Weekly update - 25 July 2020
26/07/2020

Hello

 

Not too much happening on the Covid 19 front this week and more evidence that the Government is getting back to dealing with other matters.

 

Making Tax Digital (MTD)

 

Just when you thought it had gone away, if you were ever aware of it in the first place (!), the Government has announced that MTD is back!

 

They have announced that it will become mandatory for income tax from 6 April 2023, all VAT registered businesses from 6 April 2022 and will be consulting on how to bring it in for corporation tax.

 

See below for more details.

 

July tax payments

 

Reminders from HMRC for the self assessment tax payments for the end of July have now been sent out by HMRC.  As part of the CV19 package of measures from the Government these payments can be deferred until the end of January 2021. The notices can be confusing as they say payment is due by 31 January 2021 but there is nothing stopping you paying your tax now.

 

Our opinion is that if you have the funds to make the payments without causing difficulty for yourself then it is probably best to pay them now rather than wait. Having to find at least a year’s worth of tax in January 2021 will be difficult if you have not put funds aside.

 

Alternatively or if you cannot pay the full amount now then you could make regular monthly payments to HRMC towards the liability or if you wish we can set up a client’s bank account for you to save the money into pending payment in January.

 

Tax Credit claims

 

Final call to get your tax credit claims in on time.

 

Seed details below.

 

 

Stewart & Partners will continue to be working from home for the foreseeable future although we do very occasionally visit the office if needed. All post is being forwarded onto us from the office.

 

Don’t forget to access our dedicated Covid 19 hub for all new announcements and far more detailed information.

 

Making Tax Digital

 

On 21 July the Government published a 5 to 10-year vision for tax administration. This included a future roadmap for Making Tax Digital.

 

The roadmap is supposed to provide certainty for businesses so that they can plan ahead. It allows for lead-times and piloting.

 

Making Tax Digital will be:

 

• extended to VAT-registered businesses with turnover below the £85,000 VAT threshold from April 2022 – 30% of these businesses have already joined voluntarily; and

 

• introduced for Income Tax Self-Assessment for businesses and landlords with income over £10,000 from April 2023.

 

In addition, HMRC will consult in the Autumn on the detail of extending Making Tax Digital to incorporated businesses with Corporate Tax obligations.

 

You can read the Vision, ‘Building a trusted, modern tax administration system’, on Gov.uk:

https://www.gov.uk/government/publications/tax-administration-strategy

 

This announcement gives a clear indication that going forward all businesses will have to advise HMRC electronically of their income and profits, most probably on a quarterly basis. Self assessment will include landlords who rent out property. I expect the corporation tax review to deal with informing HMRC of dividend payments, most probably using NI numbers to link to individual tax accounts. This will in many cases stop the confirmation of voting dividends after the year end. I expect in future for dividends to have to be voted in the tax year for inclusion in that year’s income.

 

Whilst initially HMRC will look at some form of bridging software to notify them of the figures eventually it will be necessary to have an electronic bookkeeping system, for even the smallest of businesses, which will link to the HMRC portal. The software will have to be kept up to date so that meaningful information can be transmitted to HMRC.

 

Over the past five years Stewart & Partners have been promoting online bookkeeping and for those clients who are above the VAT threshold we have managed to steer them through the onboarding to online bookkeeping in order to comply with their MTD obligations and many of them now are enthusiastic users of the software.

 

With the clear indication that all businesses will need to move to this type of bookkeeping in the future we are happy to discuss with you a change to the way you keep your books and records.

 

We recommend you use Xero software and we have a dedicated page to this on our web site.

 

There will be a cost for us to help you move across to the software but we do offer a 10% discount on the monthly subscriptions for the starter, standard and premium subscriptions.

 

I strongly urge you to have a discussion with me about moving across sooner rather than later. If you leave it to the last minute then we would have to charge more and the timescale for implementation and learning how to use the software will be short.

 

Working Safely during CV19

 

From 4 July all business premises apart from certain specified venues can reopen.

 

The Government have issued 10 guides to cover a range of different types of work. Many businesses operate more than one type of workplace, such as an office, factory and fleet of vehicles. You may need to use more than one of these guides as you think through what you need to do to keep people safe. Further guidance will be published as more businesses are able to reopen.

 

 

Tax credit renewals

 

There are still around 3.8 million people claiming working or child tax credits. As tax credits are assessed on an annual basis the claim must be renewed each year. 31 July is the latest date to confirm tax credit claims for the current year.

 

HMRC is automatically renewing most claims, other than for around 150,000 claimants who it regards as “high risk”. These claimants must reply to HMRC with further information before their claim is renewed.

 

Those on automatic renewal should receive a renewal pack (form TC603R) including all the information that has been used to calculate the new award. The claimant should only have to contact HMRC if the information in that pack needs correcting.

 

However, claims by self-employed individuals for 2020/21 should be based on their 2019/20 income. The self-employed have always been able to provide a provisional figure of their previous year’s profits by 31 July, and the final figure by the following 31 January. The tax credits renewal pack does not make this clear in all cases.

 

If you are self-employed and claiming tax credits contact the Tax Credits Office and provide a provisional figure of profits for 2019/20. If the Tax Credit Office uses profit figures derived from 2018/19 and marks those figures as “final”, it may be impossible to change those income figures at a later date.

 

Many self-employed people were encouraged to claim universal credit so that they received some income while waiting for their SEISS grant. In such cases any existing tax credit will cease on the day before the universal credit claim commenced, and it won’t be possible to go back to re-start a tax credit claim.

 

Child Benefit and the High Income Child Benefit Charge (HICBC)

 

The HICBC starts to clawback child benefit where the recipient’s income or that of their partner exceeds £50,000. All child benefit received is clawed back using the HIBC where the income of either party is more than £60,000.

 

As a result of the Coronavirus pandemic, many people have suffered a reduction in income. The furlough scheme caps the grant at £2,500 a month, and where income is not topped up by the employer, individuals who were previously within the scope of the HICBC may not be for 2020/21.

 

Likewise, self-employed taxpayers who were unable to work during the pandemic and do not qualify for a grant under the Self-Employment Income Support Scheme because their average profits exceed £50,000 may also outside the HICBC for 2020/21.

 

If you have stopped making a claim for Child Benefit previously it may be prudent to reapply for Child Benefit for the current tax year. You can apply and still ask for nil benefit to be paid if you are not sure if your income will exceed the threshold.

 

Child benefit claims can only be backdated up to 3 months so make a claim now if you think you could benefit from this.

 

More advice from the Money Advice Service here

 

 

Self Employed Income Support Scheme (SEISS)

 

Don’t forget to make the second claim for the Self Employed Income Support Scheme. The period for making claims opens on 17 August and the final date for making the claim is 19 October 2020.

 

To see if you are eligible to claim and for details of how the scheme works check out this helpsheet.

 

The claims must be made by you, we cannot do this on your behalf.

 

If you need support from us to hand hold you through the application process please contact me. There will be a fee for sitting with you online to go through the process.

 

 

CJRS

 

From 1 July as the rates for furlough change month by month any missed days should not be carried forward to the next month as the amounts claimable will be different.

 

An amendment tool for furlough claims is being made available as part of the monthly furlough claim process.

 

From 1 July the minimum period of furlough will be 1 week instead of 3 weeks.

 

 

CJRS – Paperwork

 

As previously advised all paperwork relating to furlough must be kept until at least 30 June 2025 in case HMRC wish to review it. This is really important and more detail will be given in our e-mail for clients with payroll as mentioned above.

 

 

Bounce Back loans

 

Bounce Back (BB) loans have now been available for a while and the number of financial institutions offering them is increasing slowly.

 

A list of banks currently offering the BB loans is available on the British Business Bank web site.

 

Applications for BB loans can be made up to 4 November 2020.

 

CBILS

 

The Coronavirus Business Interruption Loan Scheme (CBILS) is still running for loans above £50,000. A Business can only have either a BB loan or a CBILS loan but not both. Therefore if you require a loan in excess of £50,000 CBILS is the way to go.

 

If you already have a BB loan and need more funds you can apply for a CBILS loan as long as then new loan is used, in part, to repay the BB loan.

 

Again, planning for the repayment for the loan is essential and we can help with preparing cashflows and budgets if needed.

 

Applications for CBILS can be made up to 23 September 2020 - please note this as it has changed recently.

 

 

Accounting for grants and loans

 

If you need help with your bookkeeping for the various loans and grants please contact us for advice on how to record these.

 

Zoom Backgrounds

 

If you have been on a zoom call with me you will know that I like to change the backgrounds when on a call as I think it makes things more interesting for the other parties.

 

A number of people have asked how I change the background. I have recorded a quick video showing how do change the back grounds which I hope will be of interest to you.

 

 

Links

 

Here are a few links which may be of help:

 

Coronavirus support for business from outside government - List of public bodies, organisations and charities that have produced additional resources that may be useful to employers and employees.  

 

 

Government 10 guides to working safely during CV19

 

Stewart & Partners UK Covid 19 business guidance and resources - http://clientresources.co.uk/ - a 3rd party web site with good advice and resources that Stewart & Partners link to.

 

Hertfordshire Growth Hub - www.hertsgrowthhub.com – support for existing businesses.

 

Enterprise Nation - www.enterprisenation.com – Small business support, free to join.

 

HMRC Skills toolkit - theskillstoolkit.campaign.gov.uk/ - free online courses to learn new digital and numeracy skills.

 

CIPD – CV19 Returning to the workplace - https://www.cipd.co.uk/knowledge/fundamentals/emp-law/employees/workplace-guide-returning-after-coronavirus - How to plan a return to work.

 

CJRS: Step by step guide for employers

 

How to set up a direct debit for VAT returns - https://www.gov.uk/government/publications/vat-instruction-to-your-bank-or-building-society-to-pay-by-direct-debit-vatc9

 

Zoom tips for home working https://blog.zoom.us/working-from-home-tips-to-meet-like-a-pro/?utm_source=website&utm_medium=postattendee&utm_campaign=WFHQ1FY21&zcid=3710

 

How to change your zoom background -  https://www.loom.com/share/269c91301db747c18eed82cdc2f615bd

 

Online Client meeting

 

We continue to hold weekly online meetings which all clients are entitled to attend. The meetings are an open discussion about what has happened, maybe a preview of this weekly e-mail and I am open to any questions.

 

There is no obligation to attend but you may hear something you would otherwise have missed. You may also receive support or ideas from other clients.

 

The next meeting will be next Wednesday morning. Details as follows:

 

Date and Time:  Wednesday 29 July 2020, 11.00am

 

Meeting URL: https://us02web.zoom.us/j/83879726978  

 

Meeting ID: 838 7972 6978

 

Invites will also be sent out to separately.

 

 

Contact us

 

We are now on WhatsApp and happy to talk to you via this method. We have created groups for Covid19 support where I am posting updates in the group that will eventually appear in this newsletter. If you wish to join the group or for any other communication please contact us. WhatsApp connection through 07738242299 or Stewart & Partners

 

The best way to contact us is by e-mail but I am accepting calls on 07738 242299. The office phone is not being monitored on a regular basis so any messages left will not be dealt with in a timely manner.

 

Share this e-mail

 

Although this e-mail is sent mainly to clients if you know of anyone who would benefit from receiving it then please pass it onto them with my compliments.

 

Feedback

 

Feedback from clients is important. It would help me to know that this weekly e-mail is being appreciated.

 

Also if you have any queries join us for the meeting on Wednesday.

 

Referrals

 

We are still looking for referrals from you. If you know anyone who is in need of support or help then please ask them to get in touch.

 

I hope you are all keeping well and following the government guidelines. I foresee the lock down lasting at least another 3 -4 weeks so you need to be prepared for this.

 

Don’t forget we put out at least one and on some days two articles on social media. Follow us on:

 

Twitter: @StewartPtnrs

Facebook: https://www.facebook.com/Stewart-Partners-780549322295593/ 

LinkedIn: linkedin.com/in/simonalever and also   www.linkedin.com/company/stewart-partners-chartered-accountants

 

 

This is a copy of an e-mail is written by Stewart & Partners for our clients and direct contacts but we are happy for you to pass it onto any of your contacts. The information is based upon our understanding of the current situation but we can accept no responsibility for any action or inaction in respect of the content.

 


CONTACT US

232 Kinetic Business Centre, Theobald Street
Elstree, Herts, WD6 4PJ
Contact Us: mail@stewartpartners.co.uk | Call: 07738 242299

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