Tuesday 22 December 2020

Merry Christmas


Merry Christmas and a Happy Prosperous New Year from all the team at Hillmans Chartered Accountants. 

We wish you and those close to you the happiest and safest of Christmases.

Our Christmas Opening Hours

Our office will be closed for the Christmas and New Year period from 5pm on Tuesday 22nd December, re-opening at 9am on Monday 4th January. 




Monday 21 December 2020

Business News Update


This will be our last business newsletter before Christmas and the New Year break so let us wish you a happy Christmas and a more stable New Year.

We think most clients will be glad to see the back of 2020. Let us have hope that later in 2021 we return to a more normal way of life.  

How do we make sense of what’s happened this year?

This year will be remembered for the destruction Coronavirus has caused to our lives, especially the 79,000 who died from the virus. We have had to change the way we work and communicate. One of the greatest costs has been the restrictions on civil liberties in peacetime. We now wear face masks and socially distance. Schools have been closed and pupils now learn part of the time remotely and in some areas of the country, attendance has been below 80%. There are nearly 1.5 million patients waiting more than six months from appointment to referral for hospital treatment. The criminal court backlog has grown significantly and mental health amongst all elements in our population has worsened.

Economically, the country has been devastated and sectors such as hospitality, travel, the Arts and high street retail hit hardest. The number of people claiming Universal Credit has doubled to 5.7 million people.  For many business owners, 2020 has been the worst of the worst years, and the UK economy is expected to shrink by 11.3% this year and not return to its pre-Covid size until the end of 2022. Government borrowing will rise to its highest outside of wartime to deal with the economic impact.

A “No Deal” Brexit will have a further negative impact on the economy in early 2021 and any recovery will take longer as a result. The Confederation of British Industry (CBI) predict the UK won’t get back to its pre-pandemic level until the end of 2022 and if there is “No Deal” this could take up to 2024. 

Friday 18 December 2020

18th December 2020 – Hillmans Weekly Update


18th December 2020 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

  • Furlough scheme extended for another month
  • New Penalties for Over claimed Grants
  • Christmas Gifts to Charity
  • Business evictions ban extended until March  
  • What Hope For The Recovery?

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.


I hope you have a good weekend.


Stay safe and well. 


Kind regards,


Steve


Steven Hillman BSc (Hons) ACA

Chartered Accountant

Tel: 01934 444100

https://www.hillmans.co.uk/covid-19-updates 

Thursday 17 December 2020

Furlough scheme extended for another month

Chancellor Rishi Sunak has today extended the Governments furlough scheme for another month until the end of April 2021.

The Government will continue to pay up to 80% of an employees wage who has been furloughed.

Bounce Back Loan Scheme

The Chancellor also confirmed the Government guaranteed COVID-19 business loan schemes would be extended until the end of March 2021.

Budget

Finally the chancellor has also confirmed the next budget would take place on 3rd March 2021. 

New Penalties for Overclaimed Grants

HMRC have announced that they will be imposing penalties of up to 100% of the amounts overclaimed on CJRS, SEISS and Eat Out to Help Out Grants. 

The penalties depend on whether or not the overclaim is the result of a deliberate error and whether or not the disclosure was prompted by HMRC. The penalty may be reduced where the taxpayer assists HMRC in correcting the error.

Many overclaims may be the result of careless errors or a misinterpretation of the rules which have changed many times in the last 9 months so we hope that HMRC will apply the rules with a light touch and focus on those that have abused these schemes.

We understand that HMRC are writing to 4,000 catering establishments that they suspect may have overclaimed under the “Eat out to help out” scheme that ran in August.  Traders are being asked to check their claims and respond within 60 days or face an HMRC compliance check.


Wednesday 16 December 2020

Christmas Gifts to Charity

Christmas is a time for giving. This often extends beyond family and friends to charity donations. Where possible taxpayers should “Gift Aid” any payments to charity to provide additional benefit to the charity. Higher rate taxpayers obtain additional tax relief on the grossed up amount donated. 

For example, where an individual makes a £20 cash donation to charity the charity is able to reclaim a further £5 from HMRC making a gross gift of £25. Where the individual is a 40% higher rate taxpayer he or she is able to claim a further £5 tax relief under self-assessment, reducing the net cost of their donation to £15.

Note that the donor is required to make a declaration that they are a UK taxpayer and those that have not suffered sufficient UK tax to support the Gift Aid amount will taxed on the shortfall.

Remember that Gift Aid does not just apply to gifts of cash. Many charity shops will now sell donated items on your behalf and are able to treat the sale proceeds as Gift Aided donations. It is also possible to gift quoted securities and land and buildings to charity and claim Gift Aid on the market value of those assets.


Tuesday 15 December 2020

Business evictions ban extended until March  

Business owners affected by the pandemic will be protected from eviction until the end of March 2021.

The Government states: “The majority of commercial landlords have shown flexibility, understanding and commitment to protect businesses during an exceptionally challenging time.

This final extension to protections from the threat of eviction will give landlords and tenants 3 months to come to an agreement on unpaid rent. The government is clear that where businesses can pay any or all of their rent, they should do so.”

Further guidance to support negotiations between landlords and tenants will also be published shortly.

See: https://www.gov.uk/government/news/business-evictions-ban-extended-until-march

Monday 14 December 2020

What Hope For The Recovery?


The latest economic indicators for the UK economy from the Office for National Statistics (ONS) show 77% of UK businesses are currently trading, with 14% of trading business’ workforce on furlough leave. Their latest figures show that monthly gross domestic product (GDP) rose by 0.4% during October 2020 but was still 7.9% below February 2020 levels.

Output is expected to shrink again in November after England's second shutdown forced many businesses to close.

October 2020 saw the sixth consecutive month of growth, but the rate of recovery has slowed each month since the largest rise of 9.1% in June 2020. Across services, the monthly growth was driven by health, wholesale, retail and motor trades, and education, while accommodation and food and beverage service activities declined. Within manufacturing there was widespread growth, led by a rise of 6.8% in motor vehicle production. Monthly construction output growth slowed to 1.0% in October 2020, the sixth consecutive month of growth but the lowest rise in that time, with the level of construction output in October 2020 still 6.4% below the February 2020 level.

The figures are gradually improving although it is going to be a long haul. It is clear the hospitality, travel, arts and retail sectors are hardest hit and whilst there are regional grants to support them we believe these sectors will take the longer to recover. 

A “No Deal” Brexit will have a negative impact on the economy in early 2021 and any recovery will take longer as a result. The Confederation of British Industry (CBI) predict the UK won’t get back to its pre-pandemic level until the end of 2022 and if there is “No Deal” this could take up to 2024.     

Despite the pandemic and the possibility of “No Deal”, we still continue to be impressed with the resilience of our clients and how they have energetically repurposed or pivoted their businesses into new areas, products and services. 

Please do talk to us about planning for 2021 and beyond, we have considerable experience in helping businesses project their figures forward and perform “What if” analysis to look at a range of scenarios. 


Friday 11 December 2020

11th December 2020 – Hillmans Weekly Update


11th December 2020 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

  • Local Restriction Support Grant (For Open Businesses in England)
  • Claim a Grant Through The Self Employment Income Support Scheme
  • VAT Reduced Rate for Hospitality Extension
  • Government Announces £1,000 Christmas Grant for 'Wet-Led Pubs' - England

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.


I hope you have a good weekend.


Stay safe and well. 


Kind regards,


Steve


Steven Hillman BSc (Hons) ACA

Chartered Accountant

Tel: 01934 444100

https://www.hillmans.co.uk/covid-19-updates 

Thursday 10 December 2020

Local Restriction Support Grant (For Open Businesses in England)

The Local Restrictions Support Grant (LRSG (Open) supports businesses that have been severely impacted due to temporary local restrictions.

Businesses that have not had to close, but which have been severely impacted due to local tier 2 or tier 3 restrictions, may be eligible for LRSG (Open).

Eligible businesses may be entitled to a cash grant from their local council for each 14-day period under local restrictions.

Local councils have the discretion to provide grant funding for businesses under this scheme. They will use their discretion in identifying the right businesses to receive this funding, based on their application process.

See:
https://www.gov.uk/guidance/check-if-youre-eligible-for-the-coronavirus-local-restrictions-support-grant-for-open-businesses

Wednesday 9 December 2020

Claim a Grant Through The Self Employment Income Support Scheme

The third grant for SEISS is now open. To make a claim for the grant, your business must have been impacted by coronavirus on or after 1st November 2020. You can make a claim for the third grant if you are eligible, even if you did not make a claim for the first or second.   

What you will need to make your claim

You will need your:

Self-Assessment Unique Taxpayer Reference (UTR)

National Insurance number

Government Gateway user ID and password

UK bank details including account number, sort code, name on the account and address linked to the account

You may also need to answer questions about your passport, driving licence or information held on your credit file.        

You must make your claim between 30th November 2020 and 29th January 2021 using the government website below.

See: https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme

Tuesday 8 December 2020

VAT Reduced Rate for Hospitality Extension

Government guidance has been updated to reflect the extension of the VAT reduced rate for tourism and hospitality from 12th January to 31st March 2021.

The government made an announcement on 8th July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT to certain supplies relating to:

hospitality
hotel and holiday accommodation
admissions to certain attractions

The temporary reduced rate will apply to supplies that are made between 15th July 2020 and 31st March 2021.

See: https://www.gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accommodation-and-attractions

Monday 7 December 2020

Government Announces £1,000 Christmas Grant for 'Wet-Led Pubs' - England

Prime Minister, Boris Johnson, has announced an additional £1,000 Christmas grant for ‘wet-led pubs’ in tiers 2 and 3 in England, who will miss out on turnover during the busy Christmas period.

Pubs that predominantly serve alcohol rather than provide food, have been asked to make sacrifices over the festive season and will be eligible for a one-off £1,000 to help make ends meet.

The payment will be a one-off for December and will be paid on top of the existing £3,000 monthly cash grants for businesses. This will cover those in tiers 2 and 3 forced to reduce their operations as a result of the latest regional measures put in place to contain transmission of the virus.

See: https://www.gov.uk/government/news/prime-minister-announces-1000-christmas-grant-for-wet-led-pubs

Friday 4 December 2020

4th December 2020 – Hillmans Weekly Update


4th December 2020 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

  • New ‘Significantly Reduced Profits’ Test for Third SEISS Grant
  • Pay VAT Deferred Due to COVID-19
  • Christmas Gifts of up to £50 to Employees
  • How About a Virtual Christmas Party?

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.


I hope you have a good weekend.


Stay safe and well. 


Kind regards,


Steve


Steven Hillman BSc (Hons) ACA

Chartered Accountant

Tel: 01934 444100

https://www.hillmans.co.uk/covid-19-updates 

Thursday 3 December 2020

How About a Virtual Christmas Party?

HMRC are not the Grinch after all. They have recently announced that employers may arrange a “virtual” Christmas party this year and there will be no taxable benefit for employees provided that all staff are invited and the cost per head does not exceed the normal £150 limit.

Maybe keep it to a modest affair and have a big bash when the Coronavirus pandemic is over as we are allowed more than one event a year within the £150 limit.


Wednesday 2 December 2020

Christmas Gifts of up to £50 to Employees

Certain gifts to staff at Christmas are tax free if structured correctly. Employers are allowed to provide their directors and employees with certain “trivial” benefits in kind tax free.

This exemption applies to small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers.

There are of course a number of conditions that need to be satisfied to qualify for the exemption.

Conditions for the exemption to apply

the cost of providing the benefit does not exceed £50
the benefit is not cash or a cash voucher
the employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme
the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services) 


Tuesday 1 December 2020

Pay VAT Deferred Due to COVID-19

HMRC has issued guidance on paying deferred VAT. 

If you deferred VAT between 20 March and 30 June 2020 and still have payments to make, you can:

pay the deferred VAT in full on or before 31 March 2021
opt into the VAT deferral new payment scheme when it launches in 2021
contact HMRC if you need more help to pay

If you want to opt into the new payment scheme:

You cannot opt in yet. The online opt in process will be available in early 2021. You must opt in yourself. Your agent 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
be able to pay the deferred VAT by Direct Debit

If you opt into the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.

Get ready to opt into 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. Corrections received after 31 December 2020 may not show in your deferred VAT balance
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 will need, from 2 to 11 months

Please talk to us about helping you with your options.