April e-newsletter 2020

Our hearts and thoughts go out to everyone, business or individual, who has been or will be affected by the unprecedented event of the coronavirus.  We thank the healthcare workers, local communities, and others who are on the front line working to contain the virus.

As businesses and individuals adjust to new ways of living, operating and working, we decided on returning from the Easter break to no longer send out a daily business update.  Changes and updates to the Government support schemes are now less frequent. We are seeing and hearing about more businesses adjusting to the crisis. Whereas in the first two weeks many were going for a total lockdown approach, this position has now been re-considered and, where possible, safely and without breaking Government guidance or rules, some businesses are starting some level of trading – although not to the levels prior to Covid-19.

We will now send out a weekly update, and information will continue to be posted on our dedicated Covid-19 webpage 

At Harbour Key we are still fully operational, continue to support our clients at this difficult time including supporting loan applications (no failures yet, but no successes, they are waiting in a queue), grant applications, research & development tax relief claims, and just being on the end of the phone to deal with queries or just be someone to talk to.  We remain remote working, but have a system whereby post and deliveries received at the office can be dealt with.

We have added to our list of grants and funding opportunities arising from the Covid-19 crisis, which we will continue to do and so it is worth checking to see if anything is available for your business. 

The list can be found at HERE

Covid-19 Business Update:

  • Job Retention Scheme - The government issued yesterday (15 April) their Direction to HMRC regarding the Job Retention Scheme (“JRS”), which should be the definitive document setting out the rules of the Scheme. One big change in the scheme is the eligibility criteria for a furloughed employee – it changed from being on employer payroll at 28 February to 19 March.
In addition to the Government Direction, the head of HMRC, Jim Hara, in an interview confirmed the online system to make a claim under the JRS, will be ready for Monday 20th April.  The online system has had its first tests for claims and payments which took place earlier this week and were successful.  Mr Harra, stated that the cash would be paid within six days of the claim submission.
More information can be found at our update HERE
  • Self Employment Income Support Scheme - HMRC has published further guidance on how it will work out total income and trading profits for the income support scheme, designed to provide help for the self-employed and members of partnerships who have lost profits due to the Ccovid-19 crisis. The guidance can be found HERE   
  • Directors’ fiduciary duties, dividends & accounts – For some businesses, the impact of Covid-19 on reported results and results after the balance sheet date will have significant implications for decisions on dividends and “going concern”. The Companies Act 2006 requires that any dividend may only be paid out of distributable profits as shown in the company’s most recent relevant accounts.  Accordingly, irrespective of the level of surplus cash, a dividend cannot be paid without the existence of distributable profits.  In addition to which, consideration needs to be given as to whether a dividend is appropriate for the shareholders (a particular problem for those who remunerate themselves in the main via dividends), when there are likely to be outstanding creditors, potential for future difficult trading periods etc. Directors must therefore specifically consider whether the company will still be solvent following a proposed dividend.

In addition to dividends, a business’s status as a going concern will have to be considered.  Up to the date of the approval of the accounts, directors are required to make an assessment of the business’s ability to continue as a going concern which should cover a period of at least, but not limited to, twelve-months from that date. It the directors have concerns or are aware of material uncertainties related to events or conditions that cast significant doubt upon the business’s ability to continue as a going concern, the company is required to disclose those uncertainties. 

The team at Harbour Key will raise these points with our clients in preparing and discussing the final accounts. 
  • Tax Enquires - HMRC is writing to taxpayers who have open enquiries acknowledging that during the current lockdown they are being instructed not to request information or documents and not to press for responses to requests already made. Whilst this may seem to be welcome news, there may be good reasons to press ahead in dealing with the enquiry now if taxpayers or their businesses are already under enquiry, as many will need to focus on recovery once the Coronavirus crisis ends and HMRC’s  questions will inevitably distract attention from that. Note, however, that furloughed employees cannot be involved in responding to HMRC enquiries on behalf of their employers.

Happy? New Tax Year 

6 April was the start of the new tax year, which sees the introduction of new tax measures and the withdrawal of some reliefs, which we have summarised HERE 


PAYROLL, P11d & Employee Share & ATED reporting information, all of which have forthcoming deadlines which can be found HERE