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July 2020

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To July’s Tax Tips & MYOB News.

Coronavirus Support for your business?
With the Government bringing out new support schemes and amending existing ones on a regular basis, you may be unsure of the help available for your business.  If so, just give us a ring or with your questions.

We have summarised the key points of the Summer Economic Statement in our Recent newsletter.

Some of the issues affecting the furlough scheme are given below. 
July 2020
· Coronavirus Job Retention Scheme – Furlough Reminders for July
· Upgrade to AccountEdge 2020
· Business asset disposal relief update
· Advisory fuel rates update
· July questions and answers
· July key tax dates
Coronavirus Job Retention Scheme (CJRS) – Furlough Reminders for July
Part-time Furloughs
As explained in our June newsletter, from July furloughed employees will be able to return to work for their employer part-time. If you choose this option please explain clearly the split between furloughed and worked days (or hours) for each affected employee with your furlough and payroll information each month.

Annual Leave whilst on Furlough
As explained last month, employees who are on furlough continue to accrue annual leave.  To avoid a large accrued holiday balance for those returning to work you may compel your employees to consider a part of their furlough as annual leave.  If you want to do this you do have to write to employees to explain the situation with details of how many holiday days/ hours they have to take and in which months.  We can provide a draft letter to help with this.  Annual leave on furlough has to be paid at the full (topped up) rate and is separated on the payslips as ‘furlough leave’. 

Eligibility for the CJRS £1000 Bonus
As explained in our recent Summer Statement Newsletter, any employer who brings back a furloughed member of staff through to January 2021 will receive a £1,000 bonus per employee.
To benefit:
  • The furloughed employee must remain continuously employed through to 31 January 2021.
  • Employees must earn above the National Insurance lower earnings limit (£520 per month) on average between 31 October 2020 and the end of January 2021.

Deadlines for Submitting Claims
If you haven’t already finalised your June CJRS claim, the deadline for submitting June furlough claims is 31st July. Claims can be submitted for a period ending up to 14 days in the future from the current date.The earliest date we can claim your July furloughs will be 17th July. HMRC seem to be taking 4 or 5 working days to process the claims and rebate clients’ bank accounts.

Booking the Claims in MYOB/ AccountEdge
We advise that the CJRS rebates should be booked in a separate 6-1xxx account – alongside the wages but in a separate account.

Repayment of Furloughed Wages, Employers NI and Pension contributions
For July, the Government pays the employer 80% of employees’ wages up to a cap of £2,500/month. From 1st August, employers must also pay all National Insurance and pension contributions. If you are eligible for the Employment Allowance, do make sure that, if this has been switched off whilst making the furlough claims, you switch it back on in August.  From September employers will also have to contribute 10% of normal pay, rising to 20% in October.
Upgrade to AccountEdge 2020
Business asset disposal relief update top
The latest version of Accountedge (AE) includes the following improvements:
  • Better links to AE connect, including the ability for customers to place orders through their customer portal on your datafile.
  • Faster items register screens
  • New customer and supplier payment reports
  • To Do list for stock alerts now shows sortable stock / item numbers and names.
  • Setting default forms by type for each customer.

We recommend that you have a look through the video and ask us if there are some features that you would like us to introduce for you.

AccountEdge 2020 New Features (You Tube Video)

Please note that we have a page giving a listing of our favourite AccountEdge training videos.
The Spring Budget 2020 announced a significant restriction on future availability of entrepreneur’s relief (ER) for individuals who dispose of all or part of their business, individuals who dispose of shares in their personal company, and trustees who dispose of business assets.

Broadly, the changes will increase the amount of tax payable by a business sold at a profit of over £1m. For potential sale profits at or around this limit, careful planning may be needed to extract value from the business prior to sale, for example through increased employer pension provision, to bring the chargeable gain within the revised limit.
Read More
Advisory fuel rates update top
HMRC publish rates that can be used by employers wishing to pay their employees the cost of fuel for business journeys in company cars (or, where the employer initially pays for all fuel, for reimbursement of private mileage by company car drivers to their employers). Hybrid cars are treated as petrol or diesel cars for this purpose.

HMRC’s guidance on fuel-only mileage rates for company cars confirms that employers are not obliged to use advisory fuel rates. Where an employer wishes to use them, they only apply where the employer:
Read More
July questions and answers top
July key tax dates top
Q. I have been contacted by coronavirus (COVID-19) Test and Trace. Am I eligible for statutory sick pay (SSP) from my employer? Answer

Q. I have owned and rented out a residential property for the last ten years, which I am now considering selling. I will use the proceeds to purchase another rental property. Will I have to pay capital gains tax on the proceeds from the sale even if all the money is reinvested in another property that is also let? Answer

Q. My business is struggling financially due to the impact of the coronavirus (COVID-19) and I am considering applying for a grant being made available by the government via local authorities. Would this income be subject to VAT? Answer
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/7/2020 or quarter 1 of 2019/20 for small employers

Class 1A NIC due in respect of the tax year 2019/20

Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.
About Us top
Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Solar Accounts, Quickbooks or Clearbooks.

‘All clients using these software packages can benefit from our support. Visit our website for a look at the resource on offer.’

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