Archive for the ‘Uncategorized’ Category

Are you eligible for Universal Credit?

Thursday, November 12th, 2020

What to do if you are placed in a financial position where you do not have sufficient income to meet your monthly outgoings and you are unable to find work to plug the gap.

The main government assistance for those who find themselves in this position is to register for Universal Credits.

The following notes from the GOV.UK website may help you decide if you are eligible to make a claim.

You may be able to get Universal Credit if:

  • You are on a low income or out of work
  • You are 18 or over (there are some exceptions if you’re 16 to 17)
  • You are under State Pension age (or your partner is)
  • you and your partner have £16,000 or less in savings between you
  • you live in the UK

 

The number of children you have does not affect your eligibility for Universal Credit, but it may affect how much you get.

You should use the benefits calculator on the GOV.UK website to check what other benefits you could get if you are not eligible for Universal Credit.

If you live with your partner

Your partner’s income and savings will be considered, even if they are not eligible for Universal Credit.

If you are 18 or over and in training or studying full-time

You can make a new Universal Credit claim if any of the following apply:

  • you live with your partner and they are eligible for Universal Credit
  • you are responsible for a child, either as a single person or as a couple
  • you are disabled and entitled to Disability Living Allowance (DLA) or Personal Independence Payment (PIP) and have limited capability for work
  • you are in further education, are 21 or under and do not have parental support, for example you’re estranged from your parents and you’re not under local authority care

If you are 16 or 17

You can make a new Universal Credit claim if any of the following apply:

  • you have limited capability for work, or you have medical evidence and are waiting for a Work Capability Assessment
  • you are caring for a severely disabled person
  • you are responsible for a child
  • you are in a couple with responsibility for at least one child and your partner is eligible for Universal Credit
  • you are pregnant and it’s 11 weeks or less before your expected week of childbirth
  • you have had a child in the last 15 weeks
  • you do not have parental support, for example you’re estranged from your parents and you are not under local authority care

 

You can also make a claim if you’re in full-time further education and any of the following apply:

  • you do not have parental support
  • you have limited capacity for work and you’re entitled to Personal Independence Payment (PIP)
  • you are responsible for a child
  • you are in a couple with responsibility for a child and your partner is eligible for Universal Credit

If you’re in a couple and one of you is State Pension age

You and your partner can claim Universal Credit as a couple if one of you is under State Pension age and eligible for Universal Credit.

When you both reach State Pension age your Universal Credit claim will stop.

You may be able to apply for Pension Credit or other benefits as a couple when your Universal Credit stops. Ask your Jobcentre Plus work coach what else you could be eligible for.

Government financial support extended

Monday, November 9th, 2020

Government financial support for UK businesses affected by the COVID pandemic have been extended in the past week. Thankfully, relief for employees of affected companies and the self-employed have been announced in tandem. A short summary of the main changes follows:

Coronavirus Job Retention Scheme (CJRS)

This furlough scheme will now be extended until the end of March 2021. Details released 5th November 2020 are:

  • Government will cover 80% of hours not worked up to a maximum of £2,500 per person per month. This percentage support may be flexed for February and March 2021 when employers may be asked to contribute.
  • Any grants paid must be passed on to the relevant employee in full.
  • The previous flexibility to allow employees back part-time will continue until December.
  • Employers will only be asked to cover National Insurance and pension costs and wages for time worked. Importantly, they will NOT be required to contribute to hours not worked but they are free to make top-up payments at their discretion.

Which employers/employees can claim or be eligible for this extended support?

  • All employers with a UK bank account and a UK PAYE scheme can make a claim.
  • There is no requirement that employers or employees have made previous claims for CJRS support.
  • Employees must be on employer’s payroll before midnight 30 October 2020.

Previously announced Job Support Scheme (JSS)

As the furlough scheme is now extended to the end of March 2021, This new scheme will be deferred until the extended furlough scheme ends, presumably 31 March 2021.

The Job Retention Bonus

This bonus of £1,000 per employee retained January 2021 will no longer be paid as the furlough scheme now extends to 31 March 2021. However, the Chancellor has hinted that this bonus may be reintroduced when the extended furlough scheme ends.

The Self Employed Income Support Scheme (SEISS)

The Chancellor has announced a corresponding increase in financial support for the self-employed to mirror the benefits of the extended furlough scheme.

For the period November 2020 to 31 January 2021, SEISS support will be 80% of average trading profits capped at £7,500.

The previous eligibility criteria will still apply.

Additionally, SEISS grants will be paid faster. The claims window will open at the end of November rather than the middle of December. This will provide much needed funds for the self-employed before Christmas.

There will be a further SEISS grant for the period 1 February 2021 to 30 April 2021. The amount for this period should be announced January 2021.

Government backed loan schemes

The deadline for submitting applications for government backed loans has been extended to 31 January 2021.

Get ready for end of EU transition period

Thursday, November 5th, 2020

Government have recently promoted their online webinars that aim to support businesses who will be affected by the end of the EU exit transition period, 31 December 2020.

Here’s what the Department for Business, Energy and Industrial activity have to say:

Over 3,000 people have attended government webinars to help them get ready for the end of the transition period, with 86% of those polled saying they would take action to prepare their business as a direct result of the sessions.

With just 63 days to go till the UK begins its new start outside of the EU single market and customs union, the Business Secretary Alok Sharma is encouraging businesses across the UK to sign themselves up for a webinar to help them prepare for the changes and opportunities ahead.

This second phase of webinars – which will run throughout November – will cover key issues that could affect businesses in multiple sectors, including personal data, and regulations on manufactured goods.

To register for the webinars go to https://www.workcast.com/ControlUsher.aspx?pak=2807339524439725

You can also obtain targeted advice on what you may need to do before the end of the year by completing the online questionnaire at https://www.gov.uk/transition.

A final word from government:

When the transition period ends on 31 December 2020, there will be a guaranteed set of changes and opportunities for which businesses need to prepare as the UK leaves the customs union and single market, including changes to the way businesses import and export goods, and the process for hiring people from the EU.

Use the links in the above post to ensure you are fully informed.

Are you making the most of your accounts data?

Wednesday, November 4th, 2020

Many of us have taken the step from manual to digital accounting systems. But are you making the most of features provided?

Without a doubt, accounts software offers a wealth of reports many of which will likely be of limited use to businesses, however, many will be of use.

There is a temptation to stick with the basics; am I making a profit (the profit and loss statement) and am I solvent (a balance sheet). Job done…

Coronavirus has extended these basic needs to include cashflow reports; when are we going to run out of cash?

What else is available?

Most software will allow you to create a budget, plug these forecasts into the software and produce reports that compare what has actually happened with what you expected to happen. In this way you can see when unexpected changes in your finances occur and take steps to minimise any downside risks.

Another useful feature is to fully utilise reports that flag up when your customers have exceeded their agreed payment terms. This information can be used to generate statements and copy invoices to chase up monies outstanding. As your accounts software usually stores your customer contact details, especially email addresses, these reminders can be sent out at the click of your mouse button.

Other features that may be available:

  • Stock management reports
  • Departmental reporting
  • Key Indicator Reports
  • Online links to submit VAT returns
  • Automated integration of payroll data

Many accounts software developers offer a range of bolt-on products for specialist businesses and integrations. And last but not least, it is possible to build bespoke reports to highlight specific reporting concerns. As long as data is being collected it can usually be reported on.

Time to review your data forecasting needs.

Using data wisely and with a clear intent to forward your business development during these unprecedented times has to be a winner. Please call so we can discuss your needs and help you maximise the benefits of your investment in data management for your business.

Cash back at all shops

Monday, November 2nd, 2020

Brits will be able to get cashback from shops without needing to buy anything under new proposals to protect the UK’s cash system announced 15 October 2020.

Under the government proposals, cashback without a purchase could be widely available from retailers of all sizes in local communities across the UK.

Although cash use is declining, with people increasingly choosing cards, mobile and e-wallets to make payments, it remains crucial for at risk groups across the UK – including the elderly and vulnerable. Many find that cash is more accessible than digital payment methods or that it helps them to budget and manage their finances.

Current EU law makes it difficult for businesses to offer cashback when people are not paying for goods and this has been a barrier to widespread adoption. The government is now considering scrapping these rules once the transition period ends on 31 December 2020.

The government is also considering giving the FCA overall responsibility for maintaining a well-functioning retail cash system given its existing regulatory role and consumer protection objective.

At present, The Bank of England, the Financial Conduct Authority, the Payment Systems Regulator and HM Treasury each have specific roles and responsibilities for oversight of the cash system. Close coordination between these authorities has been highly effective, particularly in managing risks to cash through COVID-19, but there may be significant benefits to giving a single authority overall responsibility for setting requirements to meet the cash needs of consumers and SMEs.

Students warned to avoid tax scams

Monday, November 2nd, 2020

Readers with children at university should pass on this message as students starting university this year are being warned by HMRC that they could be targeted by a fresh wave of tax scams.

As new students start the academic year, they can be particularly vulnerable to cybercrime. With universities taking a blended approach to online and face-to-face tuition this year, and an increase in remote working due to the pandemic, students could be left particularly exposed to the work of fraudsters.

Freshers might also be more vulnerable to these types of scams due to their limited experience of the tax system.

HMRC has written to universities, through Universities UK, asking them to help ensure their students know how to spot a scam.

In August, HMRC received reports from the public of more than 74,800 scam emails, text messages and phone calls. Nearly 41,300 of these specifically offered bogus tax rebates.

Thousands of these scams were targeted at students and the criminals involved appear to have obtained their personal university email addresses by unlawful means. These scams often offer fake tax refunds or help with claiming COVID-related financial support.

Phishing email messages can also provide a gateway for criminals. Students who provide personal details in response can end up inadvertently giving access to important accounts, like email or online banking, leaving scammers free to commit fraud and steal their money.

Criminals also use phone scams to threaten taxpayers into handing over cash. Some 651,600 scams have been referred to HMRC since August last year. Of those, more than 215,660 were voice or phone scams, known as vishing.

If someone calls, emails or texts claiming to be from HMRC, saying that you can claim financial help, are due a tax refund or owe tax, and asks for bank details, it might be a scam. Check GOV.UK for how to recognise genuine HMRC contact.

How much of your estate will be taxed?

Monday, November 2nd, 2020

The present rate of Inheritance Tax (IHT) that is payable by your executors on your taxable estate is 40%.

The good news is that you can reduce the impact of this tax, which effectively reduces the amount of your hard-won assets that is received by your beneficiaries.

For example:

  • The first £325,000 is tax-free. This may increase to £500,000 if you leave your home to your children or grandchildren, and
  • If you leave your estate to your spouse, civil partner or charities there is normally no IHT to pay.

Additionally:

  • IHT is reduced to 36% if you leave more than 10% of your “net-value” estate to charity.
  • Chargeable gifts made within the last seven years may be bought into account for IHT but are subject to a decreasing rate of IHT based on a sliding scale over the seven year period.
  • Business assets relief may apply in which case those business assets would pass tax-free or be subject to a reduced rate. The same may also apply to agricultural property.

Ironically, you don’t have to die to determine how much tax your estate will pay. It is possible to organise your affairs to reduce the future IHT bill by careful planning.

If you are interested in considering the options available to ensure more not less of your estate passes to your family, please call to discuss your options.

Make hay while higher rate relief is available

Monday, November 2nd, 2020

For many years Chancellors have threatened to reduce the Income Tax relief that can be claimed for payments into a private pension scheme.

There have been reductions in the amount of contributions that can be made and the size of the pension fund that can be accumulated, but thus far, allowable contributions may still attract Income Tax relief at your highest rate (20%, 40% or 45%) subject to regional differences.

It is this higher rate tax relief that may now be subject to change.

Our present Chancellor, Rishi Sunak, has publicly declared that he wants to recoup some of the recent government COVID expenditure by increasing the Treasury’s tax take. As we have already suggested, one of the proposed weapons in his tax-increase arsenal is to remove or reduce the higher rate Income Tax relief on pension contributions.

For example, he could restrict tax relief to basic rate (20% subject to regional differences) or cap at a hybrid rate of say 33%.

As the next budget is just around the corner, likely to be February or March 2021, now may be a good time to consult with your pensions adviser and maximise your contributions for this year.

Tax Diary November/December 2020

Monday, November 2nd, 2020

1 November 2020 – Due date for Corporation Tax due for the year ended 31 January 2020.

19 November 2020 – PAYE and NIC deductions due for month ended 5 November 2020. (If you pay your tax electronically the due date is 22 November 2020.)

19 November 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2020.

19 November 2020 – CIS tax deducted for the month ended 5 November 2020 is payable by today.

1 December 2020 – Due date for Corporation Tax payable for the year ended 28 February 2020.

19 December 2020 – PAYE and NIC deductions due for month ended 5 December 2020. (If you pay your tax electronically the due date is 22 December 2020)

19 December 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2020.

19 December 2020 – CIS tax deducted for the month ended 5 December 2020 is payable by today.

30 December 2020 – Deadline for filing 2019-20 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2021-22.

Tax return reminder

Thursday, October 29th, 2020

HMRC have recently published a press release entitled “Just 100 days left for Self -Assessment”.

Before readers make the obvious connection, that this heralds the end of tax returns in the UK, it is purely a reminder that 2019-20 Self-Assessment returns need to be filed by 31 January 2021.

Gathering together the information to complete your return may have been a long way down your to-do list during the unprecedented period of COVID disruption. However, there is no sign that the 31 January 2021 filing deadline is being moved and so, readers who have not yet filed should start to consider what needs to be done.

 

In their press release HMRC confirm that:

Taxpayers must complete a Self-Assessment return if they:

  • have earned more than £2,500 from renting out property
  • have received, or their partner has received, Child Benefit and either of them had an annual income of more than £50,000
  • have received more than £2,500 in other untaxed income, for example from tips or commission
  • are a self-employed sole trader whose annual turnover is over £1,000
  • are an employee claiming expenses in excess of £2,500
  • have an annual income of over £100,000
  • have earned income from abroad that they need to pay tax on

 

Additionally, HMRC said:

The vast majority of Self-Assessment taxpayers complete their tax return by the 31 January deadline, but you don’t need to wait until January; you can send it back now and get it out of the way.

HMRC is determined to help customers during this difficult time. We know many customers will have been adversely affected by the coronavirus pandemic or will need help to spread the cost of their tax bill. That’s why we’ve made it quick and simple to set up a payment plan to spread the costs and help people get back on their feet. It’s easy to do online and there’s no need to call us to set it up.

Once Self-Assessment customers have completed their 2019-20 tax return, and know how much tax is owed, they can set up their own payment plan to help spread the cost of their tax liabilities, up to the value of £30,000.

They can use the self-serve Time to Pay facility to set up monthly direct debits and this can all be done online so there is no need to phone HMRC.