By Emma Hooper

Once again the rules regarding furlough and how to support your employees have been updated – are you aware of the latest guidance?

On 5 November 2020 the chancellor announced that the original Job Retention Scheme will be extended until March 2021, meaning that employees who have been placed on furlough will be able to receive up to 80% of their normal wages (up to a cap of £2,500 per month).

This latest announcement is intended to protect employment and job security over the winter months. The rules will be similar to those that were in place in August 2020, where the government will pay 80% of unworked hours, with the employer only needing to pay the ER NI and pension contributions.

As part of the scheme, anyone who has been made redundant since 23 September may be rehired and put back on furlough.

If you have any questions regarding the scheme please contact our team who will be more than happy to help by emailing payroll@frostwiltshire.co.uk

By Mel Hackney

This year could be more important than ever to know what liabilities you may face in January, with many businesses and individuals facing cash flow issues due to Covid.

HMRC announced in March 2020 that they would waive interest on the taxpayer delaying their second payment on account towards 2020/21 tax year from the usual due date on 31 July 2020 to 31 January 2021.

However, this delay means that taxpayers may need to make a significant payment to HMRC by 31 January 2021, which means finding out the final 2019/20 liability through the prompt completion of self-assessment is key this year.  

If the taxpayer is unable to make the full payment due on 31 January 2021, they should consider a time to pay arrangement with HMRC.

In September 2020 it was announced that, if the taxpayer is unable to make the full payment due on 31 January 2021, they can consider a time to pay arrangement. This is applied for through one of two ways, depending on the level of outstanding liability.

Self-assessment taxpayers who have a payment to make in January of up to £30,000 can use a self-service facility in order to agree a plan with HMRC to spread their payment over 12 months, where as those with liabilities of more than £30,000 can also access time to pay to spread their payments, but they must contact the time to pay helpline to do so.

If you have not completed your personal tax return yet, get in touch and we can help.

By Emma Hooper

The Job Retention Scheme (JRS) is coming to an end on 31 October and will be replaced with a new wage subsidy scheme called the Job Support Scheme (JSS). The JSS will begin on 1 November 2020 and will run for 6 months, aiming to support employees and businesses by topping up salaries where returning to work full-time is still not viable.

The JSS is completely independent of the JRS, meaning neither the employee nor employer needs to have previously used the JRS to be able to make a claim through the JSS.

Who is eligible?

All small and medium sized businesses are eligible, as well as larger businesses who can prove revenue has been negatively impacted by COVID-19.

Employees must be able to work at least one-third of their normal hours to be eligible.

What financial support is available?

For the unworked hours, the government and employer will each be responsible for paying one-third of the employee’s remaining wages. This means the employee will receive at least 77% of their normal pay.

The contribution payable by the JSS will have a monthly cap of £697.92.

Employer’s NIC and pension payments will not be covered by the JSS and will be payable by the employer.

An example

If an employee who usually earns £1,000 a month has only worked 50% of their normal hours, their normal pay will be reduced to £500. The government will then pay one-third of the unworked hours, being £166.67, and the employer will pay the same. The total amount the employee will therefore receive will be £833.34.

If you have any questions about the JSS or would like us to process claims on your behalf, please let us know, as this is a service we provide.

By Mel Hackney

In the past, whenever a client has posed the question “….and how about a company car?” (usually with a hopeful glint in their eye), I have always been pretty quick to quash their dream of a sparkling new Jaguar, paid for by their company, being a brilliant, tax efficient benefit of business ownership.

Up until now.

From 6 April 2020, the taxable benefit of an electric company car is going down to nil.  This means that a director (or employee) of a company can use an electric car owned by the business with no personal tax liability arising.  In addition, the company will suffer no Class 1A National Insurance on the benefit either.  Although this is set to rise very slightly from 2021, compared to previously this is potentially an extremely tax efficient way of remunerating employees or owners.

Not only does the employee have the unrestricted use of a car with no income tax or national insurance arising, the company also gets a corporation tax deduction in the year of purchase.  If the car is new, the full cost can be deducted from profit when working out corporation tax.  So, for example, if the company buys a car for £40,000, the corporation tax saved in the year of purchase would be £7,600.  Currently, this tax saving is only available until April 2021.  But it’s possible that this will be extended into future years.

The array of electric cars available, such as the Jaguar I-PACE, is increasing all the time.  But if a fully electric car is unavailable, or unsuitable for your needs, the tax rules for ultra-low emissions cars with CO2 emissions of less than 75g/km are still pretty attractive.

So perhaps the time has come to splash out on that new Jaguar.  And with the blessing of your accountant too.  How times have changed.

If this might be of interest to you, please get in touch – we’d be happy to discuss the options with you.

By Emma Hooper

The Government has announced a temporary change to VAT payments as a way to help businesses manage cash flow during this difficult time. Any VAT liabilities becoming due between 20 March 2020 and 30 June 2020 can now be deferred, with payment needing to be settled on or before 31 March 2021.

As of now (3 April 2020) any VAT payments becoming due after 30 June 2020 will be payable as normal. But as things are constantly changing and uncertainty over the COVID-19 situation continues, these measures may be extended in the future.

It’s important to remember that whilst the VAT payments can be deferred, the return still needs to be submitted on time to avoid any late filing penalties.

If you’d like to take advantage of the VAT deferral and you currently pay by Direct Debit you will need to contact your bank and get this cancelled, otherwise the payment will be automatically taken.

If you have any questions around the deferral of VAT payments please contact emma.h@frostwiltshire.co.uk

In these uncertain times, we want to reassure you that Frost Wiltshire remains open for business and available to help you.

As a paperless business with robust IT arrangements for remote working, we are confident that we can continue to provide an excellent service to our clients, with minimal disruption as all members of the team work from home for the foreseeable future.  Telephone calls to the office will be diverted to us, emails will be answered as usual and, where appropriate, we will conduct meetings normally done face-to-face via Zoom.

We do ask that you do not visit or send any paperwork to our office for the foreseeable future.

We recognise this is an extremely difficult period, so please do not hesitate to get in touch if you have any questions regarding your business or finances.

To help businesses navigate the coming months, we are developing a simple-to-use short-term cash flow forecasting tool which will be available soon; if this may be of interest to you, please get in touch and we can provide more details.

In the meantime, please find below a summary of the latest information (as of 1 April 2020) provided by the government and HMRC, which may be of relevance and assistance to you.

Whilst we may not be able to advise on some of these areas (particularly those not directly related to your accounts or tax compliance affairs), we will do our best to support and guide you, and will continue to update our website with latest news.

What are the latest government support offerings for business?

These include:

• Government grants to cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. Find out more information about this here.

• Government grants to cover 80% of self-employed income up to a level of £2,500 per month for a three month period. Find out more about this here.

• In very specific circumstances, it is possible that an extension to statutory accounts filing deadlines will be available if this is anticipated due to ill health. If you believe this applies, please contact us for more details. Please note that, as yet, there are no extensions to filing deadlines of statutory accounts due to other circumstances outside of this.

• HMRC Time to Pay scheme which may enable businesses and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. Find more about this here.

• Self-assessment tax payments on account due on 31 July 2020 have been deferred to 31 January 2021. Find out more about this here.

• VAT payment deadlines have been deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020/21 tax year to settle any liabilities that have accumulated during the deferral period. Find out more about this here.

• Small and medium sized business will be able to reclaim statutory sick pay (‘SSP’) for absence due to COVID-19. For businesses with fewer than 250 employees, the cost of providing 14 days of SSP per employee will be refunded by the government in full. More information on this can be found here.

• For businesses in retail, hospitality and leisure, business rates will be waived for 12 months for 2020/21. More information can be found here.

• Grants to small businesses eligible for Small Business Rate Relief will be increased from £3,000 to £10,000. Please see more information here.

• Further £25,000 grants for retail, hospitality, and leisure businesses operating from smaller business premises defined as those within a rateable value between £15,000 and £51,000. Please see here for more details.

• The Coronavirus Business Interruption Loan Scheme expanded from £1.2m to £5.0m with an interest waiver for first 6 months. As well as loans, there are many other types of finance supported by the programme, depending on the provider and will offer more attractive terms for both businesses applying for new facilities and lenders. For further details on this, please follow the links here and here.

• A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans. More details can be found here.

• Potential availability of insurance claims for businesses advised to close are available; please see here.

If you have any questions, please do not hesitate to contact one of the team.  Our email address is hello@frostwiltshire.co.uk and our telephone number is 01454 529529.

We wish you, your families and your businesses the best of luck and health in these challenging times.

By Mel Hackney

Entrepreneurs’ relief (ER) is a relief applied to the sale of certain business assets or shares under qualifying circumstances. The relief is generous; any taxable gain generated is taxed at 10% rather than 18% or 28%. A common example of when this may arise is when closing a company down and extracting funds.

There has been much in the press over the past few weeks about ER being at risk in the upcoming budget, and whether it might be restricted or even abolished altogether.

At this point in time, the implementation options appear to be:

1. The Chancellor will make his Budget speech on the 11 March and it is possible that he will announce immediate changes to ER;

2. The new tax year begins on 6 April, and it is probably more likely that if there is a Budget announcement that it will be effective on disposals after 6 April, (although there might be a provision that also captures transactions from 11 March that have been artificially constructed as an anti-avoidance move)

3. There are no immediate changes, and any change is implemented from a later date following a consultation process (such as Royal Assent for the Finance Act 2020, or 6 April 2021).

As such, until 11 March there is little which we can ascertain. Alternatively, the Government may simply announce a review or consultation process. If you believe that the potential new measures may affect you and would like further information or advice, please do not hesitate to contact us.

By Emma Hooper

The government has announced minimum pay rises in April 2020, with the National Living Wage increasing by 6.2% in comparison to 2018/19.

For a full time worker aged 25 or over who currently receives the National Living Wage, this would amount to a pay rise of £930 over the year.

If you have employees who are currently on the minimum pay for their age bracket, you’ll need to ensure you comply with the new rates when processing the April 2020 payroll. If we process your payroll for you, do not fear – we will inform you of any employees that may be impacted by the above to ensure your payroll is processed correctly.

If you have any questions regarding pay for employees or how this may impact your business, please get in touch on 01454 529 529.

The boxes are unpacked, the painting is done, and the Christmas tree is up! We have moved into our new office and are loving the change of scenery. Whilst there were a few hurdles to overcome (a meeting room without any walls for a few weeks made for an interesting challenge), overall everything has gone smoothly and to plan, and we are now adding the final touches.

If you haven’t seen the new office yet or missed our previous article, we have moved from the High Street in Chipping Sodbury to a beautiful converted barn on a small business park in a lovely area called Latteridge. Still only under 20 minutes from the M4, it’s an incredibly peaceful and tranquil environment. With lots of parking, we hope that this is not only a nicer setting for client meetings, but also more convenient. We are also lucky enough to be surrounded by lots of lovely country pubs, which we are gradually trying out for team lunches!

We look forward to welcoming as many of our clients and contacts as possible here, to enjoy our new environment!

By Mel Hackney

The deadline for filing your 2018.19 self-assessment tax return is 31 January 2020. If you haven’t got round to completing it yet, or are concerned about a large liability – don’t worry! You are not alone, and we might be able to help. We might even be able to reduce your liability with some tax planning suggestions.

Also, don’t forget that even if you do not need to complete a tax return, if you have allowable employment expenses you may be entitled to a refund of tax! For example, if you drive business mileage as part of your job, and your employer pays you less than the allowable amount (45p for the first 10,000 miles and 25p thereafter) you can claim the difference as a deduction against your taxable income, saving tax at up to 45%.

If you would like to have a chat, please don’t hesitate to call us and we can go through what you need and how we can take away that burden hanging over you.