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04.03.21-Extension to the Coronavirus Job Retention Scheme

Extension to the Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September 2021.
The UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.
For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
You will need to continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, you will need to fund the difference between this and the CJRS grants yourself. You can also top up wages above the 80% if you wish, but you are not required to do so.
You must continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from your own funds.

CJRS eligibility from May

For periods from 1 May 2021 onwards, you will be able to claim for eligible employees who were employed by you and on your PAYE payroll on 2 March 2021. This means you must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying us of earnings for that employee.
You and your employees do not need to have benefitted from the scheme before to make a claim, as long as you meet the eligibility criteria.

04.03.21- Corporation tax to rise to 25%- but a small companies rate will stay at 19%

The government have stated-To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.

03.03.21-Budget 2021-Key highlights

Here are some of the key highlights from the 2021 budget-

An extension of the Coronavirus Job Support Scheme to September 2021 across the UK.

An extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.

An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market and protect and create jobs.

A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.

£5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.

A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.

Extension of the Film & TV Production Restart scheme in the UK, with an additional £300 million to support theatres, museums and other cultural organisations in England through the Culture Recovery Fund.

Six-month extension of the £20 per week Universal Credit uplift in Great Britain, with the Northern Ireland Executive receiving additional funding to match the increase. A one-off payment of £500 to eligible Working Tax Credit claimants across the UK.

Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.

750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.

Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.

£7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.

Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.

More than doubling the legal limit for single contactless payments, from £45 to £100

£10 million to support veterans with mental health needs across the UK.

£19 million to tackle domestic abuse in England and Wales, with funding for a network of ‘Respite Rooms’ to support homeless women and a programme to prevent reoffending.

£90 million funding to support our government-sponsored national museums in England due to the financial impact of Covid-19.

£300 million for major spectator sports, supporting clubs and governing bodies in England as fans begin to return to stadia.

Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.

To further support the cashflow of businesses, the government is extending the loss carry back rules worth up to £760,000 per company.

£100 million for a new Taxpayer Protection Taskforce to crack-down on COVID fraudsters who have exploited UK Government support schemes.

Maintaining the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026.

To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.

Maintaining inheritance tax thresholds at their current levels until April 2026.

Fuel duty will be frozen for the 11thconsecutive year.

Alcohol duties will be frozen across the board for the second year running saving drinkers £1.7 billion.

Capping the amount of SME payable R&D tax credit that a business can receive in any one year at £20,000 (plus three times the company’s total PAYE and NICs liability).

Maintaining the Lifetime Allowance at its current level of £1,073,100 until April 2026.

The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.

03.03.21-New Super-Deduction introduced in the budget today.

A new 130% first-year capital allowance for qualifying plant and machinery assets.

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

a 130% super-deduction capital allowance on qualifying plant and machinery investments
a 50% first-year allowance for qualifying special rate assets
The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.

The government are hoping this super-deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.

26.02.21- Construction Industry -reverse charge starts 01.03.21

REVERSE CHARGE VAT- 01.03.21
VAT changes will take place on 1 March 2021 that will affect all VAT registered builders who work for construction industry clients.
A lot of people working in the construction industry are still unclear of what they need to do, and we are helping client here at Brotherton’s with all the issues and questions they have.

ONWARD SUPPLY TO ANOTHER TRADER.
The rules for the reverse charge apply if a subcontractor is working for a main building contractor on a specific project. The customer must be registered for the Construction Industry Scheme (CIS) and the work in question must come within the scope of the CIS scheme. All work, both 20% and 5% work are applicable here. However, the main condition for the reverse charge rules to apply in a particular circumstance, is that the business receiving the supplies from the other builder must be making an onward supply of those services to another customer.

MAIN CONTRACTOR – END USER OR INTERMEDIARY SUPPLIER

It must be ascertained if the main contractor is classed as either an ‘end user’ or ‘intermediary supplier’ for the services in question: If they are classified as either of these two things, then normal rules would apply on that project and VAT would be charged as normal. It is only when the main contractor is making an onward supply of those services to another customer that the reverse charge rules will be applicable on a particular project.

So, we can see it is important to understand the definition of END USER and INTERMEDIARY SUPPLIER.

END USER
End user: This would be relevant if the work being done is not relevant to an onward supply of construction services made by the main contractor. For example, it might relate to building work carried out at its own head office and not for one of its customers buildings or sites. In this situation, the onus is on the main contractor to advise the sub-contractor that it is an ‘end user’ for that particular job. The sub-contractor will then charge 20% VAT on his invoice in the normal way.

INTERMEDIARY SUPPLIER
This is a business that is registered for both CIS and VAT and is connected or linked to end users. The connection is based on Companies Act 2006 s 1161; (the two entities are in the same corporate group or undertaking). A link will exist if both the intermediary supplier and end user have a relevant interest in the same site where the building work is taking place. This may be where the relationship is such as a landlord and tenant relationship. In this situation, even though the intermediary supplier is making an onward supply of construction services to the end user, the supplies it receives from other builders will be subject to normal VAT rules rather than the reverse charge. So again, the sub-contractor builder will charge VAT as normal.
So, we can see the main thing to identify, is who we are selling to as a sub-contractor and what their relationship is to the overall project. We have had clients saying to us that this will be difficult to ascertain in certain circumstances. However, it is the customer that is responsible for notifying the sub-contractor of their relationship to the project.

CUSTOMERS RESPONSIBILITY
The customer receiving building services must always notify the supplier in writing of the end user or intermediary supplier situation. In HMRC’s guidance, they suggest that the supplier should include a statement in the terms and conditions of a contract along the lines of: ‘We will assume you are an end user or intermediary supplier unless you say you’re not.’ The builder supplying services is therefore adopting a cautious approach of charging VAT on all invoices unless the customer says otherwise.

As soon as your customer notifies you they are not the end user or intermediary supplier and there is a onward supply to another trader, then you will have to reverse charge and apply the new rules.

IF YOU ARE THE MAIN CONTRACTOR- PROCEED WITH CARE-
It is important that if you are the customer of other building services which are covered by these rules it is crucial the customer deal with this situation properly. If they are for instance, working on a project that is an onward supply and they are charged vat incorrectly by a supplier on that work the sub-contractor provides, then HMRC could argue that they need to assess this work under the proper reverse charge rules and will then potentially assess them on the reverse charge rule basis, leaving them with a double VAT charge. So, if you are a contractor buying in sub-contractor work from other builders, make sure you notify the sub-contractor of your status and if there is an onward supply the vat registered sub-contractor should reverse charge their services and not charge you vat. You will then account for the vat on your tax return.

INFORMATION TO BE INCLUDED ON A REVERSE CHARGE INVOICE

The information is the same as for a normal sale invoice;
However, the invoice must make it clear that the reverse charge applies. The amount of VAT to be accounted for by the customer on their VAT returns should be clearly shown, either as a total figure of £X or the VAT rate that applies to the job. The latter approach is useful if an invoice includes work subject to different rates of VAT. Wording such as: ‘Reverse charge – customer to pay the VAT to HMRC’ should be prominently recorded on the invoice.

GOODS included in the supply.

Where goods and building materials are provided together with construction services and in the course of the construction work, then the reverse charge also applies to these goods. There are likely to be cases where it may be very difficult to determine if there is a separate supply of goods that is excluded from the reverse charge, or whether they are to be included as part of a single supply of construction services. In these cases, a business will need to consider the position further to ensure the correct VAT treatment.

Lots of people have been calling the office for help with this and we are here to help anyone concerned with how to apply the new rules. Please call- 01527 433 111 or 0121 289 4433

Statutory Maternity Pay during the Pandemic.-21.02.21

21.02.21-The calculation of an employee’s statutory maternity pay (SMP) entitlement is usually based on their average weekly earnings during the calculation period. This period is the eight weeks leading up to the 14th week before their expected week of childbirth. HMRC have amended the rules on the calculation of SMP for employees who have been furloughed under the Coronavirus Job Retention Scheme. For periods of maternity leave beginning on or after 25 April 2020, if an employee was furloughed and on reduced wages during any part of the calculation period, their SMP should be calculated using the pay they would have earned had they not been furloughed, rather than the actual earnings in that period, which may have been reduced by the furloughed element of the wages.

VAT deferral new payment scheme – join from 23 February-20.02.21

20.02.21- If you deferred paying VAT due in the period from 20 March to 30 June 2020, you should pay it by 31 March 2021 if you can.

If you can’t afford to pay by 31 March 2021, you can join the VAT deferral new payment scheme and pay your deferred VAT over a longer period.

The online service will open on 23 February 2021 and close on 21 June 2021. You can make up to 11 monthly instalments, interest free. The earlier you join, the more months you can spread your payments across.
You can join the scheme online without the need to call – search ‘Pay deferred VAT’ on GOV.UK for more information and to join quickly and simply online when the scheme opens. Please call the office if you need any help with this. 01527 433111

Late Payment penalty for Self-assessment and extensions to payment deadlines. 19.02.21

19.02.21- Today HMRC has announced that Self assessment tax-payers will not be charged the initial 5% late payment penalty if they pay their tax or make a Time to Pay arrangement by 1 April.
The payment deadline for Self Assessment is 31 January and interest will be charged from 1 February on any amounts outstanding. The deadline has not changed, but this year, because of the impact of COVID 19, HMRC is giving taxpayers more time to pay or time to set up a payment plan.

Payment plans or payments in full must be in place by midnight on 1 April to avoid a late payment penalty.

HMRC recognises the pressure affecting customers due to the pandemic, and anyone worried about paying their tax should contact HMRC for help and support on 0300 200 3822.
The self-serve Time to Pay facility allows customers to spread the cost of their tax liabilities into monthly instalments until January 2022. Customers can set up a payment plan online. Please call the office on 01527 433111 if you need any help with this or any other issue.

Self Assessment customers who have yet to file their tax return should do so by 28 February to avoid a late filing penalty. Please call us if you need help with your filing requirements if we don’t already help you with this. Remember we are here to help.

Frequently asked questions about the CJRS-18.02.21

18.02.21-Frequently asked questions about the CJRS
You can find everything you need to know about the CJRS on GOV.UK by searching ‘Job Retention Scheme’, but here are some answers to the questions employers have been asking.

Will information for each branch of my company be published separately?
If there is more than one PAYE scheme attached to your company, we will publish your information together under one Company Registration Number on GOV.UK.

How do I ask HMRC not to publish my claim details?
If publishing your claim details could leave someone at risk of violence or intimidation, you can request for these not to be published by completing the online application form – go to GOV.UK and search ‘Ask HMRC not to publish your Coronavirus Job Retention Scheme claim details’.
Please submit your request by 23 February at the latest to allow us time to process your request before the publication date. Your agent can do this on your behalf.
HMRC will not publish your details until we have informed you of our decision on your request. You’ll only need to make this request once, as the decision will cover all CJRS claim periods starting from 1 December 2020.

What happens if I pay back my grants?
If you choose to pay back the money you have received, your details will be removed from the list of claims when it is next published (usually in the following month).

Can my employee work elsewhere if they’re furloughed?
If your employee has more than one employer they can be furloughed for each job. Employees can be furloughed in one job (and receive that furloughed payment) but continue working for another employer and receive their normal wages.
An employee can also take part in volunteer work during hours when they are furloughed, as long as it’s for another employer or organisation which is not connected with you.

Can I claim for employees who are training?
You can claim for employees who undertake training while they are furloughed, as long as they don’t provide services to, or generate revenue for your business or a linked or associated organisation. For more information, go to GOV.UK and search ‘Check if you can claim for your employees’ wages’.
For more information on training that is available for your employees, search ‘Career Skills and Training’ on GOV.UK.

Can I furlough an employee if they are unable to work because they have caring responsibilities or are classed as clinically extremely vulnerable?
If an employee asks to be furloughed, you can claim for them under the CJRS if:
• they are off work or on reduced hours due to caring responsibilities resulting from coronavirus, such as caring for children who are at home as a result of school or childcare closing
• they are clinically extremely vulnerable, or in the highest risk group for severe illness from coronavirus according to the public health guidance for your area.
For other circumstances where you can furlough an employee, go to GOV.UK and search ‘check which employees you can put on furlough’.
The decision to offer furlough rests with you as an employer.

Supreme Court backs small firms on business interruption claims-10.02.21

The UK’s Supreme Court has found in favour of small firms receiving payments from COVID-19 business interruption insurance policies.
The test case was brought against insurers by the Financial Conduct Authority (FCA). The ruling means that thousands of small businesses are now set to receive insurance payouts covering losses from the first national lockdown.
Commenting on the ruling, Flora Hamilton, Financial Services Director at the Confederation of British Industry (CBI), said:
‘At such an uncertain time, this court case provides much-needed clarity to companies across the UK, and relief for smaller firms struggling with cashflow.
‘This is significant news for insurers, and regulators will need to work closely with the industry as policies, products and processes are updated to reflect this ruling.’

Bonus of £1,000 to help businesses take on trainees

The government has announced that employers can now apply for a £1,000 bonus, a cash boost, to help them take on new trainees.
The new scheme will support young people to gain the skills and experience they need from the start, helping them to get a job, an apprenticeship, or to pursue further study.
The cash boost, which is available until 31 July 2021, will help businesses with the cost of providing a high-quality work placement for a trainee. This includes providing facilities, uniforms or helping with travel costs.
Businesses offering new traineeship opportunities will receive the £1,000 bonus for every trainee they take on, up to a maximum of ten trainees.
Employers can claim the cash incentive for all work placements that have been completed since 1 September.
Gillian Keegan, Minister for Apprenticeships and Skills, said:
‘We’re pulling out all the stops to help young people get the skills and confidence they need to progress. This cash boost will help employers of all sizes provide more traineeship opportunities to invest in their workforce so they can rebuild and grow, giving young people a vital route to start their apprenticeship journey, get their first job or go on to further study.
‘I strongly encourage as many employers as possible to apply now and take advantage of this fantastic offer so more young people can gain the skills they need to progress in their careers as we build back better from the pandemic.’

10.7 million taxpayers submitted their 2019/20 Self Assessment tax returns

HMRC has revealed that more than 10.7 million taxpayers submitted their 2019/20 Self Assessment tax returns by the 31 January deadline.
The remaining 1.8 million whose tax return is now late will not be charged a late filing penalty provided they submit their return online by 28 February.
Taxpayers who did not pay their Self Assessment tax bill by 31 January are now incurring interest on the outstanding balance and should pay their bill as soon as possible.
Taxpayers should pay any outstanding balance, or arrange a payment plan, before 3 March 2021 to avoid a 5% late payment penalty.
Those who are not yet able to file their tax return should pay an estimated amount as soon as possible, which will minimise any interest and late payment penalty.
Karl Khan, HMRC’s Interim Director General for Customer Services, said:
‘Thank you to the 10.7 million customers who have sent in their tax returns.
‘We won’t send anyone a late filing penalty if they complete their tax return by 28 February.
‘We know that many individuals and small businesses are finding it harder to pay this year, due to the pandemic. Anyone who can’t afford to pay their tax bill in full can set up a payment plan, once they’ve filed their return, to spread their tax bill into monthly instalments.’
There are several ways that taxpayers can pay their Self Assessment tax bill or an estimated amount. They can pay online, via their bank, or by post.
Anyone who cannot pay their bill in full can apply to spread the cost. Taxpayers can set up a payment plan, in up to 12 monthly instalments, online via https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments provided they meet the following requirements:
Taxpayers need to have no:
• outstanding tax returns
• other tax debts
• other HMRC payment plans set up.
The debt needs to be between £32 and £30,000.
The payment plan needs to be set up no later than 60 days after the due date for payment. Taxpayers should set up the payment plan as soon as possible, and certainly before 3 March to avoid a 5% late payment penalty.
Those who do not meet these requirements, or who need more than 12 months to pay their bill, can apply for a payment plan by speaking to one of HMRC’s debt advisers.
Interest accrues on all outstanding balances, including those in payment plans.
Self Assessment taxpayers who are required to make Payments on Account, and know their 2020/21 tax bill is going to be lower than in 2019/20, for example due to loss of earnings because of COVID-19, can reduce their Payments on Account. More information is available at https://www.gov.uk/understand-self-assessment-bill/payments-on-account.

Paying Deferred VAT

Paying your deferred VAT

Any VAT payments due between 20 March and 30 June 2020 were deferred by a lot of businesses until 31 March 2021.

The due date for this deferred VAT was originally on or before the 31st March 2021. There are now a couple of options for paying this…..

To pay this VAT, you can:

• pay in full on or before 31 March 2021
• opt in to a new scheme that allows you to pay in instalments, until January 2022.

If you want to opt in to the new payment scheme
The online opt in process will be available in early 2021. You must opt in yourself, agents cannot do this for you.

Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

The scheme will allow you to:

pay your deferred VAT in instalments without adding interest
select the number of instalments from 2 to 11 equal monthly payments
To use this scheme you must:

still have deferred VAT to pay
be up to date with your VAT returns
opt in before the end of March 2021
pay the first instalment when you opt in
If you opt in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.

Get ready to opt in to the new payment scheme
Before opting in you must:

create your own Government Gateway account if you don’t already have one
submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so
correct errors on your VAT returns as soon as possible
make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid.

You should also:

pay what you can as soon as possible to allow HMRC to show the correct deferred VAT balance
consider the number of equal instalments you’ll need, from 2 to 11 months.

Check if you can claim a grant through the Self-Employment Income Support Scheme

HMRC is advising the self employed that the Self-Employment Income Support Scheme (SEISS) has been extended. Taxpayers who were not eligible for the first and second grant will not be eligible for the third.
To make a claim for the third grant the taxpayer’s business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021, which they reasonably believe will have a significant reduction in their profits.
The third taxable grant is worth 80% of a taxpayer’s average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.
The online service to claim the third grant is open. Taxpayers should make their claim from the date HMRC give taxpayers either by email, letter or within the service. Eligible taxpayers must claim the third grant on or before 29 January 2021.
The grant does not need to be repaid, but will be subject to Income Tax and self-employed National Insurance and must be reported on the taxpayer’s 2020 to 2021 Self Assessment tax return. Taxpayers must keep evidence to support their claim.

Self assessment deadline approaching

The deadline for submitting your 2019/20 self assessment return is 31 January 2021. The deadline applies to taxpayers who need to complete a tax return and make direct payments to HMRC in respect of their income tax, Classes 2 and 4 National Insurance Contributions (NIC), capital gains tax and High Income Child Benefit Charge liabilities.
There is a penalty of £100 if a taxpayer’s return is not submitted on time, even if there is no tax due or the return shows that they are due a tax refund.
The balance of any outstanding income tax, Classes 2 and 4 NIC, capital gains tax and High Income Child Benefit Charge for the year ended 5th April 2020 is also due for payment by 31 January 2021. Where the payment is made late interest will be charged.
The first payment on account for 2020/21 in respect of income tax and any Class 4 NIC or High Income Child Benefit Charge is also due for payment by 31st January 2021.
HMRC revealed that more than 2,700 taxpayers filed their return on Christmas Day. If you would like help with your return or agreeing your tax liability, please contact us.

Self assessment taxpayers warned to watch out for scammers posing as HMRC

HMRC is warning self assessment taxpayers to be alert to the danger of scammers posing as the tax authority in the lead up to the tax return deadline.
Every year HMRC issues thousands of SMS messages and emails as part of its push to remind people to file before the 31 January deadline. HMRC says it is aware that fraudsters use calls, emails and texts to contact taxpayers.
In the last 12 months, HMRC has responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious webpages to internet service providers so that they can be taken down.
Many scams target customers to inform them of a fake tax rebate or tax refund. The imposters use language intended to convince the taxpayer to hand over personal information, including bank details, in order to claim the refund.
Karl Khan, Interim Director General for Customer Services at HMRC, said:
‘We know that criminals take advantage of the self assessment deadline to panic customers into sharing their personal or financial details and even paying bogus ‘tax due’.
‘If someone calls, emails or texts claiming to be from HMRC, offering financial help or asking for money, it might be a scam. Please take a moment to think before parting with any private information or money.’

Minimum Wage Increases from April 2021

Increased minimum wage rates have been announced to take effect from 1 April 2021.
The government has announced that the National Living Wage (NLW) will increase by 2.2% from £8.72 to £8.91, and will be extended to 23 and 24 year olds for the first time. For workers aged under 23, Commissioners recommended smaller increases in recognition of the risks to youth employment, which the current economic situation poses.
NLW and National Minimum Wage (NMW) rates will also increase as follows:

Rate from April 2020 Rate from April 2021 Increase
National Living Wage £8.72 £8.91 2.2%
21-22 Year Old Rate £8.20* £8.36 2.0%
18-20 Year Old Rate £6.45 £6.56 1.7%
16-17 Year Old Rate £4.55 £4.62 1.5%
Apprentice Rate £4.15 £4.30 3.6%
*Rate also applies to those aged 23 and 24

Bryan Sanderson, Chair of the Low Pay Commission, said:

‘Recommending minimum wage rates in the midst of an economic crisis coupled with a pandemic is a formidable task. The difficulty in looking forward even to next April is daunting. There are strong arguments concerning both low-paid workers – many performing critically important tasks – and the very real solvency risks to which small businesses are currently exposed. In these unprecedented conditions, stability and competence are prime requirements.
‘Our value as a social partnership is to use the imperfect economic evidence to produce a recommendation which is professionally researched and dispassionate. Most importantly, after much debate it has the support of the business, trade union and academic representatives who make up the Commission. We have opted for a prudent increase which consolidates the considerable progress of recent years and provides a base from which we can move towards the Government’s target over the next few years.’

Gifts to employees can be tax-free

Some employers may wish to give a small gift to their employees. As long as the employer meets the relevant conditions, no tax charge will arise on the employee.
A tax exemption is available which should help employers ensure that the benefits provided are exempt and do not result in a reportable employee benefit in kind. In order for the benefit to be exempt it must satisfy the following conditions:
• the cost of providing the benefit does not exceed £50 per employee (or on average when gifts are made to multiple employees)
• the benefit is not cash or a cash voucher
• the employee is not entitled to the benefit as part of a contractual arrangement (including salary sacrifice)
• the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties
• where the employer is a ‘close’ company and the benefit is provided to an individual who is a director, an office holder or a member of their household or their family, then the exemption is capped at a total cost of £300 in a tax year.
If any of these conditions are not met then the benefit will be taxed in the normal way subject to any other exemptions or allowable deductions.
No more than £50
One of the main conditions is that the cost of the benefit does not exceed £50. If the cost is above £50 the full amount is taxable, not just the excess over £50. The cost of providing the benefit to each employee and not the overall cost to the employer determines whether the benefit can be treated as a trivial benefit. So, a benefit costing up to £50 per employee whether provided to one or more employees can be treated as trivial. Where the individual cost for each employee cannot be established, an average could be used. HMRC examples consider various gifts including turkeys, bottles of wine and gift vouchers.
Further details on how the exemption works, including family member situations, are contained in the HMRC manual.
However if you are unsure please do get in touch before assuming the gift you are about to provide is covered by the exemption.

Get prepared for the end of the Brexit transitional period

It is time to prepare for the end of the Brexit transitional period.
Whilst the United Kingdom officially left the European Union (EU) on 31 January 2020, this prompted the start of an 11-month transitional period during which time the UK remains part of the Single Market, the EU Customs Union and the VAT Territory. The UK will leave the EU VAT Territory on 31 December 2020. After this date, Great Britain (England, Wales and Scotland) will not be subject to EU VAT legislation. Northern Ireland will remain subject to EU VAT legislation in respect of transactions involving goods, but not for services.
Acquisitions (purchases of goods from EU member states) will be treated as imports. A new system, Postponed Accounting, will be introduced and will apply to imports received from all over the world, with some exceptions such as low-value consignments. The system is intended to mitigate the cashflow disadvantage posed by paying import VAT upfront and waiting to reclaim it in a later VAT return. Under the new system, import VAT can be deferred and declared to HMRC in the VAT return for the period of importation. The VAT can be reclaimed in the same return subject to the normal rules for reclaiming input tax.
Dispatches (zero-rated sales of goods to business customers in EU member states) will be treated as exports. Exports are zero-rated, provided certain conditions are met.
Distance sales (sales of goods to non-business persons in the EU) will also be treated as exports. The EU distance-selling regime and thresholds will no longer apply to UK suppliers.
Customs changes
When the UK leaves the EU Customs Union on 1 January 2021 the UK will operate a full, external border with the EU. New border controls on imports from the EU to Great Britain will be introduced in stages, with customs declarations for goods which are not controlled being delayed until 30 June 2021.
Customs Duty
From 1 January 2021, there will be new rates of Customs Duty for imports – called the UK Global Tariff. To check the tariffs that will apply to different categories of imported goods, please see https://www.gov.uk/guidance/uk-tariffs-from-1-january-2021.
It is important to be ready for these changes. Some practical actions to take now include:
• Obtaining an Economic Operator Registration and Identification (EORI) number, which will be required when trading with the EU post Brexit. It is free to obtain an EORI number and you can do so by visiting https://www.gov.uk/eori.
• Deciding whether to use an agent freight forwarder to help with making customs declarations. The following guidance outlines the services they can provide: https://www.gov.uk/guidance/appoint-someone-to-deal-with-customs-on-your-behalf
• If you buy goods from the EU, checking whether those goods are ‘controlled’. Ascertaining which declarations are required and when they will need to be made. For more information please see https://www.gov.uk/guidance/list-of-goods-imported-into-great-britain-from-the-eu-that-are-controlled.
• Checking the UK Global tariff to see the rate of Customs Duty that is likely to apply to the goods you import.
• Deciding whether to use the Postponed Accounting system (https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return) to defer import VAT and familiarising yourself with the procedure for declaring the deferred import VAT on the VAT return.
If you require more information please contact us to discuss how we can help you move smoothly into 2021.
Internet link: GOV.UK transition campaign

ATT issues last call for firms seeking to use increased Annual Investment Allowance-Updated-17.11.20

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.’

Brexit imports and exports -Updated-14.11.20

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.

54,800 customers claim tax relief for working from home-Updated-12.11.20

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.’

Self assessment customers to benefit from enhanced payment plans-Updated-10.11.20

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.

Chancellor approves grants for businesses closed by lockdown-Updated-09.11.20

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.’

Increased support made available for the self employed-Updated-08.11.20

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.’

Furlough scheme extended-What Chancellor Rishi Sunak said- Updated-07.11.20

On 5 November, Chancellor Rishi Sunak announced that as part of the new national lockdown the Coronavirus Job Retention Scheme (CJRS) has been extended until the end of March 2021. This announcement updates the Prime Minister’s previous announcement on 31 October that the CJRS would be extended for a month until December.
The scheme has also reverted to its original level of support. Furloughed employees will receive 80% of salary for hours not worked and businesses asked only to cover national insurance and employer pension contributions.
The CJRS was due to have ended on 31 October after being scaled back to cover 60% of salaries during that month.
Chancellor Rishi Sunak said that the scheme will retain the flexible element and furloughed employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500.
A statement from the Treasury also confirmed that the Job Support Scheme (JSS), which had been due to launch on 1 November has now been postponed, and will not start until the CJRS has closed.
Chancellor Rishi Sunak said:
‘I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.
‘It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
‘Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.’

Extension of the Coronavirus Job Retention Scheme-Updated-06.11.20

The government is extending the CJRS to support individuals and businesses who are impacted by disruption caused by coronavirus (COVID-19) this winter. This is an extension of the CJRS and the scheme rules will remain the same except where we say otherwise.

The CJRS (also known as the furlough scheme) will remain open until 31 March 2021. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.

The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

Claims can be made by employers across the UK that meet the eligibility criteria.

1. Employers who can claim under the CJRS extension
Employers do not need to have used the CJRS previously.

Employers across the UK can claim, whether their businesses are open or closed.

2. Employees furloughed under the CJRS extension
2.1 Core employee eligibility criteria
Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee.

As under the current CJRS rules, employees can be on any type of employment contract.

2.2 Employees not claimed for previously under CJRS
Employees do not need to have been furloughed under the CJRS previously.

For employees that meet the eligibility criteria, and were previously furloughed, employers must use the same calculations for calculating reference pay and usual hours as CJRS.

For an employee who meets the criteria of the extended scheme but was not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used. For all other employees, employers must use the CJRS calculations for calculating reference pay and usual hours.

Employer contributions during the CJRS extension until January will be the same as in August 2020. This means that for hours not worked by their employee, employers will only be asked to cover National Insurance and employer pension contributions. The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

Employers will have to pay the employee’s wages for the hours they work as normal, as well as employer National Insurance and employer pension contributions.

2.3 Employees whose health has been affected by coronavirus or other conditions
Employees can be furloughed where they are unable to work because they:

are shielding in line with public health guidance (or need to stay at home with someone who is shielding)
have caring responsibilities resulting from coronavirus, including employees that need to look after children
The CJRS is not intended for short-term sick absences. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees.

Furloughed employees who become ill, due to coronavirus or any other cause, must be paid at least Statutory Sick Pay (SSP). As under the CJRS previously, it is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate.

2.4 Employees re-employed by their employer
Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.

Similarly, an employee who was on a fixed term contract, on payroll on 23 September, and that contract expired after 23 September can be re-employed and claimed for, provided that the other eligibility criteria are met.

2.5 When employees are on furlough
As under the CJRS previously, during hours which employees are recorded as being on furlough, they cannot do any work for their employer that makes money or provides services for their employer or any organisation linked or associated with their employer.

Employees can:

take part in training
volunteer for another employer or organisation
work for another employer (if contractually allowed)

2.6 Maintaining employee rights
Employees will retain their rights at work, including:

SSP
annual leave
maternity and other parental rights
rights against unfair dismissal
redundancy payments
to be paid at least statutory National Minimum Wage for hours worked
In addition, as with the current CJRS:

the Working Tax Credits working hours easement will apply for the period of this CJRS extension
for employees on statutory parental leave, there will be no change from CJRS

3. Other conditions of claiming CJRS
3.1 Paying employees’ taxes
Employees will still pay the taxes they normally pay out of their wages.

Employers must deduct and pay to HMRC Income Tax and employee National Insurance contributions on the full amount that they pay the employee, including any scheme grant. The CJRS grant does not cover employers’ National Insurance contributions or pension contributions.

Employers must also pay to HMRC the employer National Insurance contributions on the full amount that they pay the employee, including any scheme grant.

3.2 Employer – employee agreement
Employers do not need to place all of their employees on furlough and they can fully furlough employees if they wish. Employees cannot undertake any work for their employer during the hours that the employer records them as being on furlough.

There is no minimum furlough period. Flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.

Although flexible furlough agreements can last any amount of time, unless otherwise specified the period claimed for must be for a minimum claim period of 7 consecutive calendar days.

Employers can:

fully furlough employees – this means the employee does no work for the employer
flexibly furlough employees – this means employees can work for any amount of time, and any work pattern and claim the grant for the furloughed hours, with reference to hours the employee would usually have worked in that period
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the CJRS process, including deciding who to offer furlough to, employment, equality and discrimination laws will apply in the usual way.

To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed.

Employers must:

make sure that the agreement is consistent with employment, equality and discrimination laws
keep a written record of the agreement for 5 years
keep records of how many hours their employees work and the number of hours they are furloughed (for example, not working), for 6 years
The employee does not have to provide a written response and employers do not need to place all their employees on furlough.

The terms of any agreement must:

reflect the hours the employee has actually worked or not worked over the period of the agreement
allow the employer to satisfy the terms of CJRS so they can make a claim in relation to hours not worked
Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim as long as it is made according to the conditions above. Only retrospective agreements put in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.

4. What employers can claim – calculations
This policy paper applies for CJRS claims for periods starting on or after 1 November 2020.

The closing date for claims up to and including 31 October remains 30 November 2020, using existing CJRS guidance.

All employees on an RTI submission on or before 19 March 2020 will be able to use the CJRS calculations as applied in August 2020 for reference pay and usual hours. However, for new employers claiming and new employees hired between 20 March 2020 and 30 October 2020 the CJRS methodology will update the reference pay and usual hours to take account of the period covered by the extension.

For employees on fixed pay employed on or after 20 March 2020, the last pay period prior to 30 October 2020 provides the basis for calculation. For employees on variable pay or hours, employed after 20 March, the average of tax year 2020 to 2021 up to the start of the furlough provides the basis for calculation.

4.1 For employees who were previously eligible for CJRS, the calculation rules will remain the same
The existing CJRS calculation of 80% of usual wages and of usual hours will apply to all employees who were eligible under CJRS even if a claim was not made in respect of that employee under CJRS to 31 October 2020.

Where an employee was not previously eligible for CJRS, the calculation will take account of updated reference periods. Full details of the calculation will be shared in guidance on 10 November 2020.

For claims between 1 November 2020 and 31 January 2021 employers will be able to claim a grant for 80% of usual wages up to a maximum government grant of £2,500 per month per employee for the time the employee spends on furlough. The £2,500 cap is proportional to the hours not worked.

The government will cover the cost of 80% of the salary of every eligible employee, up to a maximum government grant of £2,500 per month per employee for the time the employee spends on furlough.

Employers will need to:

pay their employees for the time worked and the government grant for the time not worked;
operate PAYE on behalf of their employees, as per CJRS
pay employer National Insurance contributions and pension contributions for their employees on the full amount that they pay the employee, including any scheme grant
Employers will not be:

required to contribute towards 80% of the employees’ usual wages for the hours not worked
able to claim for employer National Insurance contributions or pension contributions
Employers can top up employee wages above the maximum salary threshold at their own expense.

4.2 Reference pay: calculating 80% of wages
If an employee was not previously eligible for CJRS, 80% of wages must be calculated for employees:

on a fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020
whose pay varies – 80% of the average payable between (these dates are inclusive) the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins
80% of wages is capped at the maximum wage amount which will be calculated in the in the way it was for CJRS before the extension

4.3 Usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work
If an employee was not previously eligible for CJRS, then usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, will be the contracted hours worked in the last pay period ending on or before 30 October 2020.

4.4 Usual hours for an employee who works variable hours
If an employee was not eligible for CJRS then the usual hours will be the average hours worked between (these dates are inclusive):

the start date of the 2020 to 2021 tax year, (for example, 6 April 2020)
the day before their CJRS extension furlough periods begins
Example

Working out usual hours for an employee not previously eligible for CJRS
Sam has been employed by A Ltd since April 2020. A Ltd was not eligible to claim a CJRS grant for Sam. Sam is paid weekly. Sam has always been contracted to work a fixed number of hours per week (30 hours), and their pay does not vary according to the number of hours they work.

For the claim period 16 November 2020 to 22 November 2020, Sam’s usual hours will be 30 hours, being the number of hours Sam was contracted for on 25 October 2020, the end of the last pay period ending before 30 October.

5. How employers can claim under the CJRS extension
The extended CJRS will operate as the previous scheme did, in several respects:

employers must report and claim for a minimum period of 7 consecutive calendar days
employers will need to report actual hours worked and the usual hours an employee would be expected to work in a claim period
for hours worked, 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
The claim period must start and end within the same calendar month. If the pay period includes days in more than one month. Each of those claims will need to be calculated separately. Claim periods cannot overlap, and employees claimed for will need to be included in each separate claim made.

An employer can make a claim in anticipation of an imminent payroll run, at the point they run their payroll or after they have run their payroll. There will be a short period when the legal terms of the scheme and system are updated. Businesses will need to claim in arrears for this period. There will be no gap in eligibility of support between the previously announced end-date of CJRS on 31 October 2020 and this extension starting 1 November 2020.

Employers will be able to claim from 8am on Wednesday 11 November 2020. Claims can be made:

in respect of an employee for a minimum 7 day claim window
in advance
in arrears for the period from 1 November 2020 to 11 November 2020, from the week commencing 9 November 2020
Claims relating to November 2020 must be made by 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim. The closing date for claims up to and including 31 October remains 30 November 2020.

Grants payments are anticipated 6 working days after the first claims.

Agents who are authorised to do PAYE online for employers will be able to claim on their behalf.

Claims can be made from 8am Wednesday 11 November 2020.

Full guidance will include further detail on how to claim and will be published on 10 November 2020.

6. Interaction with other Coronavirus Job Schemes
The launch of the Job Support Scheme has been postponed because of national developments related to the coronavirus pandemic.

The Job Retention Bonus (JRB) will not be paid in February 2021 and a retention incentive will be deployed at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the CJRS is now being extended to 31 March 2021, the policy intent of the JRB no longer applies.

Chancellor extends the furlough scheme to 31.03.2021- Announced today-05.11.20

Today the Chancellor has announced that CJRS will be extended until the end of March 2021 for all parts of the UK. For claim periods running to 31 January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. The UK Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

It was also confirmed that the Job Retention Bonus will no longer be paid in February 2021, as CJRS will be available at that time. An alternative retention incentive will be put in place at the appropriate time.

We are here to help clients and non-clients with this, so please call the office- 01527 433 111 or 0121 289 4433

We will be posting further updates and information here, as it becomes available.

VAT reverse charge for building and construction services-03.11.20

From 1 March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services.

The charge applies to standard and reduced-rate VAT services:

for individuals or businesses who are registered for VAT in the UK reported within the Construction Industry Scheme.

What you need to do
You’ll need to:

Check when you must use the reverse charge on your sales, purchases or both.

Find out how the charge works if you supply services.

Find out how the charge works if you buy services.

How to prepare
You’ll need to:

1-Make sure your accounting systems and software can deal with the reverse charge.
2-Consider whether the change will impact your cash flow.
3-Make sure all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it will work
4-If the VAT reverse charge does not apply you should follow the normal VAT rules.

When you must use the reverse charge
You must use the reverse charge for the following services:

Constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services.
Constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence.
Installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure.
Internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
Painting or decorating the inside or the external surfaces of any building or structure.
Services which form an integral part of, or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunneling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works.
When you must not use the reverse charge
Do not use the charge for the following services, when supplied on their own:

Drilling for, or extracting, oil or natural gas
Extracting minerals (using underground or surface working) and tunneling, boring, or construction of underground works, for this purpose.
Manufacturing building or engineering components or equipment, materials, plant or machinery, or delivering any of these to site.
Manufacturing components for heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems, or delivering any of these to site.
The professional work of architects or surveyors, or of building, engineering, interior or exterior decoration and landscape consultants.
Making, installing and repairing art works such as sculptures, murals and other items that are purely artistic signwriting and erecting, installing and repairing signboards and advertisements.
Installing seating, blinds and shutters.
Installing security systems, including burglar alarms, closed circuit television and public address systems.

We will be updating further information on the reverse charge and will be helping clients configure their systems to ensure they know what to do, well before the 01.03.21 deadline.

If you need help with this, please call us on 01527 433 111 or 0121 289 4433

Self-Employment Income Support Scheme Grant Extension-Updated 02.11.20

The UK Government recognises the continued impact that coronavirus (COVID-19) has had on the self-employed and has taken action to provide support.

The Self-Employment Income Support Scheme Grant Extension provides critical support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021.

1. Who can claim
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.

2. What the Grant Extension covers
The extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.

The first grant will cover a three-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 55% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £5,160 in total.

The grant will be increased from the previously announced level of 40% of trading profits to 80% for November 2020. This therefore increases the total level of the grant from 40% to 55% of trading profits for 1 November 2020 to 31 January 2020.

The Government are providing broadly the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme in November due to its extension. And then the Job Support scheme in December and January.

The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.

The grants are taxable income and also subject to National Insurance contributions.

3. How to claim
The online service for the next grant will be available from 30 November 2020. HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course. We will update the guidance on procedures here too.