Today the Chancellor announced an extension of the Coronavirus Job Retention Scheme, supporting workers who are unable to work due to COVID-19 and will continue to provide 80% of workers wages until October 2020.
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A useful guide for employers and employees working from home due to coronavirus. See what support is available and what you can claim in expenses.
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Following Chancellor, Rishi Sunak’s announcement on 20th March 2020, The UK government is supporting all businesses during the coronavirus pandemic by deferring VAT payments due from 20th March to 30 June 2020 inclusive and payment on account self assessment payments due in July 2020. Coronavirus Q&A: VAT & payment on accounts deferral, your questions answered.
When is the deferred VAT payment due to be paid to HMRC?
As it currently stands, Businesses will have until the end of the 2020-21 tax year to settle any liabilities due for this period i.e. until the 31 March 2021.
Q) Do I need to apply to HMRC to defer my VAT payment?
The deferral of VAT payments applies automatically so businesses do not need to apply for it.
Q) My VAT quarter-end is February 2020; am I still required to complete a VAT return?
Yes.
You will still need to submit a return by the normal due date as normal, usually one month and a week after your quarter-end.
For example, for a February quarter-end VAT return date your VAT return is due by 7th April 2020.
As the payment date of 7th April falls within the deferment period of 20th March to 30 June 2020, you are not due to pay any tax liability due immediately.
VAT deferment payments also apply to VAT quarter-end dates in March and April 2020.
Q) I pay my VAT by direct debit, will HMRC not collect payment automatically?
HMRC have advised businesses who pay by Direct Debit to cancel their direct debit themselves with their bank if they are not able to pay and to allow sufficient time for the bank’s cancellation process to take effect.
HMRC’s system will not automatically suspend the collection of payments so if you do pay your VAT bill in error because you have forgotten to cancel your direct debit, HMRC will not return the payment to you.
Q) What if I am due a VAT refund?
VAT refunds and reclaims will be paid by HMRC as normal on receipt of the VAT return submission.
The deferral for income tax self assessment applies to the second payment on account due on 31 July 2020 for tax year 19/20.
Q) When is the deferred payment due?
Payment is now deferred until 31 January 2021.
Q) Do I need to apply to HMRC to defer my payment on account?
No. The deferment is automatic and you do not need to contact HMRC.
Q)I pay my payment on account by direct debit, will HMRC not collect payment automatically?
It is unusual for taxpayers to pay their payment on account via direct debit, but if you do, HMRC have advised businesses who pay by Direct Debit to cancel their direct debit themselves with their bank if they are not able to pay and to allow sufficient time for the bank’s cancellation process to take effect.
HMRC’s system will not automatically suspend the collection of payments so if you do pay your VAT bill in error because you have forgotten to cancel your direct debit, HMRC will not return the payment to you.
Q) I am not self-employed, but I need to complete a self assessment tax return to declare other income. Does this deferral still apply to me?
Following some initial confusion HMRC has now confirmed that the deferral applies to all tax payers.
It is not necessary to be self-employed to be eligible for the deferral.
Q) I can afford to pay my payment on account, can I still pay?
The deferral is optional – some taxpayers may prefer to make the July payment to avoid a larger payment in January 2021, for example.
Q)Has the deadline changed for self assessment submission for 19/20 tax year?
Self assessment returns should still be filed by their usual due date for tax year 19/20, with the hard deadline of 31 January 2021.
However, we strongly recommend you complete your tax return sooner, earliest date being 6th April 2020, as you may be due a tax refund which will be paid out immediately or giving yourself more time to plan for your tax bill due in January 2021.
Please contact us if you would like support with completing your self assessment tax return.
Further guidance on the VAT deferment and payment on account for self assessment and the other government COVID-19 schemes can be found here.
HMRC also have a dedicated helpline with an option for VAT. The number is 0800 0159 559.
While the deferral measures brought in should reduce the need to call HMRC to discuss a time to pay, you can also use the number if you have difficulty submitting the return on time due to coronavirus related issues.
Written by Shaima Todd
HMRC will reimburse 80% of furloughed workers wage costs up to a cap of £2,500 per month per employee. The scheme will be in place for 3 months and if needed, be extended until the health crisis is over. Employer Q&A: Coronavirus Job Retention Scheme, your questions answered here.
HMRC are currently creating a new online portal so that all UK employers, regardless of size, will be able to seek assistance if they have employee(s) who have been designated as ‘furloughed’ workers, known as the Coronavirus Job Retention Scheme.
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Its Q& A Friday! You may be wondering, why can’t I pay my taxes with a credit card? HMRC took the decision two years ago to ban credit card payments to pay your tax bill.
The main reason being to avoid the small credit card fees they would incur if they did!
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Let’s face it, who would want to be in Rishi Sunak’s shoes right now? Ok, he may have landed one of the most important jobs in the country as chancellor of the exchequer, but having to deliver one of the most important tasks of his job being only one month in? No easy task.
Our predictions for the 2020 Budget which will be delivered by Sunak on the 11 March.
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“My wife and I have decided to carry on trading in my company, can I defer my state pension? If I can, what are the effects on my pension payments?”
… Continue ReadingWhat are the advantages and disadvantages of payrolling benefits to your employees? Let’s take a look…..
HMRC first introduced the ability for employers to payroll taxable benefits to employees in 2016.
Payrolling means that any benefits you provide to your employees is treated as cash equivalents, so the necessity of completing a P11D form is no longer required, benefits are in effected ‘payrolled’ into staff salaries and employees pay tax over the tax year each month via their salary versus additional tax having to be paid via employees’ tax codes.
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If you are self-employed or run a small business, time may well not be on your side and taking time away from your business may feel tricky to justify. Perhaps you are run a small business with only yourself at the helm, or even with a small team in place, you may feel that you need to be around for clients all the time to retain business. Even if you know in theory the many benefits of taking time out for yourself, not least of all to support your business’ productivity, here are five reasons to do something about it.
The way we work has changed significantly and will continue to evolve and change over time. There are now more people than ever going it alone and setting up their own business and entering self-employment.
In the UK there are now 5.5 million small businesses and self-employed in the UK and 60 per cent of private sector employment is now in small businesses.
Stigma around mental health remains a big issue but is changing in larger businesses, where for example, mental health first aiders are being trained internally providing a confidential, on hand, help to employees.
As a small business owner, you are just as susceptible to mental health issues and could be argued even more so, with potentially more financial and time pressures.
There are a few straightforward tasks you can do now to improve your mental health immediately. For example, making time for exercise, whether this is half an hour in the gym or just going for a long walk. Being physically active will help to improve your mood as well as release any stress. Taking short breaks regularly throughout the day is another great way to boost your overall productivity.
Don’t disregard booking holidays or longer periods of time off either. If planned well and in advance, Lastly, if you can, booking holidays or longer periods of time off can really help you relax and recover.
Now that you are regularly taking short periods of time away from your small business, this is also a good time to re-connect and spend quality time with family and friends. You are more likely to get the support, love and time from your loved ones, giving you a boost to your mental health and well being.
A work/life balance can enrich your daily routine and time away to spend on your other passions and hobbies can help give you perspective and potentially spur new ideas on your business.
Taking time out from your small business on your hobbies doesn’t necessarily need to be a daily occur you enjoy doesn’t need to be a daily occurrence. Even once or twice a week could make all the difference to your health and well being.
It’s important to realise that there is more to life than just your business. Although it is of course essential for you to work on your business, from starting it up to growing it, you do also need a healthy mind and a thought process which is not overstressed or overworked.
Ensuring you get good quality sleep is incredibly important to your productivity, concentration and general well being. Despite this, many people don’t set sleep as a priority, and the build of poor quality sleep can have a detrimental effect on health and well being.
Getting a good night’s sleep gives you the energy you need to get through your busy day and cope with inevitable curve balls and gives your body and brain time to rest and recuperate, ultimately making you more productive.
Sleep also alleviates stress further supporting your mental and emotional wellbeing.
Why not set a daily time to clock off work every day and do something relaxing away from your screen and phone to help you unwind and get the quality sleep you need.
A burnout is repetitive, long-term stress on your mental and physical health leading to exhaustion.
Signs that you are heading for a burnout include persistent low moods and motivation and perhaps feelings of disillusionment with your business.
If left unchecked, burnout can impact your health, happiness and job performance, all of which puts your business at risk.
If you recognise any of the signs then take steps to rebalance your work/life balance and seek help if you need it.
The importance of taking good care of yourself for the benefit of your mental health and the success of your business maybe obvious, but can be hard to enact. Why not get organised, outsource work if you need to, put clear procedures in place and plan longer breaks well in advance. Set aside some time each day to switch off, get your work-life balance in check and reap the rewards!
Southside Accounting are your local cloud accountants in Wimbledon and London. We’re local, like you. And we’re a dynamic small business. Just like you.
We are fully chartered, certified accountants so we’re well qualified to be the trusted advisers you need to help make your company a success.
All our clients are on the cloud and have access and support on cloud accounting software, in both QuickBooks and Xero.
Our fixed fee structure means there are no surprises. And our smart Service Plans are tailored to meet the particular demands of your business.
So whether you’re a sole trader just starting out, a Limited Company, PAYE, or an established business with employees, we can help.
Call us to book a free no-obligation meeting today.
We always offer an initial free face to face meeting with prospective clients, so we can get to know you and your business and understand your unique circumstances and business goals.
Written by Shaima Todd.
Cloud accounting software gives small businesses the opportunity to access cutting edge technology for a very low fee that offers both business efficiency and the ability to stay on top of financial affairs from anywhere and at any time. Furthermore, with the government’s plans to move all tax reporting digitally over time, with the first phase coming into force this year for VAT registered businesses, it is time for small businesses to embrace cloud accounting.
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