HMRC stop sending paper tax returns

HMRC is to stop automatically sending paper Self-Assessment returns and encourage tax payers to submit their tax returns online. 

Whilst this change does not prevent a tax payer filing a paper return if they choose to do so, the notice to file will tell taxpayers that HMRC intend to file their returns digitally, and provide them with information about managing their tax affairs through their Personal Tax Accounts.

If you don't have a Personal Tax Account you can register for one here: https://www.gov.uk/personal-tax-account.

Or please drop me a line and I'd be pleased to help you set one up. 

All the best,

Steve

Steven Hillman ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk/covid-19-updates

Making Tax Digital Phase 2 postponed to April 2021 due to COVID-19

HMRC has announced that the second phase of Making Tax Digital for VAT (‘MTD’), originally scheduled for April 2020, has now been delayed by 12 months and will come into effect on the 1st April 2021. This is to help ease against the impact of the COVID-19 crisis.

Phase 2 relates to businesses who are VAT registered but whose sales are under the VAT threshold (currently £85,000). 

This 'phase two' required businesses to digitally link their software all the way from entry of each transaction at one end of the process through to submission of the VAT return at the other, irrespective of how many pieces of software were used.

This means the rules on maintaining digital links from original transaction to tax return will not be enforced until 1 April 2021.

Businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place. HMRC have updated VAT Notice 700/22 Making Tax Digital to reflect this extension.

Digital links summary

MTD requires businesses to maintain relevant information about sales and purchases in an electronic format, using 'functional compatible software'. This means a software programme which allows information to be recorded in an electronic form which sends and receives information to/from HMRC using the API platform (including API-enabled spreadsheets). It is possible to use more than one software programme but there must be a digital link between them.

Broadly, the functions of the compatible software must include:

- keeping records in a digital form as required by regulations;
- preserving digital records in a digital form as required by regulations;
- creating a VAT return from the digital records held in functional compatible software and providing HMRC with this information digitally;
- providing HMRC with VAT data on a voluntary basis;
- receiving information from HMRC via the API platform in relation to a relevant entity's compliance with obligations under the regulations.


Digital records can be kept in a range of compatible digital formats. They do not all have to be held in the same place or on one piece of software. For example, a spreadsheet can be a component of digital record keeping provided the product that consolidates records, or summary records from the spreadsheet, can exchange data digitally with HMRC.

If you have any queries about this, please drop me a line. 

Best wishes, 

Steve

Steven Hillman ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk/covid-19-updates 

Coronavirus and R&D Tax Credits

Research and development (R&D) tax incentives are an effective way for companies to get a cash rebate from HMRC. This incentive and cash rebate could be more important than ever if you are struggling with cash flow due to the coronavirus.

Many companies are taking advantage of the lock-down period and time available to file an R&D claim with HMRC. HMRC are processing claims more rapidly at present to better support businesses cash flows, quoting up to 5 weeks rather than the 8-10 weeks previously.

Whilst rebates vary, over the past 6 months the average claim size for our clients has been £18,000! 

It is a common misconception that to be engaged in Research and Development activities that a company must be running labs packed full of people in white coats. This is not the case! You simply must have attempted to overcome scientific or technological uncertainties by creating new or enhancing existing products, services, software or processes in order to have a qualifying R&D activity.

You would be surprised at how many companies fulfil these criteria without realising they are eligible for a significant tax benefit.

If you would like to discuss making an R&D claim further, please drop me a line.

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant
Tel: 01934 444100

New 100% government backed loan scheme for small business

The Chancellor Rishi Sunak told the House of Commons today that small businesses are to get access to 100% taxpayer-backed loans after they raised concerns about slow access to existing coronavirus rescue schemes.

The scheme will start next week, offering firms loans up to £50,000 within days of applying.

The key points to note are:

• businesses will be able to borrow between £2,000 and £50,000 and access the cash within days

• loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.

The government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

For more information visit: https://www.gov.uk/government/news/small-businesses-boosted-by-bounce-back-loans

Coronavirus grants for young entrepreneurs

The Prince’s Trust has launched a new grant to assist young business owners during the Coronavirus crisis. The grant is available for business owners aged 18 to 30, who set up their business in the last four years and do not have any other source of income during the Coronavirus crisis.

Grants can be used to maintain core business operations during the crisis, as well as meet any existing financial commitments, such as paying for essential equipment or settling invoices from suppliers. Additionally, grants will also support young people to diversify their business to respond to opportunities created by the crises. In conjunction with grants, the initiative will offer one-to-one support and guidance to any applicants who need it.

You can apply for the grant here: https://www.princes-trust.org.uk/about-the-trust/coronavirus-response/enterprise-relief-fund

Weekly Update 24.04.2020

Weekly Update 24.04.2020

Below I have summarised all the main tax updates we’ve seen this week from HMRC.

•    HMRC Online Service Now Open for Coronavirus Job Retention Scheme
•    Coronavirus Future Fund for tech start-ups
•    Coronavirus and VAT 
•    Turn2us Benefits Calculator

As always if you need any support or advice please don’t hesitate to contact me.

Have a great weekend!

Coronavirus Future Fund for tech start-ups

The government has announced a new Future Fund scheme, issuing convertible loans to help start-ups struggling due to the coronavirus outbreak. The loans will range from £125k to £5million.

A convertible loan gives the government the option to convert the loan to shares.

The loans will be available from May until September. 

It is important to note the future fund will only be available if a business is unable to access the CBILS.

You’re eligible if your business:

-is based in the UK

-can attract the equivalent match funding from third-party private investors and institutions

-has previously raised at least £250,000 in equity investment from third-party investors in the last 5 years

Visit https://www.gov.uk/guidance/future-fund for more information. 

Coronavirus and VAT

Coronavirus and VAT 

If your sales turnover has fallen due to the Coronavirus, it may be beneficial to review whether it would be worth your business deregistering for VAT. You can deregister if you think your turnover will be below the VAT deregistration threshold of £83,000 for the next 12 months.

We can also review whether it would be worth moving to a cash accounting or flat rate scheme. 

Please drop us a line if you would like to discuss this further. 

Turn2us Benefits Calculator

Turn2us is a national charity helping people when times get tough.

Their website has a very useful Benefits Calculator to find out which welfare benefits you may be entitled to.

Visit https://www.turn2us.org.uk/ for more information. 

HMRC Online Service Now Open for Coronavirus Job Retention Scheme

Coronavirus Job Retention Scheme



The HMRC online service is now open for employers to make a claim. You need to apply by 22nd April to receive money before the end of the month.

To access the service visit https://www.access.service.gov.uk/login/signin/creds

If you are a Hillmans client and we prepare your payroll for you, you can rest assured we will take care of this for you. 

Weekly Update 17.04.2020

Weekly Update 17.04.2020

Below I have summarised all the main tax updates we’ve seen this week from HMRC.

-Chancellor extends furlough scheme to end of June
-HMRC issue updated guidance for the Self-employment Income Support Scheme
-Furlough scheme cut-off date extended to 19 March
-List of lenders offering 3 month mortgage holidays
-Changes to off-payroll working rules delayed until 2021
-Qualification for retail, hospitality or leisure business rates relief due to coronavirus

As always if you need any support or advice please don’t hesitate to contact me.

Have a great weekend!

Chancellor extends furlough scheme to end of June

Coronavirus Job Retention Scheme extended by one month to reflect continuing social distancing measures.

Following on from yesterday’s announcement to keep the social distancing measures in place, Rishi Sunak said the Coronavirus Job Retention Scheme (CJRS) would now be open until the end of June – providing businesses with the certainty they need.

The scheme, which allows firms to furlough employees with the government paying cash grants of 80% of their wages up to a maximum of £2,500, was originally open for three months and backdated from the 1 March to the end of May. 

However, the Chancellor said he would keep the scheme under review and extend it if necessary.

You can read full details here at the HMRC website: https://www.gov.uk/government/news/chancellor-extends-furlough-scheme-to-end-of-june

HMRC issue updated guidance for the Self-employment Income Support Scheme

HMRC have issued further guidance in relation to the grant support scheme for the self-employed. 

The key updates include:

• HMRC are aiming to contact self-employed individuals in mid-May, inviting them to make an application.  Payments are expected to be made in June.
• Applicants will need to confirm to HMRC that their business has been adversely affected by coronavirus. HMRC have stated they will “as usual use a risk based approach to compliance”. 
• HMRC have now confirmed how ‘trading profit’ is defined for the purposes of the scheme.
• HMRC have clarified the definition of ‘total income’. A condition of the scheme is that the trading profits are more than 50% of the person’s total income. 
• HMRC have confirmed that individuals may also make an application for Universal Credit at the same time as making a claim under the grant support scheme. It is important to note that the support received under the scheme must be declared for the purposes of Universal Credit.
• Amendments made to personal tax returns after 26 March 2020 will be ignored for the purposes of establishing an individual’s eligibility.

You can read the full details on the HMRC website here: https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme

Major new update to the Job Retention Scheme

Furlough scheme cut-off date extended to 19 March HMRC have released a major new update to the Job Retention Scheme. It is now possible to claim for furloughed employees that were on a PAYE payroll scheme on or before 19th March 2020, and in addition were notified to HMRC on an RTI submission on or before 19th March 2020. This has changed from the previously advised date of the 28th February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before the 19th March 2020. You can read further details here: https://www.gov.uk/government/news/furlough-scheme-cut-off-date-extended-to-19-march

Changes to off-payroll working rules delayed until 2021

Amid concerns about their potential impact during the coronavirus pandemic, the government has announced a one year delay to changes to the off payroll working rules, due to take effect from April 2020.

In an announcement at the end of the parliamentary debate on the Budget speech, Steve Barclay, chief secretary to the Treasury, said that the government is postponing the reforms to the off payroll working rules (known as the IR35 rules) from April 2020 to April 2021.

Off-payroll working rules, known as IR35, were introduced in 2000 to ensure that someone working like an employee, but through their own limited company, pays broadly the same tax as someone employed directly.

The reforms, announced in the 2018 Budget, are designed to tackle non-compliance with the off-payroll working rules. The reforms make medium and large organisations in the private and third sectors responsible for determining the tax status of contractors and ensuring that the right employment taxes are paid. The reforms have previously been implemented in the public sector.

The government continues to believe that it is right to address the fundamental unfairness of non-compliance with the existing off-payroll working rules, however the government also recognises that the reforms would be a significant change for both businesses and contractors. Delaying means changes will not need to be implemented until next year.

The new introduction date will be legislated in the Finance Bill 2020.

Qualification for retail, hospitality or leisure business rates relief due to coronavirus

It has been brought to our attention this afternoon that there is some confusion around who qualifies for the “retail, hospitality or leisure business rates relief due to coronavirus” You can find out more about how it works locally here… https://www.n-somerset.gov.uk/my-business/business-rates-payments/covid-19-business-grants/covid-19-grants/ However, at the moment, there is no definitive list of what activities are or are not included. We are hearing that trades that you thought might not be included have received the grant in their areas. So, our advice is, if you fall into one of these categories it is well worth claiming to see if you will receive the grant…(It could be the difference between getting £10k and £25k)

Weekly Update - 9th April 2020

Weekly Update - 9th April 2020

Below I have summarised all the main tax updates we’ve seen this week from HMRC:

• HMRC release details of how to claim 80% of Furloughed pay

• Important changes to Capital Gains Tax

• Coronavirus and the High Income Child Benefit Charge

• Claim working from home allowance during the coronavirus

As always if you need any support or advice please don’t hesitate to contact me.

Wishing you a Happy Easter and have a good bank holiday weekend.

Claiming 80% of Furloughed Pay

We want to make everyone aware of this in case you need to take action.

If you are a Hillmans client and we prepare your payroll for you, you can rest assured we will take care of this for you. You also do not need to read the rest of this post if you have not furloughed any employees.

Coronavirus Job Retention Scheme - Claiming 80% of Furloughed Pay

You will be able to claim funding from the government using a new portal if you have furloughed any of your employees.  Although we have not yet been given full guidance from HMRC, it appears that the funding will need to be claimed through the government gateway service for employers. You will, therefore, need to make sure you have access to your PAYE online account.

In order to make sure that you can claim as soon as possible (it has been suggested that the launch will be on 20 April) please take the following action now.

If you already have a government gateway account, please log in to make sure it works, and your password is correct or is renewed.  Then ensure that PAYE Online for Employers is listed as a service that you can use.  If it is not, please follow the instructions to add it.  You will need your PAYE reference number and accounts office reference number to hand when you do.

If you do not have a government gateway account already, please visit https://www.gov.uk/log-in-register-hmrc-online-services to do so.  

An activation code will need to be posted to you which is why we suggest you action this now.

Please do not hesitate to contact us if you require any assistance with PAYE online services – we would be delighted to help. 

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant
https://www.hillmans.co.uk/covid-19-updates 

Claim working from home allowance during the coronavirus

HMRC have announced that it will increase the maximum flat rate tax deduction available where employees incur additional household costs where they work at home under homeworking arrangements, from £4 per week to £6 per week. This will take effect from April 2020.

If your employer requires you to work at home, you can make a claim, this is particularly relevant in the current environment due to the coronavirus. 

Broadly, no tax liability arises where employers make payments to employees for reasonable additional household expenses, which the employee incurs in carrying out duties of the employment at home under 'homeworking arrangements'.

'Homeworking arrangements' are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home. There is no requirement for any part of the employee's home to be used exclusively for the purposes of the employment - in fact, if any part of the home is used exclusively for work, problems could arise on the future sale of the house as part of the capital gains tax exemption on private residences may be lost.

HMRC have stated that they will accept that homeworking arrangements exist where:

- there are arrangements between the employer and the employee; and
- the employee works at home regularly under those arrangements.

Coronavirus and High Income Child Benefit Charge

The coronavirus (COVID-19) pandemic is causing many people to see a reduction in their income. This can mean there are knock-on effects to your tax position.

If your income falls below £60,000, your liability to the High Income Child Benefit Charge (HICBC) may change or be eliminated completely. Where this is the case, if you do not currently claim child benefit, you may wish to consider claiming it. If you have opted out of receiving payment, you may wish to restart payments.

To restart your Child Benefit, either:

1. Fill in an online form. You need a Government Gateway user ID and password to fill in the online form. If you do not have a user ID, you can create one when you fill in the form.

2. Contact the Child Benefit Office on 0300 200 3100. Have your National Insurance number or Child Benefit number with you when you call.

Please drop us a line if you need any support with this.

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant
https://www.hillmans.co.uk/covid-19-updates

Important Changes to Capital Gains Tax

Changes to Capital Gains Tax, Private Residence and Letting Reliefs  

From today, 6th April 2020, the government is making a number of changes to Capital Gains Tax, Private Residence and Letting Reliefs on properties.

The changes can be summarised as follows:

1. 30 days to tell HMRC and pay any CGT Tax owed on property sales 
2. Transfers between married couples equalised 
3. Final period of ownership reduced from 18 months to nine months 
4. Lettings relief unavailable for periods where owner is not occupying

Broadly, all of the above changes apply to transactions undertaken from 6th April 2020.

Weekly Update – 3rd April 2020

Weekly Update - 3rd April 2020

In this constantly changing and challenging environment, I thought it might be useful to drop you a quick update with all the main HMRC and tax updates we’ve seen over the past week. 

Please don’t hesitate to drop me a line if you have any queries or require support. 


COVID-19 Small Business Grant applications now live for all local councils

Over the past few days we have seen all the local Councils launch their online grant application forms. For more information visit our website here: https://www.hillmans.co.uk/covid-19-business-grants

Below are the links to the online grant forms for all the local Councils:

North Somerset Council:
https://forms.liberata.com/business-rates/covid19-grant-request/north-somerset

Sedgemoor District Council:
https://www.sedgemoor.gov.uk/COVID19grants

Somerset West and Taunton Council:
https://www.somersetwestandtaunton.gov.uk/business-rates/business-grants-covid-19-response/ 

Bristol City Council:
https://www.bristol.gov.uk/business-rates/grant-funds-application-form

Business Rates COVID-19 Grant Request Form

Business Rates COVID-19 Grant Request Form

If you’ve recently applied for the Business Rates Grant via email to North Somerset Council, we’ve noted that an online grant request form is now live on the Council website.

The website link is here:
https://forms.liberata.com/business-rates/covid19-grant-request/north-somerset

To complete the grant process, it appears you need to complete this form using the same details you previously emailed to the Council. You’ll need to upload a copy of a bank statement, paying in slip or cheque to confirm the account details for the grant to be paid into.

Please drop me a line if you need any help or advice.

Stay safe.

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant
www.hillmans.co.uk/covid-19-updates