by Acuaccounts | Nov 6, 2020 | accounting, Loans, tax
As England goes back into a national lockdown this November the chancellor has announced a new series of measures increasing the support previously announced with the Winter Economic Plan which included the following highlights:
- Extension of the Coronavirus Job Retention Scheme further (the furlough scheme), until the end of March
- Job Retention Bonus of £1,000 per retained employee will not be paid in February but instead redeployed a retention incentive at the right time
- Increase the third self-employed grant, covering November to January, from 55% to 80% of trading profits.
Extension of the Coronavirus Jobs Retention Scheme (CJRS): Furlough again at 80%
- The government is extending the CJRS until the end of March for all parts of the UK. To be reviewed in January to decide whether economic circumstances are improving enough to ask employers to contribute more. The Job Support Scheme is postponed.
- Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
- Employer flexibility: Businesses will have the flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing employees full-time.
- Employer contribution: There will be NO employer contribution to wages for hours not worked. Employers will only be asked to cover National Insurance and Employer pension contributions for hours not worked. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.
- Payment: The extended CJRS will operate as the previous Scheme did, with businesses being able to claim either shortly before, during, or after running payroll. Claims can be made from 8 am Wednesday 11 November. Claims made for November must be submitted to HMRC by no later than 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
- Employee eligibility: Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS (if other eligibility criteria are met). An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
- Employees that are re-employed: Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
More support announced for the self-employed at 80% of trading profits capped at £2,500/month
- The government has recently announced an extension of the Self-Employment Income Support Scheme to support self-employed individuals which will be returned the overall level of the grant to 80% of trading profits covering November to January for all parts of the UK. This provides equivalent support to the self-employed as we are providing to employees through the government contribution in the CJRS. It is calculated based on 80% of 3 months’ average trading profits, paid out in a single instalment and capped at £7,500.
- Timing: HMRC will pay this more generous grant sooner than planned and in time for Christmas – the window for claiming a grant will open on 30 November, two weeks earlier than previously announced.
- The Government has already announced that there will be a fourth SEISS grant covering February to April. The Government will set out further details, including the level, of the fourth grant in due course.
More financial support for local businesses in England and extension of loan schemes including BBL
- Businesses in England that are forced to close due to national or local restrictions will receive up to £3,000 per month. This will benefit over 600,000 business premises.
- 90% of small and medium-sized business premises in the closed Retail, Hospitality, and Leisure sectors should broadly have their monthly rent covered by these grants (based on VOA data on Rateable Values as the best proxy we have for rent).
-
The application deadline for loan schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme – has been extended to the end of January 2021. This will give businesses two extra months to make loan applications (relative to the current deadline of 30 November).
- The Bounce Back Loan Scheme rules will be adjusted to allow those businesses who have borrowed less than their maximum (i.e. the lower of £50,000 or less than 25% of their turnover) to top-up their existing loan. Businesses will be able to take-up this option from next week; they can make use of this option once. Some businesses might not have anticipated the disruption to their business from the pandemic would go on for this long; this will ensure that they are able to benefit from the loan scheme as intended.
To find out what the recent announcement means for your business get in touch via email or phone.
For more information about what has been outlined above the full updates are at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932977/ECONOMIC_SUPPORT_FACTSHEET_5_November.pdf
#Employer #Employee #Salary #Wages #PAYE #business #update #coronavirus #covid19 #income #support #SEISS
by Acuaccounts | Oct 8, 2020 | latest news, tax
Please see our latest blog article for the more recent updates from the chancellor’s statement on November 5th, 2020
The chancellor announced on September 24th 2020 a series of measures as part of the Winter economic plan with the aim to protect jobs and support businesses over the coming winter months. Central to the plan is a new Job Support Scheme, the extension of the Self Employment Income Support Scheme SEISS and more flexibilities for businesses to help pay back loans.
We have outlined what you need to know as a business owner or self-employed and invite you to reach if you need further clarification or support in implementing these measures for yourself and your business.
The new Job support scheme starts November 1st 2020
- The Job support scheme takes the place of the current furlough scheme, due to end October 31
- Employees must be working at least 33% of their usual hours
- The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
- The level of grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.
- Currently confirmed to be available for six months ending 30 April 2021
- Less generous than the current Job Retention Scheme but highly flexible with employees being able to cycle on and off the scheme without the need to keep the same pattern each month. Each short-time working arrangement must cover a minimum period of seven days.
- Can be combined with the Jobs Retention Bonus (£1,000 one-off payment to employers for every furloughed employee who remains continuously employed through to 31 January 2021)
- The scheme applies to all employees, whether they have been previously furloughed or actively working. Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee
Here is an example of how the Job support scheme works:
To help you navigate the complexities and calculate how the scheme could best work for your business get in touch via email or phone.
Tax cuts and deferrals for businesses and self-employed
- 15% VAT cut for the tourism and hospitality sectors is extended to the end of March 2021
- If your business has deferred their VAT bills the New Payment Scheme gives you the option to pay back in smaller instalments where rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
- 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Some good news and not so good news for the self-employed
- The Self Employment Income Support Scheme Grant (SEISS) has been extended to cover three months’ worth of profits for the period from November to the end of January next year.
- However, the grant will cover only 20% of average monthly profits, up to a total of £1,875.
- The taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus.
If you have any questions around taxable grants or your next self-assessment tax return due to January 2021 book a call or send us an email
Bounce back loans have been extended
- More than 1.17 million ‘bounce back loans’ have been issued since the scheme launched in May and applications have been extended to the end of November
- Your business can borrow between £2,000 and £50,000 capped at 25% of your total turnover
- No interest will be charged and no repayments will need to be made in the first 12 months and after 12 months, all banks will charge a fixed 2.5% annual interest.
- Bounce back loans may be extended from six years terms to ten, which will cut monthly repayments by nearly half.
- Interest-only periods of up to six months and payment holidays will be available
If you are interested in applying for a Bounce Back Loan from £2,000 – £50,000 or have already taken out a loan and want to verify how these updates affect your cash-flow get in touch to book a financial assessment call.
Kickstart scheme to support employment for young people
- You can create 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment
- And organisation regardless of size can apply for funding. If you have fewer than 30 job placements to offer we can put you in touch with an organisation that can apply on your behalf
- Funding available for each job will cover the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
- The job placements created with Kickstart funding must be new jobs. They must not replace existing or planned vacancies or cause existing employees or contractors to lose or reduce their employment
- The roles you are applying for must be: a minimum of 25 hours per week, for 6 months and paid at least the National Minimum Wage for their age group. Roles should not require people to undertake extensive training before they begin the job placement
- The government will initially prioritise young people aged between 16 and 24 who are ready for an opportunity will be supported by their Jobcentre Plus work coach to enrol in the scheme.
To find out what the Winter Economic Plan means for your business get in touch via email or phone.
#Employer #Employee #Salary #Wages #PAYE #business #update #coronavirus #covid19 #income #support #SEISS
by Acuaccounts | Apr 5, 2019 | latest news, tax
Welcome…
To AcuAccount’s April’s Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year. Please contact us for advice in your own specific circumstances. We’re here to help!
Making Tax Digital Update
Biggest change from HMRC has come into effect! Meaning VAT-registered businesses with a taxable turnover above the VAT threshold are required to use the Making Tax Digital (MTD) service to keep records digitally and use software to submit their VAT returns from 1 April 2019.
Updated guidance
HMRC have published an updated version of their Making Tax Digital Mythbusters factsheet. The ‘myths’, and HMRC’s comments covered in the factsheet are summarised as follows:
- Businesses don’t know it’s happening or what to do: HMRC state that over 80% of businesses had stated to make preparations for MTD by December 2018
- Everyone will have to join the service by 1 April: Businesses are required to join MTD and submit their VAT returns using the new service for their first VAT period which begins on or after 1 April. For the majority, who file quarterly, their first MTD returns won’t be due until August or later
- Under MTD, businesses will have to provide more information than they already do: business will need to provide information to HMRC more regularly than they do now
- MTD won’t reduce errors: HMRC maintain that the integrated approach offered by MTD will, in the long term, reduce reporting errors
- HMRC have underestimated the admin burden and costs to businesses for MTD: costs will differ from business to business but there are MTD-compatible solutions available at low cost for most businesses
- Businesses can’t use spreadsheets as part of MTD: Businesses can choose to use spreadsheets to both maintain digital records and perform tax calculations, provided the spreadsheets combine with some form of ‘bridging’ software that will allow their VAT return data to be sent to HMRC from the spreadsheet
- Small businesses should be automatically exempt: Only those with taxable turnover above the VAT threshold of £85,000 are required to join MTD, although the c.1m VAT registered businesses below the threshold can choose to join voluntarily.
- HMRC will penalise me if we get the new process wrong: During the first year of mandation HMRC will take a light touch approach to digital record keeping and filing penalties where businesses are doing their best to comply with the law.
For further information on MTD, see the GOV.uk website.
Employee Mileage Allowances
Confusion often arises over differing tax treatment of mileage allowances paid to employees using their own cars for business, and those provided with a company car.
An employee using their own car for work can claim a mileage allowance from their employer, which is designed to cover the costs of fuel and wear and tear for business trips. The mileage allowance will be tax-free if it does not exceed HMRC’s Approved Mileage Allowance Payment (AMAP) rates, which are currently as follows:
Cars and vans: first 10,000 business miles per year – 45p per mile; over 10,000 miles – 25p per mile
Motor cycles: fist 10,000 business miles per year – 24p per mile; over 10,000 miles – 24p per mile
Bicycles: first 10,000 business miles per year – 20p per mile; over 10,000 miles – 20p per mile
Unless the employer reimburses employees at a higher rate, the payments can be paid tax-free and do not need to be reported to HMRC. However, anything paid above the approved rates is tax deductible, and must be reported to HMRC on form P11D.
If an employer pays less than the approved rates, the employee can claim income tax relief from HMRC for the shortfall. This can be done via a self-assessment tax return or by completing form P87.
For NIC, the 45p per mile rate is used for all business miles in the tax year, not just the first 10,000 miles.
The AMAP scheme does not apply for company cars. However, employees can still claim fuel expenses for all business mileage where they pay for the fuel. The rates are lower than the AMAP rates and are updated quarterly. Current and previous rates can be found on the Gov.uk website at https://www.gov.uk/government/publications/advisory-fuel-rates.
Amounts paid in excess of HMRC’s advisory rates will be taxable.
If the company pays for all fuel (business and private), the fuel benefit will be charged, which is based on the cash equivalent of the benefit each tax year. The fuel benefit is fixed each year (for 2019/20 it is £24,100). This figure is multiplied by the CO2 percentage figure applicable to the company car.
It is also worth noting that if the company pays for all fuel, but the employee reimburses the company for private use, as long as the amount paid back is equal to, or more than, the amount for personal fuel in the same tax year, the employer will not have to pay anything to HMRC or report on such transactions.
NMW and NLW increases take effect
New rates for the National Minimum Wage (NMW) and National Living Wage (NLW) (aged 25 and over) apply from 1 April 2019, and employers must ensure that they implement them accordingly. The rates are as follows:
– 25 and over – £8.21 per hour;
– 21- to 24-year-olds – £7.70 an hour;
– 18- to 20-year-olds – £6.15 an hour;
– under 18s – £4.35 an hour; and
– Apprentice rate – £3.90 an hour.
All other workers including pieceworkers, home workers, agency workers, commission workers, part-time workers and casual workers must receive at least the NMW.
Severe penalties may be imposed for failure to comply with NMW/NLW obligations. Broadly, the penalty percentage which may be imposed for non-compliance is now 200%. The maximum penalty is a hefty £20,000 per worker, although it may be reduced by 50% if the unpaid wages and the penalty are paid within 14 days.
Workplace Pension
The minimum contributions you and your staff pay into your automatic enrolment workplace pension scheme will increase from 6 April 2019. This is also sometimes known as phasing.
It is your responsibility to make sure these increases are implemented.
Who does this apply to?
All employers with staff in a pension scheme for automatic enrolment must take action to make sure at least the minimum amounts are being paid into their pension scheme. This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing scheme.
However, you don’t need to take any further action if you don’t have any staff in a pension scheme for automatic enrolment, or if you are already paying above the increased minimum amounts.
What are the increases?
This table below shows the minimum contributions you must pay and the date when they must increase:
| Date |
Employer minimum contribution |
Staff contribution |
Total minimum contribution |
| New rate: 6 April 2019 onwards |
3% |
5% |
8% |
| Current rate: 6 April 2018 to 5 April 2019 |
2% |
3% |
5% |
If you need further assistance on any of the above topics just let us know or you can send us a question.
We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year. Please contact us for advice in your own specific circumstances. We’re here to help!
by Acuaccounts | Mar 13, 2019 | latest news, tax
Under Making Tax Digital (MTD) for VAT, which is coming into effect from 1st April 2019, these records must now be kept digitally within functional compatible software. See the following outline as a guide to what HM Revenue & Customs (HMRC) are looking for:
Essential Details
- Your Business Name
- The address of your principal place of business
- Your VAT registration number
- A record of any VAT accounting schemes that you use
For each Supply you Make you must record:
– The date
– The value
– The rate of VAT charged. Where no VAT is charged, you must record whether the supply is zero rated, exempt or outside the scope of VAT.
If you account for VAT using a retail scheme you are not required to keep a separate record of the supplies that make up your Gross Daily Takings (GDT) within functional compatible software.
Values – OUTPUT (SALES)
To show the link between the output tax in your records and the output tax on the return, you must
have a record of:
- The output tax you owe on sales
- The output tax you owe on acquisitions from other EU member states
- The tax you are required to pay on behalf of your supplier under a reverse charge procedure
- The tax that needs to be paid following a correction or error adjustment
- Any other adjustment required by VAT rules
For each supply you Receive you must record:
To show the link between the input tax in your records and the input tax on your return you must
have a record of:
– The date
– The value
– The amount of input tax that you will claim
Values – INPUT (PURCHASES)
To show the link between the input tax in your records and the input tax on your return you must
have a record of:
- The input tax you are entitled to claim from business purchases
- The input tax allowable on acquisitions from other EU member states
- The tax that you are entitled to reclaim following a correction or error adjustment
- Any other necessary adjustments
The complete set of digital records to meet MTD requirements do not all have to be in one piece of software. It there is a digital link between the pieces of software, records can be kept in a range of compatible digital formats.
To ensure your records are prepared according to the upcoming changes speak to one of our VAT experts.
by Acuaccounts | Mar 11, 2019 | accounting, tax
Making Tax Digital (MTD) is the new regime for record keeping and filing of VAT returns.
We are fast approaching the start of this new regime and we know that change can be painful so here is a quick reminder of the upcoming changes and some pointers as to how you can prepare.
When do things need to change?
From 1 April 2019, if you are registered for VAT, or are in the process of registering, you must start using MTD. This means that you may already be operating within an accounts year that includes a VAT return period that will require digital records.
Filing with HMRC
Under the new regime, VAT Information must go to HMRC via an Application Programme Interface (API). This means that you will need software, bridging software or API enabled spreadsheets. For VAT return periods starting on or after 1 April 2019, there will no longer be an option to submit your return through the Government Gateway by logging in and completing the boxes.
It will become mandatory for businesses that fall within MTD to keep digital records.
How can businesses get ready?
HMRC are not developing MTD compatible VAT software. However, their website details MTD compliant software providers here: https://www.gov.uk/government/publications/software- suppliers-supporting-making-tax-digital-for-vat/software- suppliers-supporting-making-tax-digital-for-vat
If you currently use accounting software, you may need to upgrade. You should be able to obtain advice and support from your existing provider via a telephone or online support service but if you prefer then please call us as we may even get you a better deal.
If you currently use only spreadsheets and then submit the return through the Government Gateway, please get in touch to discuss the options available to you and the services we can provide as agent.
If you currently maintain records on paper, your processes must change. You will need to either acquire and use appropriate software or engage us to do your record keeping and reporting for you.
If you have authorised us to submit your VAT return for you as agent, we can still do this. We will need to have access to the functional compatible software that holds your mandatory records.
Will there be penalties if businesses are not ready on 1 April 2019?
HMRC are aware that these changes are challenging to businesses and they are proposing a soft-landing period of at least 12 months, with no record keeping penalties. This should allow businesses time to update their systems. During that soft-landing period, it will be acceptable for data to be transferred between software and spreadsheets manually; although the final submission will have to be made to HMRC using API enabled software.
What will not change?
Businesses will not need to adjust their VAT reporting dates or be required to provide any more VAT information than they do already.
The current exemptions for electronic submissions will also apply to MTD, e.g. on the grounds of a taxpayer’s religious beliefs, practical inability to use a functional compatible software system or when subject to insolvency procedures.
by Acuaccounts | Mar 7, 2019 | latest news, tax
As some of you may be aware, there is a New Legislation that applies from 6th April 2019 that will require all employers to (a) provide payslips to all workers, and (b) show hours on payslips where the pay varies by the amount of time worked.
This guidance is to help employers, workers to understand the basics with the new legislation. Please find the main changes as follows:
Showing hours on payslips
Where pay varies by time worked From April 2019 additional information must be shown on a payslip for workers whose pay varies depending on the number of hours they have worked. The hours can be shown either as a single total of all such hours in the pay period, or they can be broken down into separate figures for different types of work or different rates of pay. It should be clear which pay period they were worked in. They only need to be shown for pay periods which begin on or after 6 April 2019. The hours that must be shown on a payslip are a separate matter from the number of hours worked for National Minimum Wage (NMW) purposes (although for workers who are paid by the hour, they may well in practice be the same).
Variations caused by unpaid leave or statutory sick pay
If a worker’s pay does not vary by time worked (for example because they are paid a fixed salary each month) there is no need to include an hourly figure to account for variations in pay caused by taking unpaid leave or being on statutory sick pay. Such cases do not amount to pay varying depending on the amount of time worked, but rather to pay varying because of a departure from the normal working and pay arrangements, caused by the unpaid leave or statutory sick pay. However, if a worker is paid according to the amount of time worked and takes unpaid leave or receives statutory sick pay any hours they did work will still need to be included on their payslip.
Enforcement
A worker who thinks that they have not received a payslip, or that the payslip they have received lacks the required information, may bring a claim before an Employment Tribunal.
For more details on the upcoming changes speak to one of our Payroll Experts.
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