will be subject to an additional £10 per day late filing penalty.

`1 May 2020 – Due date for Corporation Tax due for the year ended 30 July 2019.

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

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

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

31 May 2020 – Ensure all employees have been given their P60s for the 2019-20 tax year.

Prior to 11 March 2020, business owners could sell multiple, qualifying businesses during their lifetime, and as long as the total chargeable gains did not exceed £10m, a reduced rate of Capital Gains Tax of just 10% would apply.

Since budget day, 11 March 2020, this lifetime allowance has been reduced to £1m.

Business owners who are contemplating a sale of their business after the March date may need to rethink their disposal strategies as this change could potentially double the amount of CGT payable on their sale.

Please contact us for more information on this topic.

It is unlikely that our businesses will be unaffected by the inevitable slow-down in economic activity as the Coronavirus outbreak starts to bite.

Maintaining a strict control over your personal and business cash-flow is going to be a key decider in surviving this process.

A major expenditure item is taxation whether that be VAT, PAYE/NIC, self-assessed liabilities or Corporation Tax.

We suggest that all businesses rework their cash-flow forecasts based on the revised trading outlook post COVID-19. Be realistic and tend towards less optimistic scenarios. If the outcome requires support from your bank you may be eligible for a government backed Business Interruption Loan – the government will guarantee 80% of the loan – make your application now based on your revised cash-flow.

And finally, all businesses and self-employed people may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. You can contact HMRC’s new dedicated COVID-19 helpline for advice and support. To ensure ongoing support, HMRC has made a further 2,000 experienced call handlers available to support firms and individuals when needed. For Time to Pay support if you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

And please call us if you need help reworking your cash-flow forecasts, negotiating loans with your bank or presenting tax payment deferment schemes to HMRC.

In England

The government will increase the Business Rates retail discount to 100% for one year, expand it to the leisure and hospitality sectors and increase the rates discount for qualifying pubs to £5,000. Taken together with existing small business rate relief (which provides full relief for businesses using a single property with a rateable value of £12,000 or less), an estimated 900,000 properties, or 45% of all properties in England, will receive 100% business rates relief in 2020-21:

• Businesses that received the retail discount in 2019-20 will be rebilled by their local authority as soon as possible.
• Those businesses eligible for the newly expanded retail discount and/or the new pubs discount may need to apply to their local authority to receive the discount.
• Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.

The government is also providing an additional £2.2 billion funding for local authorities to support small businesses that already pay little or no Business Rates because of Small Business Rate Relief (SBBR). This will provide a one-off grant of £3,000 to around 700,000 business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs. For a property with a rateable value of £12,000, this is one quarter of their rateable value, or comparable to 3 months of rent.

Regional variations in Wales, Northern Ireland and Scotland may need to be considered. To find out what your position will be contact your local rating authority or council.

Employers have been rightly worried about the cost of funding SSP for employees that are self-isolating or suffering from the COVID-19 virus. Especially as SSP is now due on day one of absences.

The Chancellor has now confirmed that he will create a means for employers to recover any SSP paid for the first 14 days of sick leave.

Additionally, employees who are advised to self-isolate for COVID-19 will soon be able to obtain an alternative to the fit note to cover this by contacting NHS 111, rather than visiting a doctor. This can be used by employees where their employers require evidence.

Those who are not eligible for SSP, for example the self-employed or people earning below the Lower Earnings Limit of £118 per week (increasing to £120 from 6 April 2020), can now more easily make a claim for Universal Credit or Contributory Employment and Support Allowance.

The long-awaited statement from the Chancellor, Rishi Sunak regarding COVID-19 support for the self-employed has been announced. The Chancellor said that the scheme will benefit some 95% of people whose main income source is derived from self-employment.

A list of the scheme features as announced, and published, are as follows:

• Those that qualify will receive a cash grant from HMRC based on 80% of profits, up to £2,500 per month,
• The initial grant will be for the three months, from 1 March through to the end of May 2020, but could be extended for a longer period.

To be eligible, the following conditions will be taken into account:

• Applicants must be self-employed or a member of a trading partnership,
• Have lost trading profits due to COVID-19,
• Have filed a tax return for 2018-19. Late filers will have four weeks from 26 March 2020 to do so,
• Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020-21,
• Have trading profits of less than £50,000 and more than half of total income from self-employment. This can be with reference to at least one of the following conditions:
  • Your trading profits and total income in 2018-19,
  • Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

There is no need to apply to HMRC as they will contact you if you are eligible. HMRC will use existing data to make this judgement. The initial three-month grant will be paid directly to a nominated bank account in a single lump sum. The grants are expected to be paid out at the beginning of June. The reason for this delay is likely down to three main factors: the 4 weeks additional filing time for late filers, the requirement to set up a complex new system at the same time as the Coronavirus Job Retention Scheme and to reduce the risk of fraud.

It is assumed that those self-employed who have experienced a significant drop in income due to COVID-19 disruption will need to apply for Universal Credits or Business Continuity Loans to tide them over until June. This will be a challenging time for those affected as the demand for help will place significant challenges on the institutions charged with providing this support.

CORONAVIRUS JOB RETENTION SCHEME (CJRS) – update for director shareholders

There has been uncertainty as to the position of director/shareholders claiming under the CJRS as their income is usually taken from their company as a combination of a low salary and dividends. In the news story published following the Chancellor’s statement on 26 March (regarding the Self-employed scheme) is a telling paragraph. It says:

Those who pay themselves a salary and dividends through their own company are not covered by the scheme (the Self-employed Scheme) but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

This infers that directors will only be eligible for the CJRS based on their salary alone, and only if there is a proven PAYE record.

Further details of the CJRS are due to be published imminently and will be added to our newsfeed as soon as they are available.

Further support to businesses and the self-employed, to delay the payment of various taxes was announced last week. They include:

VAT

Any VAT that falls due for payment in the period from 20 March 2020 to 30 June 2020 can be deferred until the end of the 2020-21 tax year.

This is not a cancellation of any liability that falls due in this period, merely a deferral. Businesses will need to ensure that they have funds to settle any arrears on or before the end of March 2021 (5 April 2021).

Any refunds due from HMRC will be paid as usual.

Second payment on account due 31 July 2020

It has been confirmed that self-employed persons’ self-assessment, second payment on account for 2019-20, due 31 July 2020, can be deferred until 31 January 2021.

Tax payers should be aware that as with the VAT offer, this is a deferral, not a cancellation of tax due. Those who take advantage will need to pay their second payment on account and any balancing payment for 2019-20 and any first payment on account – if any is due – for 2020-21.

Please call if you need to clarify which VAT payments can be deferred and the likely longer term cash flow effects if you defer the self-assessment payment on account in July.

In both cases there is no need to apply to HMRC to defer payments.

As one of the additional measures to support businesses affected by the Coronavirus outbreak, Rishi Sunak announced last week that HMRC is to step in and pay up to 80% of furloughed staff wages up to a monthly maximum of £2,500 per employee.

Initially, this sounded as if HMRC was going to underwrite 80% of our salaries bill; let’s be clear, this is not what is on offer. What is on offer is the Coronavirus Job Retention Scheme. (CJRS) The following notes cover the basic terms and conditions.

What does “furloughed” mean?

Our first observation is that the word furlough has no legal significance. After reading the GOV.UK notes it is clear that this refers to staff that are laid-off as they cannot work during the current disruption to trade.

Ordinarily, business owners would probably be faced with offering these staff redundancy.

A furloughed worker is not someone who has been directed to work from home.

Furloughed can be defined, therefore, as an employee that is retained on your payroll but is unable to undertake any productive work.

What is on offer?

As noted above, HMRC will reimburse 80% of furloughed employees’ wages costs up to a maximum of £2,500 a month – this is the level of the national median wage.

Employers can make up any differential at their discretion, this is not compulsory.

The aim is to provide a basic income such that, when matters return to normal, staff can be recalled, resuming their normal duties.

How do we claim?

HMRC are building an online portal where employers can disclose the details of furloughed employees and make a claim under the CJRS scheme.

This is not presently available and best guess is payment will not be forthcoming from HMRC until towards the end of April 2020.

Action to take now

This scheme is a welcome addition to the other supportive grants and reliefs announced by the Chancellor in the past two weeks.

Business owners that were considering redundancies or more drastic measures may be able to use CJRS to retain their staff until the worst of the COVID-19 disruption has passed.

A word of caution. The details about the way in which the scheme will operate are sketchy at the time this update was written. As more information becomes available you will be the first to know. In the meantime, please call if you need our support to work through your options.

Retail, leisure, hospitality and other small businesses can get support to help during the disturbance caused by coronavirus (COVID-19). We are also exploring what further support we can provide.

Business rate relief

Retail, leisure and hospitality businesses

You will get one year business rates relief in 2020 to 2021. This means that you will not have to pay any business rates during this time.

This will be administered through the business rates system. You do not need to do anything. Your local authority will contact you.

Grants

Retail, leisure and hospitality businesses with a rateable value of £12,001 and £51,000

You will get a grant of £25,000.

Businesses with a rateable value of £12,000 or less

All businesses that are eligible for Small Business Rates Relief will get a grant of £10,000.

How to apply

You do not need to do anything to apply for the grant. This will be administered through the business rates system. You do not need to contact your local authority. They will contact you.

New small business grant

Businesses will be able to apply for a new business grant.  Details about how to apply will be available shortly.

Business Interruption Loan Scheme

The UK government has set up a new temporary Coronavirus Business Interruption Loan Scheme. Small and medium sized (SMEs) businesses will be able to apply for bank loans and overdrafts.

The UK government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The UK government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 6 months of that finance interest free, as UK government will cover the first 6 months of interest payments.

How to apply

Further details, including on the lenders providing access to this scheme will be announced in the coming days, and the scheme will be available from early week commencing 23 March 2020.

Additional support

Get help and support for your business on Business Wales, or phone 03000 6 03000.

Get grants, loans and investment for your business on Development Bank of Wales, or phone 0800 587 4140.

Shops, leisure, hospitality and other small businesses can get support to help during the disturbance caused by coronavirus (COVID-19). We are also exploring what further support we can provide.

Business rate relief

Shops, leisure and hospitality businesses

You will get one year business rates relief in 2020 to 2021. This means that you will not have to pay any business rates during this time.

Pubs with a rateable value between £51,000 and £100,000

You will get £5,000 off your business rates bill. This will be administered through the business rates system. You do not need to do anything. Your local authority will contact you.

Grants

Shops, leisure and hospitality businesses with a rateable value of £12,001 and £51,000

You will get a grant of £25,000.

Shops, leisure and hospitality businesses with a rateable value of £12,000 or less

You will get a grant of £10,000.

How to apply

You do not need to do anything to apply for the grant. This will be administered through the business rates system. You do not need to contact your local authority. They will contact you.

New small business grant

Businesses will be able to apply for a new business grant.  Details about how to apply will be available shortly.

Business Interruption Loan Scheme

The UK government has set up a new temporary Coronavirus Business Interruption Loan Scheme. Small and medium sized (SMEs) businesses will be able to apply for bank loans and overdrafts.

The UK government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The UK government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 6 months of that finance interest free, as UK government will cover the first 6 months of interest payments.

How to apply

Further details, including on the lenders providing access to this scheme will be announced in the coming days, and the scheme will be available from early week commencing 23 March 2020.

Additional support

Get help and support for your business on Business Wales, or phone 03000 6 03000.

Get grants, loans and investment for your business on Development Bank of Wales, or phone 0800 587 4140.