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Employers can pay a tax-free allowance to employees of up to £6 per week or £26 per month to reimburse them for the additional costs of working from home, such as heating and lighting the workspace and business telephone calls. Most employers do not pay this because of the cost savings employees have by not travelling to their workplace. A deduction against income is not normally available if the allowance is not actually paid.
However, the Government have confirmed that for the period of the Covid-19 pandemic employees can now claim a deduction from earnings for this allowance where it is not actually paid by their employer. Alternatively, employees can claim relief on the actual costs incurred subject to being able to provide suitable evidence to support these additional costs. HMRC has further confirmed that the £6 per week allowance is available in full, even if an employee splits their time between home and office (i.e. the allowance does not need to be pro-rated over the number of days spent each week at home and in the office). Employees working from home can claim the deduction from their earnings on their annual Self-Assessment Tax Return or by using the HMRC Form P87. Alternatively, employees can check their eligibility here and the access their own government gateway account to claim tax relief in-year by adjusting their 2020/21 PAYE code number. We are here to help so please contact us if you wish to discuss any of the above. HMRC has seen an increase in scams reported to them since the start of the Covid-19 pandemic.
Fraudsters are using a wide variety of approaches to try and get their hands on your money or gain access to your personal details. This includes emails, text messages or phone calls to inform you that there is either a refund due or a tax liability to settle as soon as possible. Contact is often made from email addresses or phone numbers that are designed to look very similar to HMRC’s actual contact details. HMRC will never ask for your bank account details, personal information or send notifications by email or text in respect of tax refunds or payment information. HMRC publish examples of bogus schemes that they are made aware of and this can be found here. If you receive any suspicious emails, text messages or phone calls you should report them to HMRC here so the fraudsters can be stopped. Further to our article of 29 September 2020 the Government have confirmed further conditions if you wish to set up a self-serve “Time to Pay” arrangement to settle Self-Assessment income tax liabilities due on 31 January 2021.
The liabilities due on 31 January 2021 can be settled by instalments over a 12 month period and the direct debit can be set up through the Government Gateway account. The additional conditions to be eligible to set up your own self-serve “Time to Pay” arrangement are as follows:
If you do not meet these conditions, you may still be able to set up a “Time to Pay” arrangement, but you will need to call HMRC on 0300 200 3822 and negotiate this with them. It is likely that you will have to provide evidence of the reason you cannot pay and produce cash flow forecasts to get this agreed. If you set up a “Time to Pay” arrangement, you will have to pay interest on the tax paid late with interest being applied to any outstanding balance from 1 February 2021. We are here to help so please contact us if you wish to discuss any of the above. The closing date for claiming the second grant under the SEISS is 19 October 2020. If you haven’t already claimed the grant then you must do so before this date or your entitlement will lapse.
As a reminder this second and grant is worth 70% of your average monthly trading profits capped at £6,570. It will be paid out in a single instalment within six days of making your claim. As with the first grant the payment will be taxable and should be declared on your next tax return. You are eligible for the grant if your business is adversely affected by Coronavirus on or after 14 July. Although not an exhaustive list, ‘adversely affected’ means: You are unable to work because you:
You have had to scale down / temporarily stop trading / incurred additional costs because:
If you have any doubt over whether you are eligible to make a second claim, please contact us to discuss. You must keep evidence to show that your business was adversely affected at the time you made your claim. We are here to help so please contact us if you wish to discuss any of the above. The Government is increasing the cash grants available to businesses in England that are forced to shut due coronavirus restrictions. Grants were originally only offered to businesses shut due to local restrictions but has now been extended to those affected by national restrictions.
The grants will be linked to rateable values and have been increased to up to £3,000 per month payable every two weeks (previously up to £1,500 every three weeks). Payment can be claimed two weeks after being shut. Small businesses with a rateable value of or below £15,000 can now claim £1,300 per month; medium sized businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month; and larger businesses with a rateable value over £51,000 can claim £3,000. We are here to help so please contact us if you wish to discuss any of the above. The Government have today announced that the Job Support Scheme coming in from 1 November 2020 will be expanded to support businesses required to close their doors as a result of coronavirus restrictions.
Businesses whose premises are legally required to close as part of local or national restrictions will receive grants to pay the wages of staff who cannot work. The Government grant will pay two thirds of employees’ salary up to a maximum of £2,100 a month. Employers will not be required to contribute towards wages but will have to cover the national insurance and pension contributions for their employees. Businesses will only be eligible to claim the grant while they are subject to local or national restrictions to not open and employees must be off work for a minimum of seven consecutive days. The expanded scheme which will be UK wide will begin on 1 November in line with the new Job Support Scheme and will be available for six months. Grants will be paid in arrears starting in December and will be claimed through a HMRC claims portal. We are here to help so please contact us if you wish to discuss any of the above. If you are thinking of selling a residential property then you need to know that a sale by a UK resident which gives rise to a gain that is liable to capital gains tax must be reported to HMRC within 30 days of completion. Any tax due on the sale also needs paying within 30 days of completion.
The reporting requirements do not apply if there is no capital gains tax due, for example where the gain is covered by the annual exemption (£12,300 for 2020-21), by brought forward losses or by reliefs such as Private Residence Relief. Capital gains tax calculations can be complicated so please contact us as early as possible in the sale process and we can assist you in calculating the gain and making the necessary disclosure to HMRC. If the sale is not reported within 30 days then HMRC will charge penalties as well as charging interest on any tax that is paid late. If you are thinking of selling a residential property then contact us to discuss the implications. The Government has extended the three coronavirus business interruption loan schemes - the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS).
As the schemes were announced at different times, they previously had different closing dates, with each scheme originally open for applications for a period of 6 months. The extension aligns the end date for applications for the schemes to 30 November 2020. Ashgates has assisted several clients with successful applications so far and can assist you in this process. If you require advice or assistance, please contact us. Extension of Repayment Terms The Government also announced an extension to the repayment terms for BBLS and CBILS.
We expect more details to be released on the extension of repayment terms including how existing terms can be extended and are monitoring further Government announcements and will update accordingly. We are here to help so please contact us if you wish to discuss any of the above. The Government has extended the temporary reduced rate of VAT (5%) to tourist attractions and goods and services supplied by the hospitality sector. This relief came into effect on 15 July 2020 and was due to end on 31 January 2021 but will now be extended to 31 March 2021 across the UK.
We are here to help so please contact us if you wish to discuss any of the above. If you deferred paying your July 2020 payment on account, you will need to pay the deferred amount in addition to any 2019/20 balancing payment and first 2020/21 payment on account by 31 January 2021. This may be a larger payment than you usually pay in January.
If you're unable to pay this liability in full by 31 January 2021 then you can set up a Time to Pay payment plan of up to 12 months online. If your self-assessment tax debts are up to £30,000 then you'll able to access this Time to Pay facility through the gov.uk website and approval will be automatic and immediate. If your self-assessment debts are over £30,000 or you need longer than 12 months to repay your debt in full then you will still be able to apply for a Time to Pay arrangement by calling HMRC. It is likely that you will have to provide evidence of the reason you can not pay and produce cash flow forecasts. We are here to help so please contact us if you wish to discuss any of the above. |
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