Tax Diary May/June 2020

1 May 2020 – Due date for corporation tax due for the year ended 30 July 2019.

19 May 2020 – PAYE and NIC deductions due for month ended 5 May 2020. (If you pay your tax electronically the due date is 22 May 2020).

19 May 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2020.

19 May 2020 – CIS tax deducted for the month ended 5 May 2020 is payable by today.

31 May 2020 – Ensure all employees have been given their P60s for the 2019-20 tax year.

1 June 2020 – Due date for corporation tax due for the year ended 31 August 2019.

19 June 2020 – PAYE and NIC deductions due for month ended 5 June 2020. (If you pay your tax electronically the due date is 22 June 2020)

19 June 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2020.

19 June 2020 – CIS tax deducted for the month ended 5 June 2020 is payable by today.

Companies House support for ailing businesses

The following announcement was recently made by Companies House:

Businesses will be given additional support to help them meet their legal responsibilities under changes announced today (16 April 2020).

Companies House will temporarily pause the strike off process to prevent companies being dissolved. This will give businesses affected by the coronavirus outbreak the time they need to update their records and help them avoid being struck off the register.

In addition, companies issued with a late filing penalty due to COVID-19 will have appeals treated sympathetically.

Today’s announcement builds on measures already implemented by the Secretary of State for Business, Energy and Industrial Strategy, which give businesses the ability to apply for a 3-month extension to file accounts with Companies House.

As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension.

Coronavirus – Business update 4 May 2020

Low interest rates announced for Bounce-Back Loan Scheme (BBLS)

This new scheme announced last week, was the subject of a letter from the Chancellor (1 May 2020) to the accredited lenders who have been instructed to facilitate the scheme since 4 May 2020.

In his letter he said:

In my statement to the House of Commons on Monday I announced the government’s intention to launch a new scheme, the Bounce Back Loans Scheme (BBLS). I am writing to clarify the approach I am taking to a number of matters relevant to the design and operation of BBLS before its launch on Monday.

He followed with the following clarification on pricing:

As a 100% guaranteed loan scheme, the price of BBLS is critical to its success: together, we need to ensure that these loans are affordable and accessible. As such, and incorporating a range of data, I have come to the decision that the rate should be set at 2.5%.

Readers who have been contemplating the value of this scheme to their business will be further encouraged by this announcement on interest rates. 2.5% interest cost together with the government’s 100% guarantee, no interest cost or fees and no loan repayments in the first year, make this an attractive proposition.

However, business owners contemplating this, or any other form of loan funding should undertake a basic risk assessment to ensure this is the most effective way to fund your business during this difficult time.

We can help if you need assistance with preparing cash-flow forecasts or other projections.

 

 

Scotland announces lifeline support schemes for businesses

£100m of additional grants for smaller businesses in Scotland was announced last week, 30 April 2020.

In a published news update posted online 30 April 2020, three schemes were announced:

  • £34 million Newly Self-Employed Hardship Fund, managed by Local Authorities, will be allocated to the newly self-employed who are ineligible for UK support (as they became self-employed since April 2019) – but are facing hardship – with £2,000 grants
  • £20 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies with support from Creative Scotland and VisitScotland for small and micro creative, tourism and hospitality companies not in receipt of business rates relief with grants of up to £25K.
  • £45 million Pivotal Enterprise Resilience Fund managed by the Enterprise Agencies providing bespoke grants and wrap around business support to viable but vulnerable SMEs who are vital to the local or national economic foundations of Scotland.

The Scottish Government is also providing £1 million to top up Creative Scotland’s Bridging Bursaries in the not-for-profit sector.

These are welcome additions to the other UK grants on offer to counter COVID-19 disruption in Scotland. Perhaps the Chancellor in London will take note of the Newly Self-Employed Hardship Fund as this is equally relevant to the other sectors of the UK.

Do not forget to file returns for benefits and expenses

Aside from the plethora of schemes to support businesses during the coronavirus disruption, employers should not forget that there is a raft of filing obligations that still need to be met. This post lists the various employer reporting obligations regarding employee benefits and expenses for 2019-20.

 

The following table is reproduced from the government website:

 

What you need to do

Deadline

Submit your P11D forms online to HMRC

6 July following the end of the tax year

Give your employees a copy of the information on your forms

6 July

Tell HMRC the total amount of Class 1A National Insurance you owe on form P11D(b)

6 July

Pay any Class 1A National Insurance owed on expenses or benefits

Must reach HMRC by 22 July (19 July if you pay by cheque)

 

1. P11Ds – these are the forms that advise HMRC of the benefits provided by employers to employees. For example, company cars, health insurance, etc.

2. Class 1A NIC is an employer National Insurance charge usually based on 13.8% of the cumulative benefits advised on P11D submissions for employees.

Employers will be relieved to note that any Class 1A NIC paid is a deduction for tax purposes.

And do not forget the P60s

Employers have a statutory duty to provide employees with a copy of their P60 – a statement of gross pay and tax deducted – for the tax year 2019-20, on or before 31 May 2020.

We can help

Clients to whom we provide payroll and associated services will be glad to know that we will complete all of the above for you; unless you have other arrangements to handle these tasks in-house.

Please call if you need help.

Aggressive rent collection to be banned

High street shops and other companies under strain will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic.

In a recent press release a government spokesperson said:

“The majority of landlords and tenants are working well together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics.

To stop these unfair practices, the government will temporarily ban the use of statutory demands (made between 1 March 2020 and 30 June 2020) and winding up petitions presented from Monday 27 April, through to 30 June, where a company cannot pay its bills due to coronavirus. This will help ensure these companies do not fall into deeper financial strain. The measures will be included in the Corporate Insolvency and Governance Bill, which the Business Secretary Alok Sharma set out earlier this month.

Government is also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.

This will further safeguard the high street and millions of jobs by helping to protect them from permanent closure during this time. However, while landlords are urged to give their tenants the breathing space needed, the government calls on tenants to pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too.”

Under these measures, any winding-up petition that claims that the company is unable to pay its debts must first be reviewed by the court to determine why. The law will not permit petitions to be presented, or winding-up orders made, where the company’s inability to pay is the result of COVID-19.

The new legislation to protect tenants will be in force until 30 June and can be extended in line with the moratorium on commercial lease forfeiture.

Legislation will also be brought forward to prevent landlords using commercial rent arrears recovery (CRAR) unless 90 days or more of unpaid rent is owed.

The Financial Conduct Authority, the Financial Reporting Council and the Prudential Regulatory Authority have also issued a joint statement encouraging investors and lenders to consider the issues arising directly from the COVID-19 pandemic in responding to potential breaches of covenants.

Emergency legislation already introduced by government includes a suspension of forfeiture rights, which prevents all commercial tenants from being removed from their properties until 30 June. The government has also announced new insolvency measures which will provide further support to businesses impacted by the COVID-19 pandemic.

Carry-over of unused annual leave

The rules that would have limited the rights of employees in key industries to carry forward any unused annual leave will be delighted by the announcement made two weeks ago. This will mainly apply to workers in key industries such as food and healthcare.

Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next two leave years, under measures introduced by Business Secretary Alok Sharma Friday 27 March.

Currently, almost all workers are entitled to 28 days holiday including bank holidays each year. However, most of this entitlement cannot be carried between leave years, meaning workers lose their holiday if they do not take it.

There is also an obligation on employers to ensure their workers take their statutory entitlement in any one year – failure to do so could result in a financial penalty.

The new regulations will allow up to four weeks of unused leave to be carried into the next two leave years, easing the requirements on business to ensure that workers take statutory amount of annual leave in any one year.

This will mean staff can continue working in the national effort against the coronavirus without losing out on annual leave entitlement.

The changes will also ensure all employers affected by COVID-19 have the flexibility to allow workers to carry over leave at a time when granting annual leave could leave them short-staffed in some of Britain’s key industries.

COVID-19 – support grants and loans update

This week has seen a flurry of changes to the various government support schemes. We have summarised a few in this article.

Coronavirus Job Retention Scheme (CJRS)

The HMRC portal – where you formally register your claim – should be live as from 20 April 2020. HMRC have published a “user” guide to the claims process. In the general information about the scheme the guide says:

  • To be eligible for CJRS an employer must agree with the employee that they are a ‘furloughed worker’.
  • Employees must be notified that they have been furloughed.
  • Employees must be furloughed for a minimum of three weeks.
  • The employee cannot do any work for the employer that has furloughed them.
  • You can claim 80% of wages up to a maximum of £2,500 per month per furloughed employee.
  • A separate claim is needed for each PAYE scheme.
  • You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020.
  • An RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
  • You must have a UK bank account.

The Chancellor has also confirmed that due to the extension of the lock-down period for a further three weeks, claims can be extended to 30 June 2020.

Coronavirus Business Interruption Loan Schemes (CBILS)

A reminder that banks cannot ask for a personal guarantee if the loan is below £250,000.

For loans over £250,000, personal guarantees will be limited to 20% of any amount outstanding on the CBILS loan after any recoveries from business assets have been considered.

Having problems securing a loan from your bank?

Please call if you would like our help progressing loans with your bank.

Coronavirus – Business update

Coronavirus Job Retention Scheme (CJRS)

Employers will be relieved that the waiting is over, as of 5.30am this morning (20 April 2020), they can login to HMRC’s new portal and claim their CJRS rebate for the first pay periods. HMRC have promised that money will be in employers’ bank accounts within six working days of registering their claims.

And just in case you missed the announcement last week, the CJRS scheme has been extended for a further month – to the end of June 2020. Claims are therefore available for a potential four months, from 1 March 2020 to 30 June 2020.

Early indications seem to be mixed, but those who have managed to login to the portal have found the process fairly straight forward.

If you are encountering problems, there is an HMRC helpline. Apparently, 5000 HMRC staff will be manning the phone lines, but as there are many more businesses that are likely to be making claims expect holding delays if you need to call.

For those in need, the information you will need to make a claim is:

  1. The number of employees being furloughed
  2. The dates employees have been furloughed to and from
  3. Details of employees – the name and National Insurance Number of each furloughed employee
  4. Your employer PAYE scheme reference number
  5. Your Corporation Tax Unique Taxpayer Reference, Self-Assessment Unique Taxpayer Reference, or Company Registration Number as appropriate for your entity
  6. Your UK bank account details
  7. Your organisation’s registered name
  8. Your organisation’s address

You should make sure you have this information ready before you access the system to make a claim.

Also announced today:

Government Future Fund

The Future Fund will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.

These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.

The scheme will be delivered in partnership with the British Business Bank.

You are eligible If:

  • your business is based in the UK
  • your business can attract the equivalent match funding from third party private investors and institutions
  • your business has previously raised at least £250,000 in equity investment from third party investors in the last 5 years

The Future Fund will launch in May 2020. Further details about this scheme will be published in due course.

Safety first options for manufacturing and retail sectors

Both of these sectors require people to work in close proximity to each other. Government has issues broad guidelines to reduce the risks for workers from Coronavirus.

Manufacturing and processing businesses

Manufacturing plays an important role in the economy. It can continue if done in accordance with the social distancing guidelines wherever possible.

Where it is not possible to follow the social distancing guidelines in full in relation to a particular activity, you should consider whether that activity needs to continue for the business to continue to operate, and, if so, take all the mitigating actions possible to reduce the risk of transmission between staff.

If you decide the work should continue, staff should work side by side or facing away from each other rather than face-to-face if possible.

You should increase the frequency of cleaning procedures, pausing production in the day if necessary for cleaning staff to wipe down workstations with disinfectant.

You should assign staff to the same shift teams to limit social interaction.

You should not allow staff to congregate in break times; you should consider arrangements such as staggered break times so that staff can continue to practice social distancing when taking breaks.

You should communicate to all staff that they should wash their hands with soap and water for 20 seconds or more at the beginning and end of every break, when they arrive at work and before they leave. To help with this, you should consider adding additional pop-up handwashing stations or facilities, providing soap, water and/or hand sanitiser.

When entering and leaving, you should ensure your workforce stays 2 metres apart as much as possible. To protect your staff, you should remind colleagues daily to only come into work if they are well and no one in their household is self-isolating.

Retail

You run a retail outlet which, in line with the government advice on retail, remains open.

To protect staff and customers, you should manage entry into the store, only allowing a limited number of people into your store at any given time.

You should put up signage to ask customers with symptoms not to enter the store, and to remind both staff and customers to always keep 2 metres from other people, wherever possible.

You should regularly encourage staff to wash their hands with soap and water as often as possible and for 20 seconds every time.

If feasible, you should also put up plexiglass barriers at all points of regular interaction to further reduce the risk of infection for all parties involved, cleaning the barriers regularly. You should still advise staff to keep 2 metres apart as much as possible.

To protect your staff, you should remind colleagues daily to only come into work if they are well and no one in their household is self-isolating.

More Coronavirus tax support options

Apart from the main business and personal tax reliefs that have received publicity in the past few weeks, a number of supplementary support items have been introduced. We have highlighted two in this post.

 

Claiming Child Benefits for new-borns

General Register Offices are currently operating with reduced capacity and with government guidance to social distance and stay at home, new parents are advised not to visit them. However, they can still claim Child Benefit without having to register their child’s birth first to ensure that they do not miss out.

HMRC said:

“First time parents will need to fill in Child Benefit Claim form CH2 found online and send it to the Child Benefit Office. If they haven’t registered the birth because of COVID-19, they should add a note with their claim to let us know.”

If you already claim Child Benefit, you can complete the form or add your baby’s details over the phone on 0300 200 3100. You will need your National Insurance number or Child Benefit number.

Note, Child Benefit claims can be backdated by up to 3 months.

Child Benefit payments increased from 6 April to a weekly rate of £21.05 for the first child and £13.95 for each additional child. Child Benefit is paid into a parent’s bank account, usually every 4 weeks.

Only one person can claim Child Benefit for a child. For couples with one partner not working or paying National Insurance contributions (NICs), making the claim in their name will help protect their State Pension.

 

New HMRC tax helpline is now open for calls

Business owners and self-employed individuals who are struggling to pay their tax can now ring a new helpline. The service allows any business or self-employed individual who is concerned about paying their tax due to coronavirus to get practical help and advice. Up to 2,000 experienced call handlers are available to support businesses and individuals when needed.

 

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

  • agreeing an instalment arrangement
  • suspending debt collection proceedings
  • cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

The helpline number is 0800 024 1222 – and is an addition to other HMRC phone contact numbers. Opening hours are Monday to Friday 8am to 4pm. The helpline will not be available on Bank Holidays.