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Furlough Scheme Extended until End of September

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.

SEISS Grant 4 – News Coming Soon!

SEISS Grant 4 – News Coming Soon!

Money Saving Expert founder Martin Lewis has announced¹ exclusive news about a possible 4th SEISS Grant for self-employed people. The Self-Employment Income Support Scheme (SEISS) offers direct financial support from the Government for those self-employed people who have seen a significant drop in profits due to the coronavirus pandemic, where eligible. He says the official announcement is currently scheduled for 3rd March 2021 during the Chancellor of the Exchequer’s Spring Budget.

Applications for the current 3rd SEISS grant closed on the 29th of January. The fourth SEISS grant period will cover the months February, March and April. Martin’s exclusive information suggests:

“… there will not be an announcement made on the amount of that grant and who is eligible […] until the budget, which is on the third of March. So over a month after the grant period starts, there won’t be news on exactly how much money you can get, and who is going to get it.”

He goes on to say:

“I doubt this actually means that people will receive their money any later, relatively, than they have done in the prior grants, because you’ve never been able to apply on the first day of the period”

Martin goes on to confirm that he suspects Read more

Bounce Back Loan Scheme (BBLS)

Bounce Back Loans for Struggling Businesses: Ending 30 November!

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

Job Support Scheme Replaces the Job Retention Scheme from 1st November 2020

The Job Support Scheme for employees starts 1 November 2020

The Job Retention Scheme (JRS) winds down at the end of October. It will be followed, for the next six months, by a new job support scheme, which subsidises the wages of employees working at least a third of their normal hours, to further support viable UK employers who face lower demands due to COVID-19.

In an attempt to keep employees attached to the workforce, the Government will be introducing a new Job Support Scheme from 1 November 2020, where employees will need to work a minimum of 33% of their usual hours.

For every hour not worked the employer and the Government will each pay one third of the employee’s usual pay. The government contribution will be capped at £697.92 per month.

Employees using the scheme will receive at least 77% of their pay (where the Government contribution has not been capped) & the employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice.

The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme.

All Small and Medium-Sized Enterprises (SMEs) will be eligible. Large businesses will be required to demonstrate that Read more

Chancellor Philip Hammond's Autumn Budget Statement, 22 November 2017

The Chancellor’s Autumn Budget 2017

This week, Chancellor of the Exchequer Philip Hammond delivered his Autumn Budget Statement to the House of Commons. View his full 1 hour speech in the official UK Parliament video below, which also includes a response from Jeremy Corbyn, leader of the opposition:

The biggest news from this budget was the Stamp Duty announcement, wherein first time buyers buying a property up to £300,000 in value will no longer pay Stamp Duty at all (saving £5k), nor pay it on the first £300,000 of homes costing up to £500,000. Money man Martin Lewis gave his take on the proposed Stamp Duty changes and answered frequently asked questions pertaining to exactly what defines a first time buyer in an interview on Good Morning Britain yesterday — here is a 5 minute clip:

Other winners included

  • The Personal Allowance, which is the amount people can earn before they need to start paying income tax, is set to increase by £350 from £11,500 to £11,850 for those earning up to £100k per annum.
  • The National Living Wage (NLW) will increase from £7.50 to £7.83 per hour from April 2018. This will affect UK workers aged over 25.
  • The Chancellor promised investment of £160m in 5G mobile networks …
  • … and a total of £550m for electric cars.
  • He also set aside an additional £1.5 billion in Universal Credit to help those on benefits.
  • £40m was set aside for a teacher training fund for under-performing schools in England.
  • NHS England is to receive £2.8BN in investment (less, though, than the £4BN NHS bosses said is needed).
  • From April 2018, the Consumer Price Index (CPI) is set to replace the Retail Price Index (RPI) as the inflation measure through which business rates will be calculated. It is anticipated that this change will save businesses £2.3BN in the first three years of the change.
  • The Chancellor also abolished the very unpopular staircase tax and promised that those affected to date by the staircase tax would see original rates reinstated. Revaluations will take place every three years (previously five) after the next scheduled revaluation in 2022.

Losers included:

  • The Chancellor revised down the growth forecasts for GDP, productivity growth and business investment.
  • £3BN was set aside for helping to combat Brexit challenges.
  • For second property owners, powers have been given to local authorities to charge a 100% council tax premium on empty houses. (See our note about those getting an income from property rental below).

If you have any questions about how the Autumn Budget might affect you, or any queries about any tax or accounting issues and requirements you may have, simply contact Taxfile on 0208 761 8000, send us a message here or book a 20 minute appointment online here and we’ll be happy to help. We also offer specific tax help and accounting for landlords so do get in touch if you would like to make sure you’re claiming no more and no less than you should if you’re getting an income from letting property.

Links to more detailed HMRC information about the Autumn Budget Statement can be read online here.

VAT on eBay & Amazon Fees - all Change for UK Sellers

VAT Clampdown for UK Sales on eBay & Amazon

VAT on eBay & Amazon Fees - all Change for UK Sellers

According to a website1 run by a campaigning group of UK eBay and Amazon business sellers, HMRC and UK traders lost out on £27 billion in sales revenue and taxes from such online marketplaces over the last three years alone. The group has campaigned for some time against over-leniency by HMRC towards overseas traders, particularly from China, who have not been charging VAT on products, despite those products being located (often via UK fulfilment houses) and supplied within the UK. Moreover, the overseas sellers’ volumes are also often well over the threshold for registering for VAT if selling from inside the UK, yet many have continued to flout the law and seem to have been getting away with it for a considerable time. That hurts both HMRC in terms of lost VAT and tax revenue, as well as making it difficult for compliant UK sellers to compete against competitor prices that seem ‘too good to be true’.

“This abuse has grown significantly and now accounts for £1 – 1.5bn of the total VAT gap. These overseas traders are unfairly undercutting all businesses trading in the UK, abusing the trust of UK consumers and depriving the government of significant revenue.”

(Source: David Gauke MP, Chief Secretary to the Treasury, 16th March 2016).

Levelling the Playing Field

However, following new changes that came into effect on 1st August, that is now starting to change. While it’s not yet a perfect system to fight VAT fraud in online marketplaces and level the playing field for legitimate UK businesses, it is at least a start. Genuine private sellers using the platforms will, though, see a small increase to their costs in the form of VAT now being levied on eBay and Amazon fees, but hopefully it’s a small price to pay to make for a more fair, and legal, system overall.

VAT Changes Starting This Month

As part of the March 2016 Finance Bill delivered by then Chancellor George Osborne, UK individuals selling on eBay will begin paying VAT on eBay charges, starting on the 1st of August (2017). The VAT rate will be the standard 20% rate and will be automatically charged on eBay fees to UK sellers who have not registered as business sellers with the company. It may at first seem odd to target non-businesses, but actually this is a way to force the likes of Amazon and eBay to put pressure on those who have not registered with them as businesses when, in many cases, they should have. Such online marketplaces will also potentially become liable for the outstanding VAT on products actually sold if they do not take measures to counter (or remove) non-compliant overseas sellers.

“HMRC will also be given new powers to make online marketplaces jointly and severally liable for the unpaid VAT of overseas businesses who are non-compliant with UK VAT rules and using their platforms to sell through … These measures will provide HMRC with the tools necessary to tackle the overseas businesses who do not comply with UK VAT rules and help level the playing field for all businesses.”

(Source)

Those businesses operating within the UK will need to properly register as business sellers, in which case they will generally also need to account for VAT as a business if their taxable turnover is above the VAT threshold of £85,000 (or £70,000 if ‘distance selling’ into the UK) over the course of a year.

UK eBay sellers, and overseas sellers supplying/fulfilling orders completely within the UK, will now Read more

The Spring Budget, March 2017

Spring Budget 2017: Key Changes Affecting SMEs & the Self-Employed

Philip Hammond, Chancellor of the Exchequer, delivered his Spring Budget to the House of Commons today.

If you missed it, you can watch and listen to the entire speech by clicking the video above. For those without 55 minutes to spare, we spotlight the key changes, particularly in relation to tax, National Insurance, the self-employed and small businesses.

  • For the self-employed, Class 2 National Insurance Contributions (NICs) were already set to be abolished from April 2018. Today, to the surprise of many, the Chancellor announced that Class 4 NIC rates will increase from 9% to 10% from April 2018, increasing again to 11% in April 2019. The Chancellor said that this was to more closely align self-employed NI rates with those paid by employees, particularly in view of the new State Pension to which the self-employed will now have access.
  • Tax-free dividends for those working through a limited company will also be reduced from the current £5,000 level to just £2,000 in April 2018. Corporation Tax will then be charged above that threshold. Again, the reason cited was to bring the self-employed more in line with employees in terms of tax paid overall.
  • The National Living Wage, for those over 25, will increase to £7.50 per hour from April.
  • From April this year, the personal allowance (the amount people can earn before paying income tax) will increase to £11,500 and to £12,500 by 2020. The threshold for higher rate tax will also increase from £43,000 to £45,000 this April.
  • Up to £2,000 (tax-free) will be available towards the cost of childcare for children under 12 from April this year. So for every 80 pence you pay in childcare costs up to £10,000 maximum, the government will add a further 20 pence.
  • Those lucky enough to be able to afford it will be able to save up to £20k maximum in their ISAs from this April. There will also be an NS&I bond introduced, which will pay 2.2% interest on a maximum of £3,000 per person.
  • There will be help for businesses following business rate increases, particularly pubs, which will receive a £1,000 discount if their rateable value is less than £100k (apparently that’s 90% of all English pubs). Also businesses coming out of ‘small business rate relief’ will be helped through the transition with a promise of increases no larger than £50 per month from next year.
  • There will also be an expansion of the clampdown on tax avoidance where some businesses were converting capital losses into trading losses.

Other announcements made by the Chancellor Read more

Guy Bridger outside the Tax Office

“Pay As You Go” Self-Assessment is on it’s way!

Pay-as-you-go Self AssessmentA few years ago Guy Bridger, from Taxfile, was helping to advise The Office of Tax Simplification and the then Director Michael Jack. Guy proposed that, while the bulk of the working population have their taxes calculated by their employer and thereforGuy Meets Rt. Hon Michael Jacke pay taxes in ‘real time’ with clarity, ease and convenience, the same was unfortunately not true for the UK’s small business owners and the self-employed. For those, it is too often the case that taxes are paid as much as 18 months in arrears because of limitations in the existing tax system. This time lag often means that the tax due to be paid has been spent already, simply because that old system had too large a reporting and payment window. So Guy suggested that ‘real time’ reporting and payments of tax would be significantly more convenient and beneficial to the small business owner and self-employed individual. It would enable them to keep on top of taxes and, as an added bonus, their accounts records too.

The Government has now recognised this good advice. In a new system nicknamed ‘Pay As You Go Self-Assessment’, the Chancellor has announced that small businesses, landlords and self-employed workers making more than £10k in profit each year will be able to account for tax in virtually “real time”. This will be made possible via Read more

Tax Credit Cuts Blocked by the House of Lords

House of Lords vs The Chancellor

In an almost unprecedented move, the House of Lords has backed a motion asking the government to revise its proposed tax credit cuts. This is the first time in 100 years that the lords have voted down a financial package and this is an embarrassing blow to George Osborne. The Chancellor has been asked to delay his proposed tax cuts until he comes up with a way of compensating low paid workers over the course of the first three years.

At present 9 in every 10 households receive tax credits but under the Chancellor’s new proposals this would reduce to 5 out of every 10 from April 2016. This means 3 million working families would lose, on average, about £1000 if the proposed changes go through next April.

Working Tax Credit & Child Tax Credit

There are 2 types of credit; Working Tax Credit and Child Tax Credit. Under the Chancellor’s new proposals Read more

Landlords warned over tax on Income from lettings & property investments

Buy-to-let Changes Are Coming — Landlords Beware

Landlords warned over tax on Income from lettings & property investmentsA warning and reminder to landlords: the Chancellor’s Summer budget back in July will hit buy-to-let investors’ profits once the changes kick in, so now is the time to start planning ahead. Not all landlords will be affected though; if their rental property is mortgage free or if they sell within the next 2 years these changes won’t affect them. However those landlords that are Higher and Additional taxpayers will notice their tax relief reduce by 2020. Also, investors near the tax threshold could find themselves in the next tax bracket, which could have a knock-on effect and increase their tax exposure.

So what are the proposed tax changes?

There are basically two:

  1. Firstly, the amount of tax relief landlords can claim on their mortgage interest will now be capped at basic rate and;
  2. Secondly, landlords will no longer be able to subtract their mortgage interest from their rental income before they calculate their taxable profit.

One in five landlords are expected to have to pay more tax because of these changes, however the new rules will not be phased in until between 2017 and 2021 according to the latest information.

What steps can landlords take?

There are several steps that investors can take to conserve as much profit as possible and to limit the amount of any extra tax payable. For example: Read more