From Thursday 5th November 2020 our offices will be closed for meetings and visitors. All onsite and offsite meetings on accounts, tax returns or any other matter will be conducted via telephone calls or Microsoft Teams video calls wherever possible.

However, you will be able to drop off any records or signed documents but this can only be done by prior arrangement and you will not be allowed inside the office at this time with drop off to be done at the door. If you would like tax return or accounting records collected please contact us and we will make suitable arrangements as best we can.

Our phones will be operational however please be aware that many of our employees will be working from home and as such we may need to take a message and return your call. If you are unable to get hold of anybody please leave a message on our answering machine and we will get back to you or send an email to the usual partner/manager who will get back in contact with you.

The main deadline that is still upon us is that self-assessment tax returns need to be filed by 31 January 2021, there are also numerous Companies House and Corporation Tax filing deadlines that still need to be met. Without any further indication regarding an extension to these we are very much still working to these deadlines!

If you haven’t already brought in your accounts or tax return information for these impending deadlines please can you ensure that this is done as soon as possible so that we are able to plan for what is likely to be a very busy January. If you have not brought in your information to us by 18^th December 2020 will not be able to guarantee they will be completed in time.

Please also be aware that all of our offices will be closed from Thursday 24^th December 2020 until Monday 4^th January 2021 for the Christmas period.

Below is an overview of the schemes as they presently stand, as you can appreciate these may change on a very quick basis and as such if you are unsure of any matter please contact your usual partner or manager.

Business Grants – Where businesses are required to close you may be eligible for a business grant the size of which will be dependent on the rateable value of your business premises.

• For properties under £15k this will be £1,334 (£667 per two weeks)
• For properties between £15k and £51k grants will be £2,000 (£1,000 per two weeks)
• For properties over £51k grants of £3,000 (£1,500 per two weeks)

In addition to this the local governments will have additional discretionary funds which they will be able to distribute as they see fit. We assume that these will be similar to the discretionary grants as earlier this year and will be applied for through your local councils website. Understandably these schemes are not yet operational but we will update our Facebook page with links as soon as we know where you can apply.

Coronavirus Job Retention Scheme (CJRS) Furlough – this scheme was due to end on 31 October 2020 but has now been reinstated to its original level of covering 80% of an employees wages until 31 March 2021 but employers will be liable for the Employers National insurance and Employers Pension Contributions. This will be flexible so that part furlough can be claimed where you have some hours for an employee but not perhaps their full time job.

The eligibility criteria has been updated so that employees who were on the employers payroll scheme as at 23:59 on 30 October 2020 will be eligible for the scheme, this should have picked up most of the new starters that employers may have had. It may also now include some directors who were on annual schemes at the last cut-off date and were therefore not eligible.

Coronavirus Job Retention Bonus (CJRB) – the bonus scheme will give £1,000 per employee (paid to the employer) for every employee that was put onto furlough during CJRS1 and has been retained as an employee by the business throughout the period to 31 January 2021. The employee will need to earn at least £520 a month on average for November 2020, December 2020 and January 2021. Employers will be able to claim the bonus from February 2021 once accurate RTI information from Payroll has been submitted to 31 January 2021.

We are presently unsure of how this will interact with the new furlough extension for November, December and January were the qualifying months.

Self-Employment Income Support Scheme (SEISS) – this scheme was extended previously but there has been a small change for the new Lockdown. The third iteration of the SEISS scheme came into effect from 1 November 2020 and will be based on two 3 month periods taking the claim period to 30 April 2021. Applications for this scheme will open on 30 November 2020.

This grant will be restricted to a maximum claim of 80% of 3 months average income to a cap of £7,500, this will be at least for the first quarter but subject to change. The same eligibility conditions apply for this scheme as they did the first and second, however each period can be considered in isolation, so for example if you did not claim in the first scheme that does not stop you claiming in the third scheme.

The key conditions are:

• You traded in the 2019/20 tax year
• More than 50% of your total income is derived from Self-Employment
• You intend to continue to trade in the 2020/21 tax year
• You carry on a trade which has been adversely affected by Coronavirus. Examples of this have been given by Gov. and mainly focus on whether your normal income levels have been reduced or have incurred additional costs, there is no amount that you have to have been affected by Covid – just that you have.
• Average trading profits less losses in the year must not exceed £50,000

VAT Reduction – from 15 July 2020 until 31 March 2021 (extended from 12 January 2021) the UK government cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafés and pubs (excluding alcohol). This VAT reduction also applies to all holiday accommodation in hotels, B&B’s, campsites and caravan sites as well as attractions like cinemas, theme parks and zoos.

If you are a business that uses the Flat Rate Scheme the %s have been amended to reflect this change, these can be found at https://www.gov.uk/vat-flat-rate-scheme.

Stamp Duty Land Tax (SDLT) – the threshold at which SDLT needs to be paid has been temporarily increased until 31 March 2021 from £125,000 to £500,000. This only affects the purchase of your main home and does not apply to multiple property purchases. For a purchase price of £300,000 this could save £5,000 in SDLT (assuming you were not already a first time buyer).

Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) – Applications for these loans are ongoing and are applied for through your bank, applications can be made on either scheme until 30 November 2020. The loan amounts depend on the turnover of your business and some affordability criteria, we can assist with the preparation of information to the bank should you require it.

The BBLS range from £2,000 to £50,000 (but restricted to 25% of turnover) and are interest and capital repayment free for the first 12 months, thereafter the interest is charged at a fixed 2.5% interest and can be spread over 10 years, you can also repay the loan early without paying a fee should you not require the full amount of funds borrowed. The government guarantees 100% of the loan. There are also now ‘Pay as you Grow’ options to allow more time and flexibility in the repayments. They also confirmed that credit ratings will be be affected for businesses who delay the BBLS repayment to 10 years.

CBILS loans are more complex in the application process but the same eligibility principles apply but with loans of up to £5m, the government guarantees 80% of the finance to the lender. These loans will also have the option of being extended for a period of up to 10 years (previously 5 years).

VAT Liability Deferment – for payments due between 20 March and 30 June 2020 there was the option to defer the payment of this VAT until 31 March 2021. This scheme has now ended but they have announced that the deferred payments can now be spread over an 11 month period in 2021-22, businesses will need to opt into the scheme and a new process will be put in place to do this likely through your HMRC online login.

If you are struggling to pay any of your current HMRC debts you can speak to the dedicated Coronavirus Time to Pay Service either through webchat or on 0800 024 1222 https://www.gov.uk/government/organisations/hm-revenue-customs/contact/coronavirus-covid-19-helpline.

Self-Assessment Payment on Account Deferral – if you were due to make a payment on account by 31 July 2020 for your 2019/20 tax year liability and haven’t done so it has been automatically deferred until 31 January 2021. The government will now give taxpayers more time to pay taxes due by 31 January 2021.

Tax payers with up to £30,000 of Self-Assessment liabilities will be able to use HMRC’s self service Time to Pay facility (access this through your personal HMRC login) to secure a plan to pay over an additional 12 month period. Any taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC the Time to Pay helpline to agree a payment plan.

As usual we will be posting updates on our Facebook page (https://www.facebook.com/darnellsaccountants) as we hear more about the details of the scheme changes.

If you have any queries on any of the schemes above, or any other matter, please contact your usual partner or manager.

Please all continue to stay safe.

The Partners

Darnells Chartered Accountants
Last updated: 6 November 2020