This update is written and posted on 25th March 2020 and is likely to quickly become out of date. We will continue to endeavour to update information as it becomes available.
Previous updates and other useful information can be found at our WEBSITE.
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As we keep saying, matters/advice are changing daily and there has been one important change in respect of the VAT deferment measure we have been reporting.
HMRC has updated its guidance advising those who wish to take advantage of the deferment to cancel your direct debit.
“Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time, so that HMRC do not attempt to automatically collect on receipt of your VAT return.”
HMRC have also confirmed that this VAT payment holiday only applies to UK businesses, not overseas businesses with UK VAT registrations, who will have to pay as normal.
Businesses who wish to take up HMRC’s offer to defer their VAT payment due between 20 March and 30 June 2020 and normally pay their VAT by direct debit (DD) are advised to cancel their DD with their bank. Otherwise HMRC may automatically attempt to collect the payment on receipt of the VAT Return and it will take a period to seek a repayment.
When the DD is cancelled it is likely businesses will receive a message from HMRC confirming the cancellation and advising them to ensure they have an alternative method of making payment. This is a standard message and can be disregarded at this time. DD’s can be re-instated later; however, future VAT Return payments can be paid by bank transfer. We would advise you not to re-instate your DD and pay by bank transfer for the time being if taking advantage of the deferment.
It is anticipated that HMRC’s systems will still automatically issue default surcharge and penalty notices (as appropriate depending on the VAT history of the business) but all indications are that these will be waived by HMRC although this has not been explicitly stated at this time.
For the avoidance of doubt, businesses are still required to submit their VAT Returns by the due date, it is only the payment of the VAT liability declared on the Return that can be deferred.
Job Retention Scheme
We are getting loads of queries regarding the Job Retention Scheme (the Government paying 80% of an employee’s wage), does it apply to their business, this type of employee etc.
The first point to make is the scheme is not going live until end of April based on the current information from HMRC, who are tasked with implementation. Until this time, businesses will have to pay staff while HMRC work up an IT system to compensate the business. The quote from HMRC is:
“HMRC is working night and day to get the scheme up and running and we expect the first grants to be paid within weeks – and we’re aiming to get it done before the end of April. Existing systems are not set up to facilitate payments to employers’”
HMRC has confirmed that ‘individuals will pay income tax and national insurance contributions (NICs) on any payments received through this scheme as they are replacement for income in line with normal practice for benefits or grants that replace income.
As part of devising and implementing a system, HMRC will provide more details on the scheme and its implementation in due course.
As ever with generous arrangements such as this scheme, which is being rushed in, several checks and balances are likely to be bypassed, and the rumours are circulating by unscrupulous employers on how to abuse the system. HMRC will introduce some measures to protect abuse and will reserve the right to retrospectively audit all aspects of the scheme with scope to claw back fraudulent or erroneous claims.
Business rate relief
The government has announced that the business rates relief initially introduced for the leisure, hospitality, retail and nursery sector, will be extended to estate agents, lettings agencies and bingo halls.
Company House Filing
Another change from a recent update, Companies House has stated that companies will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.
From today (25 March 2020), businesses will be able to apply for a 3-month extension for filing their accounts.
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. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.
However, for anyone applying for loans, for example the business interruption loan, for grant support or making an R&D tax credit claim, filed accounts will be required, so we would advise sticking to your usual timeline wherever possible.
- The spending limit for contactless card payments will be increased from £30 to £45, with a national rollout beginning from 1 April, in response to growing pressure to reduce the use of paper money during the current pandemic.
- The UK Government has today launched a GOV.UK Coronavirus Information service on WhatsApp, to help combat the spread of coronavirus misinformation in the UK, as well as helping ensure people stay home, protect the NHS and save lives. To set up and use, simply add 07860 064422 in your phone contacts and then message the word ‘hi’ in a WhatsApp message to get started.
- The Defence and Security Accelerator (DASA) is looking for rapid sanitising technology to speed up the time it takes to clean ambulances to help in the national effort against Coronavirus and save lives. (It can take up to 45 minutes to clean ambulances once they have transported a patient suspected of having COVID-19). DASA has today launched an innovation Focus Area as part of its Open Call for Innovation seeking industry’s help to identify rapid sanitising technology solutions. More details can be found at HERE
- Techforce19 has opened a new tech challenge to combat the effects of social isolation. £25k of funding available for digital solutions to help provide social care or mental health support during the crisis. More details can be found at HERE
As you know we act for clients all over the UK and in all business sectors, if you have any tips or advice, local to your area or sector, please let us know so that we can share with our clients.