HMRC Waives Late Filing & Payment Penalty for 31st January Deadline

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HMRC has taken the decision to not issue a late filing penalty for anyone who does not submit their self-assessment tax return before midnight on 31st January 2022.  It is important to point out that the deadline for filing your 2020-21 tax return remains 31/01/22 but the waiving of the penalty allows anyone who is unable to file their self-assessment tax return by the 31/01/22 deadline avoid a £100 late filing penalty as long as they submit their tax return  sometime before midnight 28th February 2022.

Furthermore, anyone that is unable to pay their self-assessment tax liability before 31st January 2022 will not receive a late payment penalty if they pay their tax in full, or call HMRC to arrange a payment plan before 1st April 2022.  It is important to note that interest will be added on taxes owed from 1st February 2022.

For a second year in a row, due to COVID, an extra Read more

SEISS: The 5th & Final Round

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5th SEISS Grant - how to claim

HMRC has already started contacting possible eligible sole traders and partnerships for the 5th and final Self Employed Income Support Scheme grant announced by the Government last year.

HMRC’s online access for applications is due to open later this month (July) and the grant will cover the period 1st May 2021 through to 30th September 2021.  You can claim the 5th grant if you believe that your business profit will be impacted by coronavirus between these dates.

This round of grants requires turnover calculations to be done by the applicant, following four stages to determine the two turnover figures required in the application and hence, how much they will be eligible for.

  1. You will first need to work out your turnover (money received) for a 12-month period starting from any date between 01/04/20 to 06/04/20. Your figure must include the turnover from all your businesses.  You can ask us at Taxfile for your figure if we have submitted your 20/21 tax return.  If you haven’t yet done your 2020/21 tax return, it might be an opportunity to contact your tax agent at Taxfile and bring in your financial data for the period, so we can give you an accurate figure, as HMRC will be able to check the figures once you do submit your tax return.
  2. The second stage is to adjust the 12-month turnover figure by removing the monies received from any SEISS grants or COVID relief grants from the council/government.  Although these grants are viewed as subject to income tax and national insurance, they will not be considered as part of your 12-month turnover figure for the 5th SEISS grant.
  3. The third stage requires you to calculate a previous year’s turnover to use as a reference figure. This is the 2nd figure you will need for the application.  HMRC states that in most cases you must use the 2019/20 tax return as your reference year.  If for any reason 2019/20 was not a normal year, you can use the turnover reported in your 2018/19 tax return.  For ‘not a normal year’, HMRC has stipulated the following examples; being on carers or sick leave for a prolonged period, losing a large contract, reservist duties, or being eligible for the 5th SEISS grant but not having submitted a 21019/20 tax return.  The turnover for your reference figure can be found on the tax return summary we would have issued you.  If you need this figure, please do not hesitate to contact your tax agent on 020 8761 8000.
  4. The fourth stage is to compare the two turnover figures. Only when the figure from stage 3 (the reference year) is greater than that obtained for the 20/21 figure will you be eligible for the 5th SEISS grant.  Furthermore, if the 2020/21 turnover figure has reduced by 30% or more when compared to the reference turnover figure, the grant will be 80% of the 3-month average profits, with the maximum grant payment capped at £7,500.  If the 2020/21 turnover is less than 30%, the grant will be 30% of the 3-month average profits, capped at £2,850.

Recovery Loan Scheme

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Recovery Loan Scheme

The Bounce Back Loan Scheme (BBLS) application entries terminated on 31/03/2021 and now the government has introduced the Recovery Loan Scheme to finance UK businesses as they grow and recover from the disruption of the COVID-19 pandemic.

The government guarantees 80% of the finance to the lenders, meaning the necessity of credit checks on the business are negated, but as the borrower, you are still 100% liable for the debt.

Loans are available through a network of accredited lenders, listed on the British Business Bank’s website.

You can apply for a loan if your business:

  • is trading in the UK
  • would be viable were it not for the pandemic
  • has been adversely impacted by the pandemic
  • is not in collective insolvency proceedings

Loans or overdrafts between £25,001 – £10M can be applied for (for up to 3-year period) and the APR will be dependent on the duration, but the typical APR on a £25K loan over 36-months is 7.7% bringing the value of the loan to £28,435.

Or you can apply for asset financing between £1,000 and £10M per business over a maximum of 6 years.

You can apply for the Recovery Loan Scheme directly from your bank and the scheme is open till 31 December 2021.

More information can be found HERE.

Furlough Scheme Extended until End of September

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Furlough Scheme Extended until End of September

In The Chancellor’s 2021 budget speech it was announced that the furlough scheme would be extended until the end of September 2021, to protect the jobs and livelihoods of the UK population during the pandemic.

The Government will pay employees 80% of the hours not worked through to the end of June 2021.  As the country opens up it will then offer 70% with the employer to contribute the other 10%, then in August through to the end of September they will ask the employer to pay 20% while the Government covers the remaining 60%, so the employee continues to receive the 80% of their income for the hours not worked.

If you or your business need help setting up a payroll and help with the furlough scheme, then please do not hesitate to contact us on 020 8761 8000.

Taxfile Partners with Local Government to Offer Self Assessment Assistance

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With the self-assessment tax deadline looming in the midst of a global pandemic and no announcement of an extension from the government (28 days would do), 5.4m* taxpayers (45%) still needing to submit a tax return before the 31st January and many of those are left feeling hopeless and helpless, unsure how to complete it themselves and having difficulty finding or affording an accountant who can do it on their behalf.

Some will attempt to complete the tax return online themselves but without a Government Gateway ID that task will be impossible.  Obtaining the Government Gateway ID would require having their ID checked and confirmed online and without a valid UK passport and/or driving licence the task will lead to long phone calls on hold waiting for a HMRC advisor, who are currently running somewhat of a skeleton crew as a result of the pandemic (at least that’s the impression given due to the long waiting times even on the authorised agents helplines and the reduced opening hours).

Even if you do have Government Gateway ID (and password), you will need to work through HMRC’s Self-Assessment form, deciding which of the sections are relevant to you & compiling the information required for each part. Take a look at these help sheets especially useful for people with self-employed earnings (some of the business income references use the word business which can confuse as the rules and guidelines are equally applicable to sole traders working for themselves).

Also check out the HMRC’s toolkit: https://www.gov.uk/government/publications/hmrc-business-profits-toolkit.

 You will need to accurately assess all your business income and more so, expenses, ensuring the correct figures are entered and submitted.  Knowing what expenses you can and can’t claim can really have a negative or positive effect on the tax bill you will be presented with at the end but how do you ensure you are paying the correct amount of tax?

 Looking for assistance from HMRC’s website can provide some valuable information if you know what you are looking for (see the help sheets mentioned above) but from the distance, for the everyday taxpayer, this task can be rather daunting.  Finding personal help, assistance, and guidance can be difficult, especially when the people that can help those most are currently experiencing their busiest period in the industry whilst coping with the effects of COVID on their workforce.

Many may opt for the avoidance strategy until the £100 late filing penalty lands on their door and further threats of daily fines & interest kicks them into action.  You will have a ground to appeal any fines or penalties if you have been affected by COVID.  This will involve writing a formal letter to HMRC and providing any evidence they may request to overturn the fine.

We do recommend that however hard it maybe, it’s a good idea to put some money on your HMRC self-assessment account to settle last year’s tax if you can at least estimate it because at the end of February any tax still outstanding from the previous year which ended 05/04/20 will attract a surcharge which is almost impossible to appeal against so give it a go and work out your taxable profit and then put it in this calculator so you can guesstimate how much you need to rustle up.

If you need an injection to your cash flow even if you were eligible and claimed for the SEISS grants, we would strongly recommend you apply for the Bounce Back Loan Scheme (BBLS) if you have not done so already.  This can be done via your bank provider online & in many cases they may require you to open a business bank account.  You are then eligible for a maximum of 25% of your 2018/19 business turnover (a minimum of £2k and maximum amount of £50k being leant).  The interest rate for this loan is 2.5% for 6-years and the government will pay the interest for the first 12-months of the loan.

Taxfile is currently working closely with local government and our director is on the board of the local business improvement district, we like to think of ourselves as the local tax office for the people of south London, we may be able to give you a little help along the way so why not give us a call for a free 20 minute confidential chat on 020 8761 8000

 

*figure correct on 01/01/21

Self Assessment Income Tax Returns 2019/20 – COVID Edition

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To date there has been no change on the deadline to submit and pay your 2019/20 Self Assessment Income Tax return by 31st January 2021.

In preparation for our busiest period in the year we have been doing everything to ensure both our offices and business practices are ready to cope with the changes imposed on us by the Coronavirus pandemic.

At Taxfile we have been doing everything we can to make sure our offices comply by current pandemic safety practices.   We have fitted perspex screens between staff and clients, only allowing 2 clients in at a time, minimising each visit to a maximum of 15-minutes & socially distancing our staff members on site with a maximum of 3 in the main office at one time.

We would like to stress to all our existing & potential customers, we ARE OPEN if you need help in submitting your 2019/20 tax returns.  We currently offer a variety of ways to help you:

  1. Booking an appointment to see a tax agent face-to-face for 15 minutes – call us on 020 8761 8000 so we can arrange a time and date with you
  2. Offices are open for you to drop off paperwork to be processed and then sent through to a tax agent who can then discuss your return over the phone with you or face-to-face
  3. Email service where all electronic data can be sent directly through to the tax agents via emails, this is probably the easiest, quickest, and safest way to proceed.  You can directly send the agents your financial data through on email or using services such as dropbox or google sheets.  They can then calculate your return and liaise with you via phone & email.
  4. You can book an online ‘virtual’ meeting HERE

Regardless of which way or combination of ways suits your needs, know that we are here for you till the deadline date of 31/01/2021 but urge you to contact us sooner than later as we are restricted by the number of people we can physically see & data we can work through during these uncertain times.

We are also urging our clients to pay via online banking for their Taxfile invoices, details found on the bottom of our invoice, reducing the need to come in or phone in to pay a bill as we need to reduce the number of people in the office for health and safety & therefore reducing our resources available.  We are still accepting all payment forms but if clients CAN pay via online banking, then we are encouraging them to do so.

If you have not submitted your 2019/20 tax return (that in most cases will run from 6th April 2019 through to 5th April 2020), then now is the time to get all your financial data together, and decide which of the four methods outlined above will be most convenient for you.  Get in touch now & don’t leave it till the last minute.  This year is like no other!

Bounce Back Loan Scheme Deadline Extended

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[UPDATED FEBRUARY 2021] The Bounce Back Loan Scheme (BBLS) was an initiative struck up between the Government and banks to enable small businesses to access finances more quickly through the pandemic.  It allowed businesses to have access to 25% of their 2018/19 turnover, with a minimum loan of £2,000 and a maximum amount of £50,000.  The loan would need to be repaid within 6 years at a reduced interest rate of 2.5% and the Government would pay the first 12-months of the interest on your behalf.

The BBLS became a survival blood for many small businesses and initially the banks had set the cut-off date for applications to 30th November 2020 after the government had initially stated the deadline as 4th November 2020.

Now the government have asked the banks to extend the date even further, so now small businesses have until 31st March 2021 to apply for the BBLS.

To apply you can have  a look HERE for all available providers of the scheme.  All you need to do, is to go online and apply from your bank provider (if they are listed).  If you do not have a business bank account you will more than likely need a copy of your 2018/19 tax return to upload for them.

As our customer, if you require any assistance applying for the BBLS then please call us on 020 8761 8000.

SEISS Grant – Round 3

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Instead of constantly updating our original SEISS grant post we decided to create a new one as over the last month the government has chopped and changed the requirements, the dates, & the amount available due to the everchanging situation around the COVID-19 pandemic.

The points that need to be highlighted for the third extension of the SEISS grant are:

  • The prerequisite is the same as the previous two SEISS grants (changing from a prerequisite to be working if applying).
  • The amount is 80% for 3-months determined from your average trading profits like in the 1st SEISS grant application (changing from 20%, then 40%, then 80% for November & 40% for December and January)
  • Applications will open from 30/11 and will most probably follow suit of the two other applications, in that using your UTR & NI number you will then be given a date/time you can apply (changing from applications opening on 14/12/20).

If you need any help determining your application date or with the application then please call us on or after 30/11 on 020 8761 8000.

Self-Employment Income Support Scheme (SEISS) Deadlines and Extensions

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The deadline for the 2nd SEISS grant looms, please apply before it is too late.

The second SEISS grant is 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.

If you’re eligible and your business has been adversely affected on or after 14 July 2020, you must make your claim for the second grant on or before 19th October 2020.

That is less than 10-days from now.  If you need help making your claim or are unsure, please call us on 020 8761 8000.

The SEISS grants have been extended for 2 further payments but with a new prerequisite.

The scheme has been extended for a 3rd and 4th grant for those that are actively continuing to trade, but are facing reduced demand due to the coronavirus pandemic.

To be eligible for the grant extension self-employed individuals, including members of partnerships, must:

  • currently be eligible for the Self-Employment Income Support Scheme (although they do not have to have claimed the previous grants)
  • declare that they are currently actively trading and intend to continue to trade
  • declare that they are impacted by reduced demand due to coronavirus in the qualifying period (the qualifying period for the grant extension is between 1 November and the date of claim)

The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.

The third grant will cover a three-month period from 1st November 2020 until the end of January 2021.  This grant will only be 20% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total.

The fourth grant will cover a three-month period from the start of February until the end of April.

HMRC will review the level of this grant and set it in due course as its value will be dependent on how the pandemic has affected the workforce in February 2021.

All the SEISS grants are subject to Income Tax and National Insurance Contributions.

EDIT:  As of 22/10/2020 the government have updated the terms for the 3rd SEISS grant:

The Government will provide a taxable grant covering 40% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total.

To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
    • are currently actively trading but are impacted by reduced demand due to coronavirus
    • were previously trading but are temporarily unable to do so due to coronavirus
Bounce Back Loan Scheme (BBLS)

Bounce Back Loans for Struggling Businesses: Ending 30 November!

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If your small or medium-sized business has struggled due to adverse trading conditions caused by the pandemic, it may be eligible for a support loan through the Government’s Bounce Back Loan Scheme (‘BBLS’). However, time is running out — you only have until 4 November 2020* to arrange the loan with a lender. That’s just a few weeks away at time of writing. There are some great features, so don’t miss out if you need financial support …

Bounce Back Loans are interest-free for 12 months (with no repayments being required during that time). Thereafter, the interest will be just 2½% per annum. Small businesses can borrow between £2000 and £50,000 depending upon their turnover (the maximum allowed is 25% of their turnover in the 2019 calendar year, up to the £50k ceiling). Another major feature is that the Government guarantees the loan. BBLS loans have a six year term, but you can repay the loan early without incurring an early redemption fee.

The main requirements around eligibility are that:

  • your business is UK based;
  • it was established before 1st march 2020;
  • it has been adversely affected by the pandemic;
  • it is not in bankruptcy, liquidation or undergoing debt restructuring.

N.B. Banks, insurers (excluding brokers), re-insurers, public-sector bodies and state-funded primary/secondary schools are not eligible.

* IMPORTANT NOTE: many of the high street banks now seem to be stating a deadline of the end of November instead of the 4th. However, Taxfile’s advice is to apply before 4th November (the Government’s official, published deadline) to avoid possible disappointment.

A few other caveats apply, so Read more