I hope you are keeping safe and well.
6th November 2020 – Hillmans Weekly Update
Below I have summarised all the main tax related updates we have seen this week.
· New Financial Support for Jobs and Businesses
· Summary of the new lockdown measures for England
· Top up your Bounce Back Loan
· Airbnb Reporting Property Rental Details to HMRC
My team and I will continue to provide clients with an uninterrupted service during the second lockdown, so if you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact us.
I hope you have a good weekend.
Stay safe and well.
Steven Hillman BSc (Hons) ACA
Tel: 01934 444100
New Financial Support for Jobs and Businesses
Following the Prime Minister Boris Johnsons announcement over the weekend of a second national lockdown for England, it has been a busy week with several updates announced from the Government to existing support packages, together with new business grants available.
The headline news for clients to be aware of is that the Government will:
- Extend the Furlough Scheme (Coronavirus Job Retention Scheme) until the end of March 2021
-Not pay the Job Retention Bonus in February 2021 but instead redeploy a retention incentive at some future point
-Increase the third self-employed grant, covering November to January, from 55% to 80% of trading profits
Update to the Furlough Scheme:
The Coronavirus Job Retention Scheme (CJRS) will now run until the end of March with employees receiving 80% of their current salary for hours not worked.
Update to The Self Employment Income Support Scheme Grant (SEISS):
The SEISS Grant will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
Eligibility criteria appears to be the same as for the previous two SEISS grants.
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.
New Business Grants:
Businesses required to close in England due to local or national restrictions will be eligible for the following:
Rest assured we will keep you fully informed of the new measures and how to claim for Government support packages as we get further details.
Summary of the new lockdown measures for England
Prime Minister Boris Johnson announced over the weekend a second national lockdown for England to prevent a "medical and moral disaster" for the NHS.
Pubs, restaurants, gyms and non-essential shops will close for four weeks from Thursday 4 November, he said. Schools, colleges and universities will stay open.
Summary of the new lockdown measures for England:
• People should stay at home unless they have a specific reason to leave, such as work which cannot be done from home and education
• People are allowed to leave home for exercise, medical reasons, food and other essential shopping
• Providing care for vulnerable people or for volunteering is permitted
• Meeting indoors or in private gardens is not allowed
• Construction sites and manufacturing workplaces can remain open
• Leisure and entertainment venues, including gyms, will close
• Individuals can meet one other person from another household outside in a public place
• Pubs, bars, restaurants and non-essential retail across the nation will close - takeaways and click-and-collect shopping remain open
• People are still allowed to form support bubbles - single adults living alone - or single parents whose children are under 18 - can form a support bubble with one other household
• Children can move between homes if their parents are separated
• Clinically vulnerable people are asked to be "especially careful" and people are not being asked to resume shielding
Top up your Bounce Back Loan
The Government has announced that they plan to extend the application deadline for loan guarantee schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021. This will give businesses two extra months to make loan applications (relative to the current deadline of 30th November).
The Government will also adjust the Bounce Back Loan Scheme rules to allow those businesses who have borrowed less than their maximum (i.e. less than 25% of their turnover) to top-up their existing loan.
Businesses will be able to take-up this option from next week; they can make use of this option once. The Government understands that some businesses didn’t anticipate the disruption to their business from the pandemic would go on for this long; and it is hoped this amendment will ensure that they are able to benefit from the loan scheme as intended.
Airbnb Reporting Property Rental Details to HMRC
In non-COVID news, you may have seen in the newspapers that Airbnb will share data with HMRC about the earnings of hosts (those who let out property) on its UK platform in the years 2017/18 and 2018/19.
It is anticipated that HMRC will use this data to open enquiries into the tax affairs of individuals who have not declared letting income for 2017/18 and 2018/19. The deadline for opening an enquiry into a self-assessment return for 2018/19 is 31 January 2021, if the return was issued and submitted on time. The discovery rules allow HMRC to go back much further, potentially up to 20 years in some cases if the property income has not previously been reported.
RENT COVERED BY RENT A ROOM RELIEF
For many property owners the rental income will be tax free if it is within the £7,500 rent a room relief and will not even need to be reported. This applies where room(s) in the taxpayer’s main residence are rented out, typically to lodgers.
Where the house is owned jointly they would qualify for £3,750 each tax free.
BRING YOUR TAX AFFAIRS UP TO DATE
2018/19 tax returns can be amended by the taxpayer up until 31 January 2021. Where the omitted property income or gain relates to earlier tax years the taxpayer should consider disclosing using HMRC’s let property campaign.
If this affects you, we can assist you in putting together the details that HMRC require.