About Wheelers

 Wheelers - providing professional advice to businesses and individuals since 1941.

At Wheelers, we believe that you should expect more from your accountant.

Our services go further than the computation of your tax and the production of your accounts. We have our clients' best interests and long term good at heart - our goal is to become your trusted mentor and, if you run a business, your expert business partner.

If you would like a copy of our GDPR Policy please email jo.warren@wheelers.co.uk

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Latest update from Wheelers on COVID – 19 support - 30 March 2020

Income Tax July 2020 payment deferral

HMRC had originally indicated that the payment due on 31st July 2020 could only be deferred if you were self-employed. They have now confirmed this is available to all taxpayers who have a payment on account to be made at the end of July.

HMRC Helpline

The support telephone number has changed to 0800 024 1222, they are open Monday – Friday 8.00 -4.00.

Employees working from home (rules are not new but worth repeating at this time)

Check which expenses are taxable as benefit in kind if your employee works from home due to coronavirus (COVID-19). Extracts from HMRC guidance:

Mobile phones and SIM cards (no restriction on private use)

If you provide a mobile phone and SIM card without a restriction on private use, limited to one per employee, this is non-taxable.

Broadband

            If your employee already pays for broadband, then no additional expenses can be claimed.

If a broadband internet connection is needed to work from home and one was not already available, then the broadband fee can be reimbursed by you and is non-taxable.

In this case, the broadband is provided for business and any private use must be limited.

Laptops, tablets, computers, and office supplies

If these are mainly used for business purposes and not significant private use, these are non-taxable.

Additional expenses like electricity, heating or broadband

Payment or reimbursement to your employees of up to £4 a week (£6 a week from 6 April 2020) is non-taxable for the additional household expenses incurred when your employee is working from home.

Employer provided loans

A salary advance or loan to help your employee at a time of hardship counts as an employment-related loan. Loans provided with a value less than £10,000 in a tax year are non-taxable.

Employees using their own vehicle for business

You can pay approved mileage allowance payments of 45p per mile up to 10,000 miles (25p per mile thereafter) free of tax and National Insurance contributions.

Significant private use

 

For items which are taxable, exemptions for work related benefits must show that there is no significant private use.

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FURTHER ANNOUNCEMENTS IN RESPECT OF COVID-19 SUPPORT -27 March 2020

 

 

SUPPORT FOR SELF EMPLOYED BUSINESSES DISRUPTED BY COVID–19 

 

 

There have been new measures released to support self-employed workers in a similar way to employees. The Chancellor has announced that the government will pay self-employed people a taxable grant based on their earnings. Earnings will be calculated based on three years average profits (or less if you have traded for fewer than that) submitted on self-assessment tax returns. The grant will be 80% of the average earnings figure and capped at £2,500 for a minimum of three months. 

 

 

Who can apply? 

 

 

1) Individuals who had self-employed income before 5/4/2019 and submitted a tax return. 

 

2) Individuals with self-employed profits of up to £50,000 over an average of three years. 

 

3) Individuals where the majority of their earnings has come from self-employment. 

 

4) Those who have traded in year ended 5/4/2020 and at the point of the outbreak. 

 

5) Those who are expecting to continue trading in 2020/2021. 

 

6) Those who have lost trading/partnership profits. 

 

 

Newly self-employed people will not qualify for the grant and will have to seek financial support via a claim for Universal Credit. 

 

 

HMRC will be contacting the individuals they think qualify and hope to have the payments to those people by the end of June. 

 

 

There was a word of warning that if self-employed people were to be given similar benefits to that of employees then the contributions they make to the tax system might have to be aligned in the future. 

 

 

This support is in addition to the measures already released last week in respect of business rates, VAT payment deferral, loans and the ability to defer payments on account at the end of July. 

 

 

FURTHER GUIDANCE ON THE JOB RETENTION SCHEME 

 

‘FURLOUGHING’ 

 

 

Both the employee and employer must agree for the employee to be furloughed. The employer must put the decision in writing to the employee. Please ask us if you would like a template letter to use. The scheme applies to permanent, temporary and zero-hour contracts.

 

 

Employees can be furloughed by one employer but continue to work for another.

 

 

The claim of 80% of earnings (maximum £2,500) is for a minimum of 3 weeks. 

 

The employer can top up to 100% but does not have to. 

 

 

The payment will be subject to Tax and National Insurance in the normal way as earnings. 

 

 

 

Earnings calculation: 

 

 

If employed for a full year, you can claim the higher of: 

 

- The amount you earned in the same month last year;

- The average of your monthly earnings last year. 

 

 

If employed for less than one year, earnings will be calculated based on average since you started work. 

 

 

Bonuses, commissions and fees are NOT included as part of monthly earnings.

 

Vulnerable people 

 

 

HMRC’s guidance to employees says: 

 

 

‘If you are shielding in line with public health guidance, then you should speak to your employer about whether they plan to place staff on furlough’. 

 

 

This statement suggests that if your employees are in the vulnerable category they can still be furloughed and entitled to 80% pay rather than just SSP.

 

 

COMPANY DIRECTORS DRAWING DIVIDENDS 

 

 

There still appears to be no support for owned managed companies of Limited companies who derive the majority of their income from dividends. 

 

 

VAT PAYMENT DEFERRAL 

 

 

As previously announced the VAT that would have ordinarily been collected in the first week of April, May and June can be deferred without application to HMRC.

HMRC has now confirmed that it will NOT automatically cancel collection of VAT payments by direct debit. Businesses that have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank to cancel that mandate. This needs to be done before the direct debit is due to be collected. VAT returns should be filed as normal by the due date. You can of course still pay the VAT due if you wish. 

 

Businesses will also need to remember to reinstate their direct debit mandate once the deferral is over and to make arrangements to pay the accumulated VAT by the end of the 2020/21 tax year.

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PRACTICAL BUSINESS TIPS FOR DEALING WITH COVID – 19

 

On 20th March 2020 the Chancellor notified the Country about a raft of measures to help business and employees survive the social distancing measures that have been introduced. We have tried to summarise them below from the information we have at the moment but the detail on how some will be funded is still to be released. We will try to keep you up to date when we know more. Although we are working from home as much as possible, we are doing our best to keep normal service running. Robert, Helen and Emma are available to discuss your queries over the telephone as required.

 

Support for businesses with employees

 

1)   

Job Retention Scheme

 

HMRC have laid out the following advice so far:

‘Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

 

You will need to:

·       

designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation

·       

submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.’

2)   

Support for businesses who are paying sick pay to employees

The reclaim of SSP from HMRC was withdrawn several years ago. It has been announced that Employers with fewer than 250 employees can now claim back SSP for up to 2 weeks if sickness is due to COVID – 19. HMRC guidance is copied here:

‘The eligibility criteria for the scheme will be as follows:

 

·       

this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19

·       

employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020

·       

employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19

·       

employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website

·       

eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force

·       

the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

A rebate scheme is being developed. Further details will be provided in due course once the legislation has passed.’

 

General Business Support

1)   

VAT payments

The next VAT quarter payments will be deferred, meaning no VAT payments until end of June 2020. Taxpayers will be given until 5 April 2021 to pay any liabilities that have accumulated during the deferral period. VAT refunds will be processed as normal.

It is not yet clear how businesses with Direct Debits set up will get the payment holiday. We will have to wait and see whether all the DD instructions are cancelled or whether each business needs to do themselves. We are currently working on the assumption that the VAT return will still need to be filed on time despite the fact no payment will be needed.

2)   

Income Tax Payments

The Income Tax payments on account for self-employed people due on 31 July 2020 will no longer be payable, they will be deferred until 31 January 2021. The guidance does not seem to allow a deferral for others in the Self-Assessment system at present, for example people in receipt of dividends or rental income who are within the Self-Assessment system.

3)   

Business rates holiday

HMRC have released guidance for those in the hospitality and leisure industry as well as small businesses in general. Their guidance is copied below:

‘We will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

You are eligible for the business rates holiday if:

·       

your business is based in England

·       

your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

·       

as shops, restaurants, cafes, drinking establishments, cinemas and live music venues

·       

for assembly and leisure

·       

as hotels, guest & boarding premises and self-catering accommodation

There is no action for you, however it might be worthwhile checking the local council is aware you come within the relief. This will apply to your business rates bill for 2020/21. However, local authorities may have to reissue your bill to include 100% relief. They will do this as soon as possible, but you could consider cancelling your DD.

More general advice for businesses that pay little or no business rates. The government will provide an additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of Small Business Rate Relief (SBRR), Rural Rate Relief (RRR) and Tapered Relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. 

You are eligible if:

·       

your business is based in England

·       

you are a small business and already receive SBRR and/or RRR 

·       

you are a business that occupies property

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.’

4)   

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of up to £25,000.

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

·       

as shops, restaurants, cafes, drinking establishments, cinemas and live music venues

·       

for assembly and leisure

·       

as hotels, guest and boarding premises and self-catering accommodation

The above grants are administered by the local councils and should be paid automatically, although it could be worthwhile contacting your local council to ensure that they are aware you are within the scheme.

5)   

HMRC time to pay

This arrangement is not new, but firms and individuals can apply to delay payments of outstanding liabilities due to the COVID – 19 outbreak, the dedicated number is 0800 0159 559. Currently HMRC will not accept deferral requests from us as Agents so it is likely that you will have to call yourselves to arrange this.

 

6)   

Business Interruption Loan Scheme

·                

These should be available from Monday 23 March and are delivered by all major banks that partner with the British Business Bank. The lender receives a guarantee of 80% of the loan amount from the Government.

 

·                

They are available for UK-based businesses with turnover of no more than £45 million and can provide for a facility up to £5 million. The borrower remains liable for 100% of the debt.

 

·                

No interest will be charged for the first 12 months.

7)   

Mortgage and rent holidays

Mortgage borrowers can apply for a three-month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.

 

Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months

 

8)   

Insurance claims

We suggest you contact your broker but the current HMRC guidance is as follows:

 

‘Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

 

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.  Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

 

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Coronavirus COVID-19 our office - 16th March 2020

These are uncertain and unprecedented times, as Coronavirus effects the health and safety of individuals and businesses around the UK.  As a result, we are all having to make changes to the way that we work and operate, whether this be as businesses or individuals. 

Wheelers have already implemented a number of measures to ensure that we are able to continue to support you through these times: 

·                We have implemented a policy whereby the majority of our employees have already moved to remote working. 

·                In order to protect the wellbeing of both you as clients and our employees, we have taken the decision not to hold any client meetings in our office. 

·          Our reception remains open to facilitate the dropping off and collecting of documents, but we are asking all clients to make these visits to the office as expedient as possible and only where absolutely necessary. 

·       With regard to on-site visits and bookkeeping, we are implementing where possible, that this is done by your Wheelers contact remotely (where the technology allows), or by way of the information being sent directly to us where possible.  As a result of these measures, we will be contacting you directly to establish how these changes can be implemented in a practical way.  

·          Although we will continue to send documents out by post, it is likely that over the next few weeks more communications will revert to being by electronic means.

For those of you who are in business, I would expect that many of you have already started assessing how Coronavirus will affect your business operationally and financially.  Ultimately, businesses need to understand the key risks and the likely effects on the business’ future income streams.  Some businesses may have business interruption insurance and it may be sensible to talk to your respective brokers to understand what is covered through such policies.  

Please see the link below which is a very useful Government website with information on the help available.

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesse

Ultimately our aim is to continue,  as far as possible, to be business as usual providing support for you and your businesses.  It is likely, over the coming weeks, that many businesses will need to access additional funding, whether this be through the business support, HMRC time to pay arrangements, additional bank financing or other sources of capital likely to be put in place in the near future.