The Government’s Covid-19 roadmap to opening up continues to roll along with the 19th July being the key date signalling the scrapping of most of England's Covid rules and quarantine for arrivals from amber list countries.
Our offices at Midway House remain open as we continue to protect the team and avoid having to shut the office as a result of a positive test (the Delta variant has had a significant impact in Cheltenham), although we are keeping client meetings to essential only. However, we are all looking forward to a summer break!
The office is open during normal working hours should you need to drop off your paperwork at our door. We can arrange for safe cloud storage for sharing information, if you require this as an alternative to visiting the office.
The Finance Bill that was published on 11 March 2021 following the Spring Budget received Royal Assent on 10 June, bringing into law the measures announced by The Chancellor to get the UK economy going following the impact of the Covid-19 pandemic. One of the big “giveaway” announcements was the temporary 130% super tax deduction in respect of capital expenditure. The allowance is available until 31 March 2023 and represents an opportunity to generate tax relief which will help boost cashflow. Many of our clients have already taken advantage of the allowance and more information can be found in our capital allowances article.
GOVERNMENT HELP TO GROW SCHEME
Another Spring Budget announcement that went live in June is the Government’s Help to Grow Scheme. The scheme is open to small businesses to access a 12-week programme to support strategic skills with key modules covering financial management, innovation and digital adoption. 30,000 places will be available over 3 years. The programme is 90% subsidised by the Government – participants will be charged £750. More details can be found on the Government’s website.
DEFENSE AND SECURITY ACCELERATOR (DASA)
The DASA has launched the Defence Innovation Loan, a new competition with a pot of £10 million to lend for innovative defence solutions. Businesses can apply for a loan between £250,000 and £1.6 million with a market interest rate of 7.4% per annum. Innovate UK will be carrying out the credit evaluation and participants will enter into a loan agreement and security agreement with Innovate UK Loans Ltd. More details can be found HERE.
CANCELLATION OF VAT DIRECT DEBIT PAYMENTS
HMRC will be cancelling the direct debit mandates for businesses for whom they do not hold a valid email address. This is because of banking regulations which require HMRC to give advance notice when they are about to take a direct debit payment. The business will need to set up a new mandate through their business tax account (Government Gateway) or make alternative payment arrangements. Unfortunately, businesses will not know exactly when their record is going to be transferred, so they may need to check for the prompt in advance of more than one VAT return, to ensure that their direct debit payments continue uninterrupted. HMRC will be contacting businesses, but this cannot always be guaranteed. An example of the letter can be found at HERE.
CAPITAL GAINS TAX
The HMRC service for reporting and paying capital gains tax on UK residential property has been problematic since it was introduced in April 2020. Two new problems have emerged since the start of this tax year. The first problem is the challenge for taxpayers to be aware of the poorly publicised requirement to report and pay capital gains tax (CGT) on UK residential property within 30 days of completion. We are finding that clients are not aware of this reporting requirement, with solicitors not flagging the requirement and HK team being made aware of the disposal a long time after the 30-day reporting and payment deadline. HMRC charge late filing penalties in addition to the normal late payment interest at 2.6%. The penalties can be severe:
- up to 6 months late, you will get a penalty of £100;
- more than 6 months late, a further penalty of £300 or 5% of any tax due, whichever is greater;
- more than 12 months late, a further penalty of £300 or 5% of any tax due, whichever is greater.
Once we get over the lack of awareness, we are also finding some issues with the online reporting, one of which is the taxpayer not being able to offset overpaid CGT against an income tax liability, forcing them to pay twice and reclaim the CGT. Frustrating and more work for us and our clients, but something we are having to live with, while HMRC are being lobbied to fix the issue.
- Furlough Scheme - For claims from 1 July 2021 onwards, the Government’s contribution for furlough pay has reduced. Employees must continue to receive 80% of their minimum furlough pay, however, it will only be possible to claim the following amounts under the furlough scheme:
- 70% for July 2021; claims capped at £2,187.50; and
- 60% for August and September 2021; claims capped at £1,875 per month.
- Self Employed Income Support Scheme (SEISS)– The application process for the fifth SEIS grant will be open later this month. The grant can be claimed if your business profit will be impacted by Covid-19 between 1 May 2021 and 30 September 2021. The application process will depend on details of two years of turnover and losses. More details can be found HERE.
- Covid Crime - HMRC has carried out over 12,000 compliance interventions relating to the Covid-19 support schemes, looking into potential fraud and other non-compliance with the rules. HMRC reported formal compliance interventions related to the coronavirus job retention scheme, the self-employment income support scheme and eat out to help out scheme. The Treasury believe that 30% of Covid-19 support has been paid in error or claimed fraudulently, and they are looking to recover. To minimise the risk of an adverse decision or prolonged compliance check into any Covid-19 Government-backed support claimed, please make sure you have your supporting documents and workings in place, and any errors are rectified at the earliest opportunity.
Statutory demands and winding up petitions - Due to the extension of lockdown measures until 19 July, the Government has confirmed that restrictions on statutory demands and winding up petitions will remain for a further three months.
DATES FOR YOUR DIARY
- 31 July – Tax Credit Application Deadline.
- 31 July - Self Assessment Payment on Account Deadline.
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 - 01452 713277 or emailus now.