News and Updates

Please find below all updates and current news regarding the changing circumstances surrouding the COVID-19 outbreak.

02/04/2020

It was originally announced that all self employed taxpayers would be able to defer their July payment on account in order to ease cash flow in the wake of the coronavirus outbreak. This deferral has now been extended to all taxpayers.

Therefore any taxpayer with a payment on account due by the end of July may defer the payment until 31 January 2021.

This is an automatic offer and no application is required. If you would prefer to make the payment in the normal manner you can continue to do so. However, for those who choose to defer, no penalties or interest will be charged.

Please note, this is a deferral only and not a reduction in the liability, therefore the amount due at 31 January 2021 will be higher.

We would urge all individuals to submit their 2019/20 self assessment tax returns as early as possible. This won't alter the due date of any payments but will give certainty over the amounts due so that time to pay arrangements can be agreed with HMRC where necessary.

26/03/2020

The chancellor has announced his eagerly anticipated support package for self-employed individuals. The key points from the announcement are as follows:

  • Self-employed individuals are to be provided with a taxable grant to cover lost earnings as a result of the COVID-19 outbreak.
  • This will cover 80% of their average monthly profits, calculated over the previous three years (or less for those who have not been trading for this length of time).
  • As with the job retention scheme, this will be capped at 2,500 pounds per month and will only be available for those with trading profits of less than 50,000 pounds.
  • This will only apply to those who are already self-employed to prevent abuse of the system.
  • The scheme is expected to be in place by the start of June and HMRC will contact relevant individuals directly.
  • Individuals who haven't submitted their 2019 tax return will be given 4 weeks to get their tax affairs up to date and benefit from the scheme.

Full details will be provided in due course once available.  

26/03/2020

HM Revenue & Customs (HMRC) have now issued guidance relating to the VAT deferral for payments arising between 20th March 2020 and 30th June 2020 if there is a direct debit in place. To ensure no payment is made to HMRC, the direct debit with your bank must be cancelled.  This should be done as far in advance before the VAT payment is due to be made - otherwise HMRC will automatically collect it.

Once the VAT deferral period has expired, the direct debit must be set up again for future VAT returns and corresponding VAT payments. Agents cannot set up the direct debit payments on behalf of taxpayers.

The VAT liability in this deferral period has to be repaid to HMRC no later than 5th April 2021. Any VAT registered business not affected by COVID 19 can choose to continue making their VAT payments as normal.

All VAT returns are still due to be submitted on time in this deferral period.

If you have any questions or concerns, please do not hesitate to get in touch.

24/03/2020

The previously announced Coronavirus Business Interruption Loan Scheme (CBILS) is now live.

This is a new scheme which has been set up to provide loan facilities of up to 5m pounds for smaller UK businesses who are experiencing cashflow difficulties as a result of COVID-19.

A summary of the key features of the scheme can now be found on the British Business Bank website:

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

Please note, the scheme is only available to UK businesses meeting the following conditions:

  • UK based business activity with turnover of 45m pounds or less.
  • Have a borrowing proposal which would be considered viable by the lender were it not for the current pandemic and for which the lender believes the provision of finance will enable the business to trade out of any short to medium term difficulty.

If the lender would be willing to offer finance to the business on normal commercial terms, without the use of the scheme, they will do so.

The finance is to be arranged directly through one of the British Business Banks 40+ accredited lenders, which includes most high street banks.

The advice is for each business to approach their own provider in the first instance. The relevant bank is likely to have information on their website about the application procedure.

Each lender will have their own requirements, however, it is expected that businesses will require a proposal, which could include cashflow/profit forecasts and projections.

Please do not hesitate to get in contact should you have any questions or require assistance with the proposal.

Take care and stay safe.

23/03/2020

On Friday evening the Chancellor Rishi Sunak announced further support measures to combat the financial impact of the COVID-19 outbreak.

New measures are being announced regularly, however in some cases, the finer details as to how and when these schemes will operate are still to be revealed. A summary of the information released to date has been included below and further details will be provided once available.

The measures announced Friday evening are as follows:

Coronavirus Job Retention Scheme:

  • HMRC will reimburse 80% of an employee's wage cost for those unable to work due to the outbreak. This is subject to a cap of 2,500 pounds per month.
  • All UK businesses, regardless of size, will be eligible for the scheme.
  • In order to claim, employers will need to designate any affected employees as 'furloughed workers' and notify employees of this change. This change of status remains subject to employment law and the particular terms of the employment contract.
  • The scheme will be backdated to 1 March and can cover the wage costs of employees who have already been released if they are re-employed.
  • The current systems are not currently set up to facilitate repayments to employers, therefore HMRC are urgently working on a new system. As such, we do not have a confirmed start date or any specific details for the procedure. However, it is expected that this will be in place by the end of April and details are likely to be provided through a new online portal.
  • We would urge employers to keep detailed records to ensure claims can be made once the scheme is operational

Deferral of VAT payments:

  • All UK businesses, with a VAT period falling between 20 March 2020 and 30 June 2020 will be able to defer payment of the liability.
  • This is an automatic offer and doesn't need to be applied for. Therefore businesses will need to submit their VAT return as normal but do not need to make the payment to HMRC.
  • Taxpayers will then be given the remainder of the tax year (5 April 2021) to settle the liability.

Deferral of income tax payments (for self-employed individuals):

  • Individuals who are self-employed will be able to defer payment of their July payment on account.
  • Again, this is an automatic offer and doesn't need to be applied for.
  • The full liability will then need to be settled by 31 January 2021.
  • Based on the information provided to date, this deferral does only apply to those who are self employed, therefore individuals with dividend or rental income should expect that their July payment on account is due as normal. This should be confirmed in due course.

For any businesses facing cashflow issues, the business interruption loan scheme should be available this week with further details expected today. It is anticipated that this will provide businesses with adequate resources in the short-term until other measures are up and running (such as the job retention scheme).

Please follow us on social media for more regular updates:

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Please do not hesitate to contact us should you have any questions regarding the above measures or any other concerns. We are here to support our clients during these difficult times.  

18/03/2020

Support Measures For Individuals and Businesses

Further to the budget last week, yesterday evening the government announced further support measures for individuals and businesses affecting by the COVID-19 pandemic.  The new measures increase the value of the rescue package to 330billion pounds in an effort to support the economy.  Chancellor Rishi Sunak also stated that if demand is greater than the initial 330billion pounds, he will go further and provide as much capacity as required.

The support measures announced yesterday and within the budget include:

Businesses

Statutory Sick Pay (SSP):

  • The government will support small and medium-sized businesses with the extra costs of paying COVID-19 related Statutory Sick Pay.  The refund will be limited to two weeks per employee.  Employers should maintain records of staff absences in order to reclaim the refund but should not require employees to provide a GP note.

  • The existing systems are not designed to facilitate such refunds, therefore the government will work with employers over the coming months to set up a repayment mechanism.

Business Rates Relief:

  • The government had already announced the Business Rates retail discount would be increased to 50% in 2020-21.  To support small businesses affected by COVID-19 the government is increasing it further to 100% for 2020-21.  The relief will also be expanded to the retail, leisure and hospitality sectors for 12 months.  Originally only businesses in those sectors with a rateable value below 51,000 pounds would be eligible but this will now apply to those above this threshold.

  • The government has also already announced the introduction of a 1,000 pounds Business Rates discount for pubs with a rateable value below 100,000 pounds in England for one year from 1 April 2020.  To support pubs in response to COVID-19 the discount will be increased to 5,000 pounds.

Small business grant funding:

  • Many small businesses pay little or no business rates because of Small Business Rate Relief (SBRR). To support those businesses, the government announced during the budget that they will provide 2.2billion pounds of funding for Local Authorities in England. This will provide 3,000 pounds to around 700,000 business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs. This figure has now been increased to 10,000 pounds.

Time to Pay:

  • Businesses and self-employed individuals in financial distress will receive support with outstanding tax liabilities.

  • HMRC have now set up a dedicated helpline to agree payment plans.  Late payment penalties and interest may also be cancelled.

Coronavirus Business Interruption Loan Scheme:

  • A business interruption loan scheme will be introduced temporarily to assist businesses with cashflow issues.  The government will provide lenders with a guarantee of 80% on each loan to ensure these are more accessible.  The scheme will support loans of up to 5million pounds in value (this was initially set at 1.2million pounds in the budget).   

IR35 rules:  

  • The controversial roll-out of the new private sector IR35 regime will be delayed by a year until April 2021.

Individuals

Statutory Sick Pay (SSP):

  • For individuals who have COVID-19 or have to self isolate in accordance with government guidance, SSP will be paid from the first day of sickness rather than the fourth, which is normally the case.

  • Guidance has been issued to employers advising them to use their discretion not to require medical evidence for COVID-19 related absences.

Support for those ineligible for SSP:

  • Support will be provided for those who are ineligible for Statutory Sick Pay, including individuals who are self-employed.

  • 'New style' Employment and Support Allowance will be payable for people directly affected by COVID-19 or self-isolating according to government advice from the first day of sickness, rather than the eighth day.

  • People will be able to claim Universal Credit and access advance payments where they are directly affected by COVID-19 (or self-isolating), without the current requirement to attend a jobcentre.

  • During the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating according to government advice for the duration of the outbreak, ensuring self-employed claimants will be compensated for losses in income.

Hardship Fund:

  • The government will provide Local Authorities in England with 500million pounds of new grant funding to support economically vulnerable people and households in their local area.  The government expects most of this funding to be used to provide more council tax relief, either through existing Local Council Tax Support schemes, or through complementary reliefs.

Mortgage 'Holiday':

  • For individuals who are in financial difficulty due to the coronavirus, mortgage lenders will offer a three-month mortgage 'holiday'.

We expect to receive further announcements in the coming days.  Some possible measures include:

  • Support for airlines and airports.
  • Measures to help those who are renting.

We will be providing regular updates across our social media.

Please follow us on Twitter and LinkedIn to ensure you are kept up to date.

Twitter - https://twitter.com/AMRbookkeeping1

LinkedIn - https://www.linkedin.com/company/8618466

If you are not on social media but would like to receive regular updates, please let us know and this can be arranged.

If you have any questions, please do not hesitate to get in touch.

We will be here to support our clients during these uncertain times.

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