Additional Covid-19 info
2 June 2020 Tax free child care during COVID-19
HMRC have updated their guidance on claiming tax-free childcare and 30 hours childcare during coronavirus (COVID-19) with information on what happens where the 31 March 2020 deadline has been missed.
1 June 2020 Self-employment grant extended
The self-employed income support scheme (SEISS) has been extended. A second and final grant will be available when the scheme opens again in August 2020.
The second grant will be a taxable grant worth 70% of average monthly trading profits, paid out in a single instalment covering a further three months’ worth of profits, and capped at £6,570 in total.
Eligible taxpayers who wish to claim the first grant must do so on or before 13 July 2020.
For further details on the extension of the scheme, see the HM Treasury release Chancellor extends Self-Employment Support Scheme and confirms furlough next steps.
View HMRC’s updated guidance on SEISS at https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.
For guidance on how to make claims, see Claim a grant through the Self-Employment Income Support Scheme.
30 May 2020 Health and Safety returning to the office
Government guidelines for making the office environment safe:
This is based on five safe working principles, to help businesses get up and running and British workers safely back to work during the coronavirus pandemic.
- Work from home, if you can. All reasonable steps should be taken by employers to help people work from home but for those who cannot work from home and whose workplace has not been told to close, the message is: go to work.
- Carry out a COVID-19 risk assessment, in consultation with workers or trade unions, to establish what guidelines to put in place. If possible, employers should publish the results of their risk assessments on their website and all businesses with over 50 employees are expected to do so.
- Maintain 2 metres social distancing, wherever possible, by redesigning workspaces: staggering start times, creating one-way walk-throughs, opening more entrances and exits, or changing seating layouts in break rooms.
- Where people cannot be 2m apart, manage transmission risk by putting barriers in shared spaces, creating shift patterns or ensuring colleagues are facing away from each other.
- Reinforcing cleaning processes: workplaces should be cleaned more frequently, paying close attention to high-contact objects like door handles and keyboards. Employers should provide handwashing facilities or hand sanitisers at entry and exit points.
Assessing the risks
At a time when most office workers are not currently in the workplace in Britain, the Government is clear that people should not be forced into an unsafe workplace.
It is therefore essential to plan for how to work safely during the COVID-19 pandemic, keeping as many people as possible 2m apart from those they do not live with.
In this new climate, employers must make sure that the risk assessment for the business addresses the risks of COVID-19, recognising it is not possible to completely eliminate the risk of the virus.
As always — and this is unchanged during the current crisis — employers have a duty to consult employees on health and safety. Involving staff in making decisions shows that you take their health and safety seriously. You could also consider any advice that has been produced specifically for your sector, eg by trade associations or trades unions.
If you are an employer with fewer than five workers, or are self-employed, you don’t have to write anything down as part of your risk assessment.
Controlling the risks
Employers have a duty to reduce the risks associated with COVID-19 to the lowest reasonably practicable level by taking preventative measures. This means the following.
- Businesses and workplaces should make every reasonable effort to enable working from home as a first option.
- Where working from home is not possible, workplaces should make every reasonable effort to comply with the social distancing guidelines set out by the Government (keeping people 2m apart wherever possible).
- Where the social distancing guidelines cannot be followed in full in relation to a particular activity, businesses should consider whether that activity needs to continue for the business to operate, and if so, take all the mitigating actions possible to reduce the risk of transmission between their staff.
- In every workplace, increasing the frequency of handwashing and surface cleaning is important. Further mitigating actions include:
- keeping the activity time involved as short as possible
- using screens or barriers to separate people from each other
- using back-to-back or side-to-side working (rather than face-to-face) whenever possible
- reducing the number of people each person has contact with by using “fixed teams or partnering” (so each person works with only a few others).
- Finally, if people must work face-to-face for a sustained period with more than a small group of fixed partners, then you will need to assess whether the activity can safely go ahead. No one is obliged to work in an unsafe work environment.
- In your assessment, you should have particular regard to whether the people doing the work are especially vulnerable to COVID-19. See Who should go to work? below.
Sharing the results of your risk assessment
As mentioned above, it is imperative to carry out an assessment of the risks posed by COVID-19 in your workplace as soon as possible. You should also share the results of the risk assessment with your workforce. If possible, consider publishing the results on your website (and all employers with over 50 workers must do this).
Employers should display this notice in the office to show they have followed Government guidance.
Who should go to work?
The key objective in this regard is that everyone should work from home, unless they cannot do so.
- Staff needed on site may, for example, include workers in roles critical for business and operational continuity, eg for safe facility management, or workers in critical roles which might be performed remotely but who are unable to work remotely due to home circumstances or the unavailability of safe enabling equipment.
- Employers will also need to take steps to protect clinically vulnerable and clinically extremely vulnerable workers. These groups include those with cancer, those aged 70 or over or with certain underlying health conditions as outlined in the Appendix to the latest guidance. Some of these people are strongly advised not to work outside the home whereas others may be offered the option of the safest available on-site roles enabling them to stay 2m away from others.
- Another group of office workers to consider is those who need to self-isolate because they have symptoms of COVID-19 or live in a household with someone who has symptoms. Here employers will need to enable staff to work from home while self-isolating if appropriate.
For those working from home, it will be important for employers to monitor their wellbeing and help them stay connected to the rest of the workforce, as well as provide equipment for them to work at home safely and effectively.
Further points about social distancing in the office
Social distancing of 2m wherever possible applies to all parts of a business, not just the place where people spend most of their time, but also entrances and exits, travelling between sites, break rooms, canteens and similar settings. These are often the most challenging areas to maintain social distancing.
Here the new guidance offers some practical tips including the following.
- Ensure handwashing on arrival.
- Use floor tape — eg in lifts and for workstation layouts — to help workers keep a 2m distance apart.
- Manage occupancy levels and stagger start and end times.
- Avoid hot desking and where this is not possible, such as in call centres, clean workstations and shared equipment between different occupants.
- Reduce transmission risks associated with face-to-face meeting by using remote working tools. Hold face-to-face meetings only when absolutely necessary and then use hand sanitiser, well ventilated rooms, avoid pen and equipment sharing and use floor signage or tape on tabletops to help office workers maintain social distancing.
- Encourage workers to bring their own food or provide packaged meals instead of fully opening staff canteens.
- In an emergency such as a fire or accident, people do not have to stay 2m apart if this would be unsafe, but those providing assistance should pay particular attention to sanitation and handwashing immediately after any incident.
- Office managers will also need to minimise the number of unnecessary visits to the office by customers, visitors and contractors.
- Cleaning and social distancing guidelines for toilets and washrooms will be important. Organisations could look at blocking sinks to ensure staff are kept apart when washing hands.
Cleaning the office
The aim is to make sure that any office that has been closed or partially operated is clean and ready to restart. The Government has published guidance on cleaning ordinary, non-healthcare workplaces.
The new guidance for offices emphasises the need for the following.
- An assessment for all sites, or parts of sites, that have been closed, before restarting work.
- New cleaning procedures, with frequent cleaning of work areas and equipment between uses, and providing hand sanitiser before restarting work.
- Signs and posters to build awareness of good handwashing techniques, the need to increase handwashing frequency, avoid touching your face and to cough or sneeze into a tissue which is binned safely, or into your arm if a tissue is not available.
- If you are cleaning the office after a known or suspected case of COVID-19, then you should refer to the specific guidance on this.
Face coverings — optional in offices
The Department of Health and Social Care recently updated its advice on face coverings, suggesting the public should consider using them in enclosed spaces, for example on public transport such as on trains, buses and metro systems, and in shops to help reduce the transmission of COVID-19.
However, the statement added that they do not need to be worn outdoors, while exercising or in workplaces such as offices and retail spaces.
It’s also important to note that face coverings are not the same as face masks such as surgical masks or respirators. Nor are face coverings the same as the personal protective equipment (PPE) used in industrial settings where dangerous dusts or sprays are present.
The public is being asked not to purchase surgical masks or respirators but leave these for healthcare workers working in environments where the risk is greatest.
Instead the public is encouraged to make face coverings at home, using scarves or other textile items that many will already own.
Therefore, the new guidance on working safely in offices emphasises that face coverings are optional in the office and are not required by law.
If staff do choose to wear a face covering, it is important to use these properly and wash hands before putting them on and taking them off.
Employers should support their workers in using face coverings safely if they choose to wear one. This means communicating the following information to employees.
- Wash your hands thoroughly with soap and water for 20 seconds or use hand sanitiser before putting a face covering on, and after removing it.
- When wearing a face covering, avoid touching your face or face covering, as you could contaminate them with germs from your hands.
- Change your face covering if it becomes damp or if you’ve touched it.
- Continue to wash your hands regularly.
- Change and wash your face covering daily.
- If the material is washable, wash in line with manufacturer’s instructions. If it’s not washable, dispose of it carefully in your usual waste.
- Practise social distancing wherever possible.
Some final points about working safely in offices
- Arrange work to reduce the number of contacts each employee has, eg where staff are split into teams or shift groups, fix these teams or shift groups so that where contact is unavoidable, this happens between the same people.
- Identify areas where people directly pass things to each other, eg office supplies, and use drop-off points or transfer zones instead.
- Avoid unnecessary work travel and keep people safe when they do need to travel between locations.
- Communicate: make sure all workers understand COVID-19-related safety procedures in the new style office working environment and keep them up to date with how measures are being implemented or updated.
- Maintain social distancing and avoid surface transmission when goods enter and leave the site.
The new guidance on offices, contact centres and other similar environments, recently published by the Department for Business, Energy and Industrial Strategy, will be updated over time — check for updates via this link.
13 May 2020 Self-employment grant launched
The Self employment grant claim system has now been launched by HMRC. We are assisting clients where they have been affected by the coronavirus outbreak in submitting their claim. We will need your NI number, UTR number and we will set up a Government Gateway account for you if you do not already have one. The claim cannot be made via our agent account with HMRC. HMRC benefit from this by engaging far more tax payers onto their digital tax platform. Call or email for assistance.
5 May 2020 - Self employment grant scheme to launch on 13 May 2020
HMRC has begun contacting around 3.5m taxpayers who may be eligible for the government’s self-employment income support scheme (SEISS), to explain the application process of making a claim when the service opens next week.
This will be launched on Wednesday 13 May, with payments reaching bank accounts by 25 May 2020, or six working days after the claim is made.
An online checker is now available which will let taxpayers check their eligibility, as well as give them an application date. Individuals will need their unique taxpayer reference (UTR) and National Insurance number and that these match their government gateway account.
This is a temporary scheme that will enable those eligible to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits) in a single payment.
Taxpayers are eligible if their business has been adversely affected by coronavirus, they traded in 2019-20, intend to continue trading and they meet the following three criteria:
- Earning at least half of their income through self-employment;
- Having trading profits of no more than £50,000 per year; and
- Trading in the tax year 2018 to 2019, having submitted their self assessment tax return on or before 23 April 2020 for that year.
HMRC is using information from 2018-19 tax returns, and returns for 2016-17 and 2017-18 to determine their eligibility and is contacting customers who may be eligible via email, text or letter.
Where individuals are ineligible for the scheme, HMRC will direct them to guidance setting out the conditions to help them understand why they are ineligible, and advice about other support that might be available to them, such as income tax deferrals, rental support, Universal Credit, access to mortgage holidays and the various business support schemes the government has introduced to protect businesses during this time.
HMRC warns it expects support phone lines to be very busy over the next few weeks as people enter this new scheme, so is encouraging taxpayers to only call if they cannot find what they need on GOV.UK, from their tax agent or via HMRC’s webchat service.
4 May 2020 Bounce back loan announced
|The Chancellor has announced a 100% government backed loan scheme for small businesses, designed to offer up to £50,000 of fast-track finance for those affected by coronavirus. Interest free for 12 months and cash will be available within days or even 24 hours. For more details https://www.gov.uk/government/news/new-bounce-back-loans-to-launch-today and https://www.accountancydaily.co/covid-19-ps50k-bounce-back-loans-small-businesses|
20 April 2020 - We are registering and starting the furlough claims for clients, reimbursement from HMRC under the Job Retention Scheme will arrive 6 days after the claim is made.
Child benefit - make sure you are registered or re-registered
If you are one of the many tax payers who cancelled your child benefit income you may now be entitled to it during this lockdown period or longer depending on how quickly you resume earning the higher income threshold of £50k.
Defer your VAT and corporation tax payments
VAT and corporation tax payments can be deferred until January 2021, make sure you maintain submissions within the normal due dates.
SSP reclaim for directors - the interaction with auto-enrolment duties
If you are a director and consider re-claiming SSP for yourself you may inadvertently create an implied employment contract which then brings you within auto-enrolment obligations.
Self-employment Income Support Scheme
On Thursday 26 March the government announced their intention to provide further support for the self-employed in the form of a taxable cash grant.
The scheme allows individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the 3 months from March to May 2020. This may be extended if needed.
The taxable cash grant will be in the form of a single lump sum to cover the three months from March to May 2020. It will be paid in June 2020 to those that are eligible directly into their bank account.
The self-employed including members of Partnerships will be eligible if their trading profits for 18/19 were less than £50,000 and more than 50% of their income stems from self-employment.
Alternatively, they will be eligible if their average trading profits for the tax years 16/17, 17/18 and 18/19 were less than £50,000 and more than 50% of their income stems from self-employment. For those that started trading between 2016-19 HMRC will only use those years for which a Self-Assessment tax return has been filed.
The scheme will be open to those that have submitted an income tax self-assessment tax return for the year to 5 April 2019 (the 18/19 tax year). Worth noting that HMRC’s guidance does state that the 18/19 tax return must be filed by 23 April 2020 in order to eligible. For those that have yet to file their 18/19 tax return, it represents something of an opportunity to bring your affairs up to date and record your earnings for that year as well as qualify for the relief if all other conditions are met.
Additional eligibility criteria include the requirement that the individual must have lost trading profits due to Covid-19 and they must have traded in 2019/2020, intend to trade in 2020/2021 and are trading at the point of application or would have been except for Covid-19.
Individuals that claim Tax Credits would need to include the grant as part of their income.
It is crucial to observe that HMRC will contact and invite those that are eligible to apply. Applications will need to be made online when the invitations have been issued by HMRC.
Individuals do not need to contact HMRC now.
This seems an opportune moment to remind readers that HMRC does not send texts or make calls asking for bank or credit card details. If this happens then it is likely to be a scam. Please be wary.
We will update this guidance as and when HMRC issue further guidance of their own.
Nominating your primary residence
We have a client who currently has an interest in two residential properties. He lives in one as his main residence and the other was bought as a second home just for weekends. As he has two properties available to him (neither let out to tenants) he consider making a private residence nomination. There are time limits for doing this.
You may only obtain capital gains tax relief on one main residence at any one given time. If you own more than one main residence consider the tax position. You can notify HMRC within two years after purchasing your second home which of the two properties is to be your main home and exempt from capital gains tax when you sell it.
A home must have been physically occupied in order to qualify for relief. Intending to occupy the property does not qualify for tax relief. For our client there will be occupation of both properties, the main home, and the holiday home.
A good tip to make a note of, each time there is a change in your combination of residences a new period begins and there is a fresh opportunity to make a nomination or vary an earlier one and this can be backdated up to two years.
Where time has run out be careful when making a claim that a particular property is to be the actual main residence. Documentary evidence such as correspondence address, where council tax is paid, electoral register etc are all typical factors that are considered.
The two-year time limit may be waived in certain circumstances for dual residences. For example when the market value of either one of the properties is negligible and you were unaware that a nomination could be made. The nomination, when finally made (it still ahs to be within a 'reasonable' time) will be backdated to the date when the second property came into your ownership.
If you have made no nomination to date remember that when the combination of available properties changes you can made a new nomination and backdate it, this includes a previously let property becoming available to you as a second home at the end of a tenancy.
Capital gains tax case
Which value is to be used as the base cost when calculating the capital gains tax when the client sells the late parents home? Is it;
a) the value of the part inherited share 10 years ago when her father died ? Leaving a quarter share to her in a will trust or
b) the value when her mother died, inheriting the other 25%. There was a second beneficiary in the terms of the will and factors affecting rights to inhabit the property.
Would the values be apportioned or split some other way? Would she have to pay capital gains tax for the 10 years that her mother remained living in the house?
In the detail of this case the client only gained absolute entitlement to her share of the property after the death of her mother and so the later date is used for the valuation hence a smaller taxable gain arises.
Tax relief on Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS)
Significant tax relief can be achieved through these investments. It is also possible to carry an investment back to the previous tax year to utilise the available tax relief where there is insufficient tax to relieve in the year of investment.
The tax relief, when the criteria is met such as investing for three years and gaining a certificate from HMRC, is 30% of the amount invested for EIS and 50% for SEIS. If you have invested in these we will claim the tax relief for you.
There is more information on the EIS page on the HMRC website
Protect your assets in a Discretionary trust
If you are thinking about giving something to your children to help them onto the property ladder a discretionary trust protects the asset when compared to giving it to them outright. It also starts the seven year clock ticking when at the end of the seven year period the asset will then no longer form part of your estate, on a sliding scale over the seven year period.
The trust must be registered with HMRC and will need to prepare it's own tax return each year. There are different tax rules and rates for trusts so careful planning is required before deciding to put an asset into a trust. There are inheritance tax obligations on entry to a trust and 10 yearly charges if the asset is worth in excess of the current inheritance tax free band of £325,000.
However if you want to protect an asset's ownership and/or start the process of reducing the value of your estate for inheritance tax purposes this may be a valid consideration.
The latest scam to hit taxpayers is a call to mobile phone numbers from fraudsters posing as HMRC officials requesting immediate payment of £500 in so-called phishing attacks.
Taxpayers are being told that the tax bill relates to unresolved tax issues dating back 10 years and the fraudsters ask for immediate payment by credit card. However, HMRC does not even accept credit card payments anymore so anyone being told to pay by credit card should immediately be on alert and notify HMRC of the scam.
It appears that the company has accessed old mailing addresses and frequently cites the wrong postcode when the taxpayer asks where the information has come from.
Are you a non UK resident with property in the UK?
Non UK residents are only subject to UK tax on the sale of residential April 2015. They are subject to non resident capital gains tax (NRCGT) and there are three main differences from CGT:
Only the gain arising since April 2015 is chargeable. If the property is held in a non UK company, the company rate of NRCGT is 20% and therefore greater than the current rate of corporation tax. A non resident capital gains tax return must be filed within 30 days of the sale. The tax must also be paid by this date unless a self assessment will be filed in which case the due date is the usual tax return filing deadline.
Bear in mind that, if an individual sells a property during a period of non UK residence which lasts less than five years, any pre April 2015 gain will become chargeable on their return to the UK.
Flat rate VAT scheme
Limited cost traders from 1 April 2017 Under the new rules, businesses in the scheme which have a low cost base,referred to as ‘limited cost traders’, will see the VAT rate increase. Limited cost traders include consultants, IT contractors, journalists, entertainers,hairdressers, beauticians, construction (labour only), accountants ,lawyers,architects, surveyors. This list is not exhaustive, it includes any business on the flat rate scheme that does not purchase physical goods totalling more than 2% of vat inclusive sales.
Software does not count as a physical good. A business is considered a limited cost trader when VAT inclusive expenditure on goods is either:
Less than 2% of their VAT inclusive turnover in an accounting period;
or greater than 2% of their VAT inclusive turnover, but less than £1,000 per annum, if the prescribed accounting period is not one year, the figure is the relevant proportion of £1,000).
When working out the amount spent on goods, it cannot include purchases of:
Capital goods, food, drink, vehicles or parts for vehicles.
This is assessed and reported on a quarter-by-quarter basis removing the original simplicity of the flat rate scheme. Rate rise The VAT flat rate percentage for low cost traders will increase to 16.5%.
The benefits of remaining within the flat rate scheme, for many traders, are completely wiped out by these changes and some small businesses are likely to be caught out by the additional reporting requirements. Others businesses under the VAT threshold may even find that without the benefit of the flat rate scheme, they no longer have a need to be VAT registered.
Tax free childcare
A useful article for all working parents paying for childcare:
From 24 November 2017 the childcare scheme covering 30 hours free childcare a week and the tax-free childcare option for qualified parents is available to parents whose youngest child is under six or who has their sixth birthday on that day. Parents can apply online through the childcare service which can be accessed via the childcare choices website.
In April this year, HMRC started rolling out the childcare service. Since then more than 275,000 parents have an open childcare account. Of these, more than 216,000 parents received an eligibility code for 30 hours free childcare for September.
However, HMRC acknowledges that while the majority of parents used the childcare service without significant problems, over the summer some parents did not receive the intended level of service when using the website. HMRC says it has now made significant improvements.
Over the coming months, HMRC will gradually open the childcare service to parents of older children, while continuing to make further improvements to the system.
HMRC says this is so it can manage the volume of applications going through the service, ensuring parents continue to receive a better experience and prompt eligibility responses when they apply – almost all parents receive a response within five working days, and most get their decision instantly. All eligible parents will be able to apply by the end of March 2018.
The scheme was originally meant to start on 28 April, for parents of the youngest children with all parents being able to join by the end of 2017.
The Childcare Choices website is here
Source: by Pat Sweet, tax reporter.
July 2019 Kamil Kacprzak has passed his latest set of ACCA exams.
Silviya Syulevska passed her penultimate ACCA exams and is now studying for the ACCA finals.