JULY E-NEWSLETTER 2020
As the majority of the UK economy hopefully begins the route to recovery as the lockdown continues to ease, team Harbour Key continues to answer client questions in relation to keeping their business going in these difficult times. We have continued to adapt and learn how to operate in the new “working norm” with, at any one time, 50% of the team back in the office, adopting Covid19 safe working practices. The other 50% continue to work from home.
Due to the number of announcements and changes in respect of Government’s Covid-19 support, for example the end of the automatic VAT deferment, further guidance on the Job Retention Scheme (aka furlough scheme) #2 and more, we posted a Business Forward Covid-19 update last week and if you missed it, you can find HERE.
The big Government announcement this week, was The Chancellor’s Summer Statement – A Plan for Jobs Speech
The objective of the announcements/measures is to support jobs, create jobs and protect jobs. Some of the measures or highlights were announced pre speech, such as the cut in stamp duty to boost the residential property market and the temporary VAT cut for the tourism and leisure sectors. Others were new, such as the Job Retention Bonus (£1,000 per employee) and The Chancellor’s, Eat Out to Help Out” scheme.
A summary of the Summer Statement announcements can be found HERE.
Sale of residential property
We have reported previously, that capital gains tax due from the disposal of a UK residential property that is not a principal private residence, must be reported to HMRC and paid within 30 calendar days of completing the property sale or transfer. This means you need to have both the information and funds available to settle the tax liability at a much earlier stage. The change may have been missed, as property sales were suspended following the lockdown until mid-May when the change took place, and we had a number of clients ask for assistance with the reporting in late June, as property sales got moving again.
Non-UK residents must continue to report sales or disposals of interests in UK residential or commercial property or land, regardless of whether there is a tax liability, within 30 days of completion of the disposal. However, there will no longer be the option to defer payment of tax via a Self-Assessment return and any tax owed must be paid within 30 days.
What if you miss the deadline? HMRC have confirmed that they will not issue late filing penalties for returns and payments made in relation to the disposal of a UK residential property by a UK resident up to and including 31 July 2020. Any transactions completed from 1 July 2020 onwards will receive a late filing penalty if they are not reported within 30 calendar days. Interest will also accrue if the tax remains unpaid after 30 days.
Changes to Company Filing Dates. Some of you may have checked your company record at Companies House and noticed that accounts and confirmation statements filing dates may have been moved. It certainly confused us, until a few days later when it was announced that The Companies etc. (Filing Requirements) (Temporary Modifications) Regulations 2020 became law on 27 June. The new regulations introduced measures aimed to relieve the burden on companies during the Covid-19 pandemic to enable them to focus all their efforts on continuing to operate, by extending filing deadlines automatically. Although this looks like a benefit, we have already had clients who have encountered issues with the late filing, for example credit ratings for suppliers and lending. In addition, there is no postponement of corporation tax payments, which are still due nine months after the year-end.
As with VAT payments, from 30th June there is no automatic deferment of corporation tax payments, a time to pay arrangement (as would be required before the pandemic) needs to be sought.
All our updates on both Government support schemes, together with links, as well as non-Government support can be found HERE.
- Innovate UK has launched a number of competitions, including the Sustainable Innovation Fund. More details can be found HERE.
- The Government has announced a new fund to support English tourism businesses who can apply for a grant of up to £5,000. Small businesses in tourist destinations can access grants of between £1,000 and £5,000 to adapt their businesses to deal with the impact of Covid-19. The grant can be spent on areas such as paying for specialist professional business advice, adopting new technology and purchasing new equipment. More details can be found HERE.
- Self Employed Income Support Scheme (SEISS) – A reminder for those self-employed eligible for SEISS, you need to claim the first grant on or before 13 July 2020, before the scheme closes. The SEISS has been extended. A second and final grant will be available when the scheme opens again in August 2020.
We know that this is a very difficult time for all businesses and some difficult decisions are having to be made. We have spoken to many of you and for those we have not, we would like you to know that we are here ready to help if you need us to provide advice, deal with queries, or just be a business sounding board.