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October 2020

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Chancellor Rishi Sunak has delivered a statement setting out plans to help workers and businesses hit by new coronavirus restrictions.

It includes plans for a job support scheme to replace furlough, help for the self employed, business loans and VAT cuts. We highlight the main issues for our clients.
October 2020
· Covid-19: Government unveils winter economy plan
· Kickstart for employers
· Can I get a Customs grant?
· The New Job Support Scheme
· October questions and answers
· October key tax dates
Covid-19: Government unveils winter economy plan top
Chancellor Rishi Sunak has unveiled the Government’s winter economy plan, providing an update on current coronavirus support measures for individuals and businesses, and announcing the launch of a new Job Support Scheme.

Key points of the statement include:

– the Coronavirus Job Retention Scheme (‘furlough’ scheme) will end as planned on 31 October 2020;

– a new Job Support Scheme will provide funding for employers who are able to retain employees but on shorter hours. The scheme will initially run for six months from November (see below);

–  the temporary reduced (5%) rate of VAT for the hospitality sector will be extended until 31 March 2021. The cut applies to food and non-alcoholic drinks, accommodation and admission to tourist attractions across the UK;

– there will be an extension of the self-employment income support scheme (SEISS) grant which covered lost earnings. The amount people will get has been reduced – the first grant will cover the start of November to the end of January and cover 20% of average monthly trading profits capped at £1,875;

– taxpayers will be given more flexibility over payment of VAT and personal tax bills. Deferred VAT may be spread over 11 instalments, whilst self-assessment tax due on 31 January 2021 may be spread over 12 interest-free payments; and

– the repayment terms of bounce back loans and other coronavirus support loans are to be extended to help businesses with cashflow. In particular, a new Pay As You Grow scheme will allow businesses with bounce back loans to extend the term of the loan from six to 10 years.

With regard to the news that taxpayers can pay deferred VAT and self-assessment liabilities in instalments, it should be noted that unlike with the original deferments, instalment plans are not automatic and must be applied for. For VAT, the Government has confirmed that an ‘opt-in’ process will be in place by early 2021. For self-assessment, taxpayers can either use HMRC’s self-service time-to-pay facility or contact HMRC’s Time to Pay Self-Assessment helpline on 0300 200 3822.
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Kickstart for employers top
Can I get a Customs grant? top
Under the new Kickstart programme, the Government hopes to create roles for as many as 250,000 young people who are currently receiving Universal Credit (UC).

Initially announced in the July Economic statement, the details of the scheme have now been published and the first placements should be available from November.
Read More
Businesses need to prepare ahead of new Customs procedures coming into play in 2021 when the Brexit transition period ends. The Government has made funding available in the form of a grant to help businesses get ready.

Who can apply?

To qualify for a grant a business must:
Read More
The New Job Support Scheme top
This new scheme will run for six months starting in November and replaces the “furlough” scheme. If an employee works reduced hours the employer pays for that. And in addition the employer and government pay one third of the lost pay each (up to the cap). It means someone working a third of their hours would receive 77% of their pay.

Example:for someone earning £2,500 a month, or £30,000 a year, asked to work three days out of five, or 60% of their usual hours, the scheme would give them £2,175 a month – the equivalent of £26,100 a year. Of this, £283 would come from the government.

The Scheme will be open to all small and medium sized businesses across the UK, even if they have not previously used the furlough scheme.

We will submit the claims on behalf of our clients.
October questions and answers top
October key tax dates top
Q. My mother gave my daughter £5,000 on 1 May 2016. She had not made any other gifts in previous years. Unfortunately my mother passed away on 1 September 2020. How much of the gift she gave to her granddaughter is chargeable to inheritance tax? Answer

Q. I am a self-employed builder. I carried out a job for a customer and invoiced him for £750. The customer did not pay the invoice and I have since discovered that he has been declared bankrupt. I included the £750 in my turnover figures. Can I claim tax relief for the unpaid bill? Answer

Q. I have recently become unemployed due to the coronavirus pandemic so I am going to rent a room out in my home to get some extra income. What are the tax implications if this is my only source of income? Answer
1 – Due date for payment of Corporation Tax for the year ended 31 December 2019

5 – If a Tax Return has not been received, individuals and trustees must notify HMRC of new sources of income and chargeability in 2019/20

14 – Return and payment of CT61 tax due for quarter to 30 September 2020

19 – Tax and Class 1B national insurance due on PAYE settlements for 2019/20

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/10/2020 or quarter 2 of 2020/21 for small employers

31 – Deadline for 2019/20 self assessment paper returns to be filed for HMRC to do the tax calculation. If a paper return is being filed also the deadline for tax underpaid to be collected by adjustment to your 2021/22 PAYE code (for underpayments of up to £3,000 only)
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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