6th August 2021 – Hillmans Weekly Update

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

• Coronavirus Job Retention Scheme – Update
• Self-Employment Income Support Scheme update
• Abolition of Basis Periods and New Tax Year End?
• MTD Coming Soon for Income Tax

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 great weekend. 

Stay safe and well. 

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Self-Employment Income Support Scheme update

The online service for the fifth grant is now available.

If you're eligible, you can claim the fifth grant if you think that your business profit will be impacted by coronavirus (COVID-19) between 1 May 2021 and 30 September 2021. You will need to confirm that you meet other eligibility criteria when you make your claim. You should make your claim on or after the personal claim date HMRC has given you.

See: Check if you can claim a grant through the Self-Employment Income Support Scheme - https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

9th July 2021 – Hillmans Weekly Update

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

• Tax Free Childcare Account Subsidises Summer Camp Costs
• HMRC guidance on re-importing and re-exporting
• Fifth Self-Employed Income Support Grant to be paid in July
• The Furlough Scheme and Employee Travel – “Temporary Workplaces” and COVID-19

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 great weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Self-Employment Income Support Scheme (SEISS) Update

HMRC has updated its guidance with information about the fourth SEISS grant. The online service to claim the fourth grant will be available from late April 2021. If you are eligible based on your tax returns, HMRC will contact you in mid-April to give you a date that you can make your claim from. It will be given to you either by email, letter or within the online service. You must make your claim on or before 1 June 2021.

How HMRC works out trading profits and non-trading income for the SEISS

HMRC will look at your trading profits and non-trading income on your Self-Assessment tax returns to check if you meet the eligibility criteria for the fourth grant. They also use your average trading profits to work out how much grant you will get.

See: Claim a grant through the Self-Employment Income Support Scheme - GOV.UK (www.gov.uk)

Self-Employment Income Support Scheme Fourth Grant (SEISS)

In the recent Budget, the chancellor has set out further support for the self-employed. In addition to the upcoming fourth grant there will also be a fifth SEISS grant covering the 5 months to 30 September.

The chancellor has extended the scheme to include certain traders who were previously excluded. Thus, those who commenced self-employment in 2019/20 will now be included provided they had submitted their 2019/20 tax return by 2 March 2021. This is potentially a further 600,000 traders.

The Budget confirmed that the fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.

Conditions for the fifth grant will be linked to a reduction in business turnover. Self-employed individuals whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £2,500 a month. Those whose turnover has fallen by less than 30% will receive a 30% grant, capped at £950 a month. We are awaiting further details of this fifth grant and we will keep you up to date when we get more information.

Eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received. To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership.

To work out your eligibility HMRC will first look at your 2019 to 2020 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

If you are not eligible based on your 2019 to 2020 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.

You must also have traded in both tax years:

• 2019 to 2020 and submitted your tax return by 2 March 2021
• 2020 to 2021

You must either:

• be currently trading but are impacted by reduced demand due to coronavirus
• have been trading but are temporarily unable to do so due to coronavirus

You must also declare that:

• you intend to continue to trade
• you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus

To allow HMRC to process recently submitted 2019 to 2020 Self-Assessment tax returns, the online Claims service for the fourth grant will be available from late April 2021 until 31 May 2021.

If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.

There will be more guidance about the fourth and fifth grants in due course.

Please contact us if you want to check your eligibility and estimate your claim.

See:  https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension

HMRC Start Checking Self-Employment Grant Claims

HMRC are beginning the process of checking grant claims made under the Self-Employment Income Support Scheme (SEISS).

HMRC calculates the amount of grant payable for SEISS, and taxpayers are only asked to confirm that they meet the eligibility criteria.

So it’s likely that any HMRC checks will focus on cases where an individual did not continue to trade on a self-employed or partnership basis, at least throughout 2019/20. This would include an individual who ceased their self-employment in 2018/19 (6th April 2018 to 5th April 2019) and moved from being a sole-trader to using a limited company structure.

If you have received a letter from HMRC checking your claim, or if you feel you may have made an incorrect claim for SEISS please contact us for advice.  

How trading conditions affect eligibility for the Self-Employment Grant

HMRC has updated its guidance to define what it means by reduced activity, capacity or demand or temporary closure and gives examples of how this could affect eligibility.

Claims for the third Self-Employment Income Support Scheme (SEISS) grant have now closed. The last date for making a claim for the third grant was 29 January 2021. This guidance applies to claims made during the third grant period. Details about the fourth grant will be announced on 3 March 2021.

To be able to claim for the third grant, you must either:

• be currently trading but are impacted by reduced demand due to coronavirus.
• have been trading but are temporarily unable to do so due to coronavirus.
• You must also:
• intend to continue to trade.
• reasonably believe there will be a significant reduction in your trading profits due to reduced demand or your inability to trade.

You must also meet all other eligibility criteria to make a claim.

HMRC expects claimants to make an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.

Please do talk to us about making a claim or any concerns you may have.

See: https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme

Deadline for claiming third SEISS grant - 29th January 2021

A reminder that claims for the third Self Employment Income Support Scheme (SEISS) grant must be submitted to HMRC by midnight on Friday 29th January 2021.

It is not usually possible to make a late claim under the scheme.

When deciding whether you meet the “significant reduction in trading profits” test for the third SEISS grant, you do not need to take into account the first and second SEISS grants, nor any other COVID-19 government support payments received.

If the 1st November 2020 to 31st January 2021 eligibility period for the third grant straddles two basis periods, it is sufficient to be able to show a significant reduction in trading profits for one of the basis periods. You do not need to show a significant reduction in both basis periods to be eligible for the third grant.

When assessing whether there has been a significant reduction in trading profits, the comparison period is not specified in HMRC’s guidance. You can use the previous year or an average of for example the last three years trading profits, but a reduction against an earlier forecast for the relevant basis period would also be valid.

Where you have more than one trade it is sufficient to show that one of the trades has suffered reduced activity, capacity, or demand, or has been temporarily unable to operate since 1st November 2020, and that you reasonably believe that this will cause a significant reduction in the profits compared with what you would otherwise have expected for that trade. You do not have to consider the two trades together.

In some cases, the reduction in activity, capacity, or demand may be only partly due to COVID-19 restrictions. For example, you might decide to take on a part-time job or college course alongside your reduced self-employment. So long as least some of the reduced activity, capacity or demand is due to COVID-19 restrictions you would be eligible for the third grant.

Claims Open for Second Self-Employed Support Grant

From today (17th August), eligible self-employed individuals will be able to claim for their second grant under the Self-Employment Income Support Scheme (SEISS). 

If you are self-employed or member of a partnership, and you were eligible for the first grant and can confirm to HMRC that your business has been adversely affected on or after 14th July 2020, you will be able to make a claim for a second and final grant from today.

Directors of limited companies and the newly self-employed (2019/20+) are unfortunately not eligible for SEISS.

If eligible, the scheme allows you to claim a second and final taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.

You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant. You must make your claim on or before 19th October 2020.

As with the first grant, HMRC are opening the application process in stages over the next week.

You can check if you can claim a grant through the Self-Employment Income Support Scheme, and your individual application date by visiting: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Although we cannot make the application for you, we can talk you through the process and help you with the information you need to enter for the grant application. Please drop us a line and we will be pleased to help.

How Different Circumstances Affect The Self-Employment Income Support Scheme

The Government has updated its page on the Self-employment income support scheme. If you are self-employed or member of a partnership find out how your circumstances can affect your eligibility for the scheme.

See: https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme?utm_source=25c717d0-7b09-4e9c-a386-4f6dde8a1958&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

The scheme is now closed for claims for the first grant.

The scheme has been extended. If you were eligible for the first grant and can confirm to HMRC that your business has been adversely affected on or after 14 July 2020, you will be able to make a claim for a second and final grant from 17 August 2020.

The scheme allows you to claim a second and final taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.

As with the first grant HMRC will contact you if you’re eligible.

HMRC will work out your eligibility for the second grant in the same way as the first grant.

You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant.

See: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme?utm_source=a07822f3-cbb8-45c2-b106-35f2236d46c8&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Treasury Committee recommends additional help for businesses

With Directors of Limited Companies and the newly self-employed being excluded from the Self-Employment Income Support Scheme (SEISS), we’re hoping that the Chancellor will listen to Mel Stride the Chair of the Treasury Committee who is urging the Government to provide additional help for businesses. 

It is estimated over one million self-employed and company directors have been excluded from the scheme.

We are keeping our figures crossed this will lead to some much-needed assistance to those businesses who have received no Government help so far. 

We will keep you updated of any developments!

Chancellor extends self-employed income support scheme

The Chancellor this evening annouced some good news for the self-employed. It has been confirmed that the self-employment income scheme (SEISS) will be extended, with applications opening in August for the second and final grant payment. 

The second grant will work the same as for the first grant, however the max grant will be capped at £6,570 or 70% of average profits (previously 80%).

Unfortunately the support grant still excludes company directors who earn dividends from their own limited company.

The SEISS scheme will then end.

Weekly Update 15th May 2020

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

  

• Applications for Self-Employment Income Support Scheme Now Open

• HMRC SEISS Telephone Number

• Chancellor extends furlough scheme until October

• Starling Bank now accepting Bounce Back Loan Scheme applications

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

 

I hope you have a great weekend!

HMRC SEISS Telephone Number

HMRC SEISS Telephone Number:

If you’re struggling to make a claim for the Self-Employed Income Support Scheme Grant (SEISS) via the Gov.uk website, you should be able to make a claim with HMRC over the phone using the telephone number 0800 024 1222. 

Just be aware the lines are ‘very’ busy at present!

Applications for Self-Employment Income Support Scheme Now Open

From 8am this morning (13th May 2020), HMRC is accepting applications from self-employed individuals to apply for a Self-Employment Income Support Scheme (SEISS) grant worth 80% of their average monthly trading profits.

Individuals are eligible if their business has been adversely affected by coronavirus, they traded in the tax year 2019 to 2020, intend to continue trading, and they:

- are self-employed individuals (sole-traders) or members of a partnership

- earn at least half of their income through self-employment

- have trading profits of no more than £50,000 per year

- traded in the tax year 2018 to 2019 and submitted their Self Assessment tax return on or before 23 April 2020 for that year

Directors of limited companies are unfortunately not eligible for SEISS.

HMRC will calculate the amount to be paid to each eligible claimant based on an average of the tax returns for 2016/17, 2017/18 and 2018/19.

We have produced a step by step guide on how to claim for the Self-Employment Income Support Scheme (SEISS) Grant as HMRC are not allowing accountants and tax advisors to apply for their clients.

You can read the guide here: https://www.hillmans.co.uk/guide-to-claim-for-seiss-grant

Although we cannot make the application for you, we can talk you through setting up your online Tax Account and help you with the information you need to enter for the grant application. Please drop us a line and we will be pleased to help.

Weekly Update 7th May 2020

Weekly Update 7th May 2020

 

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

• New Bounce Back Loans Launch

• Important Changes to Self-Employment Income Support Scheme Grants (SEISS)

• Read our Step by Step Guide on How to Claim for the Self-Employment Income Support Scheme (SEISS) Grant

• Small firms that missed £10k grant could benefit from £617m new grants

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

 

I hope you have a great bank holiday weekend!

Guide on how to claim for the Self-Employment Income Support Scheme Grant

We have produced a step by step guide on how to claim for the Self-Employment Income Support Scheme (SEISS) Grant as HMRC are not allowing accountants and tax advisors to apply for their clients.

These steps are necessary for you to make a claim.

You can download the guide from our website at: https://www.hillmans.co.uk/guide-to-claim-for-seiss-grant

Although we cannot make the application for you, we can talk you through setting up your online Tax Account and help you with the information you need to enter for the grant application. Please drop me a line and I will be pleased to help.

Best wishes,

Steve

Steven Hillman ACA

Chartered Accountant

Tel: 01934 444100

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

Changes to Self Employment Income Support Scheme Grants

CHANGES TO SELF EMPLOYMENT INCOME SUPPORT SCHEME GRANTS

HMRC yesterday announced several important changes to the Self-Employment Income Support Scheme (SEISS) Grant:

1. The first is that you will need to apply for the grant - previously the government announcements indicated that the process would be more automated.

2. Secondly, HMRC have confirmed agents (accountants) cannot make the application on your behalf via their agent access with HMRC.

This means that you need to make sure you register for an online Tax Account if you do not already have one with HMRC. 

You can register for an online Tax Account here at the HMRC website: https://www.gov.uk/personal-tax-account/sign-in/create-account. 

You will be provided with a gateway account ID and password. HMRC will process the grant claim via your Tax Account, so it’s important you get this set up ASAP.

The online portal opens on the 13th May 2020. Once you have opened your Tax Account, you can check your eligibility for the grant and find out when you can start your application.

Although we cannot make the application for you, we can talk you through setting up your online Tax Account and help you with the information you need to enter for the grant application. Please drop me a line and I will be pleased to help.

Best wishes,

Steve

Steven Hillman ACA

Chartered Accountant

Tel: 01934 444100

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

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

New Self-Employment Income Support Scheme

The Chancellor has just announced a new Self-Employment Income Support Scheme to help the self-employed through the coronavirus pandemic.

Whilst we don’t have the full details of the scheme yet, the key points to note are….

• A grant will be payable to the self-employed to cover 80% of monthly profits
• This will be calculated using the average profits for the past 3 years
• Capped at £2,500 per month
• The system is expected to be live in June – please be aware of this for your cashflow
• Self-employed with trading profits above £50,000 appear to be excluded
• Newly self-employed persons since April 2019 appear to be excluded
• Self-employed can continue to work whilst in receipt of the grant
• HMRC will contact the self-employed directly in order to make a claim
• It appears that this still ignores Directors of limited companies who are paid a basic salary with the balance as dividends – but we will await the guidance for confirmation

I will be reading the full details when published and be updating our clients with a full overview ASAP.

In the interim if you have any queries or concerns please don't hesitate to drop me a line.

Best wishes,

Steve

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