Below I have summarised all the main tax related updates we have seen this week.
• Stamp Duty Cut Also Benefits Buy-to-Let Landlords
• CBILS and Bounce Back Loans Update
• CJRS Update
• Protecting Your Business Against Fraud
If you have any queries about this week’s content, please do not hesitate to contact me.
I hope you have a great weekend! 😎
Steven Hillman BSc (Hons) ACA
Tel: 01934 444100
Stamp Duty Cut also Benefits Buy-to-Let Landlords
Although the temporary increase in the Stamp Duty Land Tax (SDLT) threshold to £500,000 was aimed at those buying their main residence, it also benefits landlords buying a second or subsequent property where there is a 3% supplementary charge.
The rate of SDLT on a second home costing up to £500,000 is now 3%. Previously, the rate was 3% up to £125,000, then 5% up to £250,000 and then 8% up to £825,000.
So the SDLT on a second home costing £400,000 is now £12,000 compared to £22,000 if the purchase had completed before 8 July 2020.
Please note that there are different thresholds and rates of Land and Buildings Transaction Tax for properties located in Scotland and Wales.
CBILS and Bounce Back Loans Update
Coronavirus Business Interruption loan (CBILS)
The government has given banks extra time to grant state-backed loans to medium-sized and larger businesses in an extension of Covid-19 support packages until 30 November.
The original deadline for CBILS was put at September 30, while the cut-off for the larger scheme was October 20.
The British Business Bank wrote to lenders last week to say that applications for the coronavirus business interruption loan scheme, or CBILS, aimed at medium-sized businesses with turnover of up to £45 million had to be in by midnight on September 30, but that they had two more months to consider the cases.
That pushes the final approvals date to November 30. The deadline for approving larger CBILS has been set for December 31.
The bank said that it had given “an update clarifying the closing of applications”.
Some lenders interpreted this as an extension of the loans, which may be the first step in a move to keep the schemes open into next year.
Bounce Back Loans
The bounce back loan scheme, is aimed at smaller businesses and is due to end on November 4. No extra time has been given for approvals of bounce back loans as they were designed to be agreed by banks speedily, with minimal affordability checks.
Almost £52 billion has been lent under the schemes, including £35 billion in bounce back, £13.4 billion in CBILS and £3.4 billion in larger CBILS.
Please contact us if you need help in applying for a loan.
The Coronavirus Job Retention Scheme (CJRS) grant claim changes again 1st September. Please talk to us if you would like us to help estimate your claim.
- From 1 September CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
- You will still need to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
- The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in September, you are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
- You will continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from your own funds.
Protecting your business against fraud
In these uncertain times, businesses are combating an increased amount of fraud.
Throughout recent months, there have been widespread reports of an uptick in fraudulent websites, charity scams and fake emails purporting to be from banks, etc. This increase in fraudulent activity is being driven by opportunists who are attempting to take advantage of the confusion and change of circumstances resulting from the current global pandemic.
In order to protect against fraud, businesses should carry out a risk assessment. This should include an assessment of any IT risk that could arise through remote working. Cyber security measures should be put in place including firewalls, anti-malware and anti-virus software. This software should be kept up to date.
All staff should be trained on how to spot fraudulent emails and should be provided with clear guidelines on what to do if they spot a fraudulent email. For example – check email addresses to see if they look suspicious, report the suspicious email to the IT manager, delete the email, etc.
On the financial side of things, regular internal and external audits should be undertaken. Two signatures / authorisations should be required to sign off on payments from the business. Access to the firm’s bank accounts, online banking facilities and payment systems should be restricted to a limited number of people. An authorisation / approval process should be put in place for all payments over a certain amount.
Computers, company mobiles, phones and devices should all be password protected. All staff should be trained on how to create a secure password and a process should be put in place which means that all passwords are updated on a regular basis.
Even if you implement these measures, your business could still be the victim of fraud or cyber crime. Make sure that you have appropriate insurance policies in place so that your business is protected against any losses incurred from crimes such as fraud.