HK BUSINESS FORWARD UPDATE - 29 APRIL 2021
This update is written and posted on 29 April 2021 and is likely to quickly become out of date. We will endeavour to update information as it becomes available.
Previous updates and other useful information can be found at our WEBSITE.
As the roadmap to opening up continues, which is seeing more businesses open up, and more individuals returning to work, a monthly survey of independent economists by the Treasury suggests that growth this year could be as high as 5.7%, up from the 4.7% predicted in March. Investment is expected to rise 7.4%, with unemployment expected to peak at 6.2%.
The IHS Markit's purchasing managers' index (PMI), shows that the private sector activity grew at the fastest rate since November 2013 in April, hitting a reading of 60. Both the service sector and manufacturing output are up. The report shows that there is a surge in demand for both goods and services as the economy opens up from lockdowns following the vaccine rollout.
Good news all round, but we still need to be wary of the virus and follow the government guidance, as we are seeing rapid spread in other areas of the world.
Government Covid-19 support schemes continue to be available and an updated summary can be found in our March update, following the March Budget, which includes new measures such as the restart grants and business recovery loan.
SELF-EMPLOYED INCOME SUPPORT SCHEME ("SEISS")
The fourth SEISS grant application process went live last week. This covers the period from 1 February 2021 to 30 April 2021, paying 80% of average trading profits for three months, up to a cap of £7,500. Details regarding the eligibility criteria for the grant and making a claim, which can only be made via your Government Gateway account, can be found at HERE.
Eligibility for the fourth grant is wider than the earlier SEISS grants but claimants must have submitted a 2019-20 tax return by 2 March to be eligible, which means people who were newly self-employed can now apply for the grant. To be eligible, trading profits must be less than £50,000, and equal or exceed your non-trading income. The grant is taxable, and your trade must have been impacted by reduced demand due to Covid.
All claims must be made on or before 1 June 2021. Claims must be made by the individual and cannot be processed by your accountant.
Do not give your bank details for payment in reply to an email, text message or over the phone, this will be a scam, not HMRC.
HMRC SEISS CHECKS AND ENQUIRIES
We are starting to see HMRC checks and enquiries into earlier SEISS grant claims. HMRC is contacting the taxpayer direct either by letter, email or telephone, requesting details as to why the taxpayer believes they are entitled to the grant and requesting evidence. From our experience accountants/advisors are not being contacted on all occasions, so please let us know if you are contacted and make sure it is a genuine contact.
As far as we are aware we have only had a few clients entitled to the grant, but out of the few who were, two have been checked. This indicates to us the increasing level of checks and enquiries HMRC are going to undertake in respect of Government Covid support (SEISS, furlough, grants etc), with the investment announced in the Budget regarding forming a Covid Crime Taskforce. Again, this emphasises the importance of our clients keeping records and evidence of eligibility to support claims and making us aware of what you have claimed so it can be reported correctly in your accounts and tax returns.
To minimise the risk of an adverse decision or prolonged compliance check, please make sure you have your supporting documents and workings in place for any Government support you have received.
IMPACT OF COVID SUPPORT ON CERTAIN TAX RELIEFS
HEALTH AND SAFETY EXECUTIVE
SQUARE MILE BUSINESS RECOVERY FUND
The London based City Corporation has created a new Covid Business Recovery Fund for Square Mile based businesses, which meet the qualifying conditions. Details can be found HERE.
In these difficult times, scammers and fraudsters will continue to try and exploit the coronavirus pandemic as an opportunity for financial crime, so please be vigilant. For example, HMRC will never request your bank details by phone, email or text. There is expected to be an increase in criminal activity as individuals rush to complete house purchases to beat the 30 June stamp duty holiday. Guard your identity, check post, never make any payments to anyone who rings you, confirm who you are making payments to, check details before giving details or transferring money. A fraud protection checklist.
ASK FOR HELP
We know that this is a very difficult time for all businesses, with constant change and some difficult decisions having to be made. Should you wish to speak with us about a specific matter, or just to be a sounding board or for a chat, please do not hesitate to give us a call.
Please do not hesitate to give us a call -