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2022 Spring Budget Statement Highlights

Wed, 23 Mar 2022 00:00:00 GMT

On 23 March 2022, Rishi Sunak (The Chancellor of the Exchequer) presented the UK Spring Budget Statement for 2022, outlining a series of amendments to help businesses and individuals with the rising costs of living.

The highlights of the 2022 Spring Statement were:

Fuel Duty reduced by 5p per litre
National Insurance threshold increased in line with income tax to £ 12,570
0% VAT for Solar Panels & Green Technologies
Increase in Employment Allowance to £ 5,000
Household Support Scheme for Local Authorities doubled to £1bn of funding
Reduction in Income Tax from 20% to 19% from 1 April 2024

We will be posting more detailed information regarding the changes summarised above shortly.

Please feel free to contact us on 01934 440157 or email us at hello@thelocalaccountant.co.uk with any queries.

New "one-off" £500 payment for working households receiving tax credits

Tue, 23 Mar 2021 00:00:00 GMT

If you’re part of a working household that receives tax credits, you may be eligible for a new one-off payment of £500. The new payment is being introduced to provide extra support when the temporary increase in Working Tax Credit ends as planned on 5 April 2021.

You may get a one-off, tax-free payment of £500 if, on 2 March 2021, you were getting either:

Working Tax Credit
Child Tax Credit and were eligible for Working Tax Credit but you did not get a payment because your income is too high to get Working Tax Credit payments

You do not need to contact HMRC or apply for the payment. HMRC will contact you by text message or letter in April 2021 to confirm you are eligible.

If you are eligible, you should get your payment direct to your bank account by 23 April 2021. HMRC have confirmed that you will not see the payment on the online tax credit service.

The payment is non-taxable and will not affect your benefits. You do not need to declare it as income for Self-Assessment tax returns or for tax credit claims and renewals.

HMRC Portal for Statutory Sick Pay Claims due to Covid-19 now open

Tue, 26 May 2020 10:48:15 GMT

HMRC have now (26 May 2020) opened their portal for making claim for Coronavirus-related (Covid-19) Statutory Sick Pay (SSP)

Therefore, if you’re an employer with fewer than 250 employees, you can now claim for Coronavirus-related (Covid-19) Statutory Sick Pay (SSP). If you have a tax agent, they can also make claims on your behalf.

To make a claim now, please use this link: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

Which employers can use the scheme?

You’re eligible to use the scheme if you meet all of the following criteria:

you’re claiming for an employee who’s eligible for sick pay due to coronavirus
you had a PAYE payroll scheme in operation before 28 February 2020
you had fewer than 250 employees across all PAYE schemes on 28 February 2020
you’re eligible to receive state aid under the EU Commission Temporary Framework – more information about this can be found on GOV‌.UK (please use the search term above).

Which employees are entitled to SSP?

The repayment will cover up to two weeks of the applicable rate of SSP, and is payable if a current or former employee was unable to work on or after 13 March 2020 and entitled to SSP, because they either:

had or have coronavirus
could not or cannot work because they were/are self-isolating at home
were/are shielding in line with public health guidance.

Which records should employers keep?

You must keep records of SSP that you’ve paid and want to claim back from HMRC.

You must keep the following records for 3 years after the date you receive the payment for your claim:

the dates the employee was off sick
which of those dates were qualifying days
the reason they said they were off work – if they had symptoms, someone they lived with had symptoms or they were shielding
the employee’s National Insurance number.

You can choose how you keep records of your employees’ sickness absence. HMRC may need to see these records if there’s a dispute over payment of SSP.

What is the true cost of redundancy?

Tue, 26 May 2020 10:19:21 GMT

With the government announcement yesterday that non-essential shops will be allowed to reopen on Monday 15 June 2020; a topical question for employers and employees alike is whether the staffing levels that existed before the Covid-19 outbreak, will still be required when a new normal is in place.

In light of this , we have had many clients that are employers asking how much they would be required to pay in the event that they may need to make redundancies in their respective businesses. The basic HMRC advice is detailed below; but please feel free to contact us if you would like any assistance.

You’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for 2 years or more.

You’ll get:

half a week’s pay for each full year you were under 22
one week’s pay for each full year you were 22 or older, but under 41
one and half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years.

If you were made redundant on or after 6 April 2020, your weekly pay is capped at £538 and the maximum statutory redundancy pay you can get is £16,140. If you were made redundant before 6 April 2020, these amounts will be lower.

To calculate your redundancy pay; follow the HMRC link > Calculate your redundancy pay

Please note that redundancy pay (including any severance pay) under £30,000 is not taxable.

The links below provide more information should this be something you think may affect you or your business; HMRC and ACAS (The Advisory, Conciliation and Arbitration Service):

HMRC - https://www.gov.uk/redundancy-your-rights/redundancy-pay
ACAS - https://www.acas.org.uk/redundancy

If you have any specific questions in relation to redundancy please contact the TLA Payroll and HR Team by email or phone and we will discuss your query.

How to claim your Self-Employment Income Support Scheme (SEISS) Grant?

Thu, 07 May 2020 10:29:34 GMT

The help and advice that has been provided by HMRC and the Government has changed several times over the past few weeks. The information provided in this blog post is the latest update we have available on how to apply for the self-employment grant.

Firstly, please note that this grant is only for sole traders and partners of a business partnership and therefore directors/shareholders of limited companies are not permitted to claim via this business support scheme.

For tax payers who are eligible, you will receive an email from HMRC, not a letter as originally announced. Please be aware that there are lots of phishing emails coming through to clients at the moment and the email you receive will not ask you to click on any links, as this is completed via the HMRC secure portal; known as the Government Gateway.

Are you eligible to Claim?

If you are unsure if you are eligible to claim please follow the link below:

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Please make sure that you use capital letters for your NI number otherwise it will fail. If you believe you are eligible to claim, but the calculator is failing, please get in touch and we will advise further and offer our opinion.

If you qualify you will be able to claim from the 13 - 18 May 2020. To claim you will need a Government Gateway Log In and Password.

How to set-up a HMRC Tax Account (Government Gateway)

If you do not have one, please follow these steps to set one up by visiting https://www.gov.uk/personal-tax-account . We recommend that you act NOW to avoid any repayment delays.

How to retrieve Lost or forgotten Passwords

If you have forgotten or lost your username and/or password you can get these reset with HMRC using the link below:

https://www.tax.service.gov.uk/account-recovery/lost-user-id-password/check-email

How The Local Accountant - TLA can Help

From the information provided so far, we do not believe we will not be able to claim your grant on your behalf via our gateway account. However, this may change, but to avoid any delays we receiving your grant we recommend make sure your gateway is set up.

If you need assistance to apply for your grant please email or call us and the TLA team will be happy help.

Email: hello@thelocalaccountant.co.uk

Land Lines: 01934 440157 (W-s-M) or 01823 353765 (Taunton)

New 100% government backed loan scheme for small businesses

Mon, 27 Apr 2020 15:52:32 GMT

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced today, Monday 27 April 2020.

Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus (Covid-19) pandemic.

The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.

The government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days - providing immediate support to those that need it as easily as possible. Banks should be able to offer loan applications from next Monday, 4 May 2020.

The key points of this loan are:

businesses will be able to borrow between £2,000 and £50,000 and access the cash within days
loan term between 12 months and 6 years
loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form
low rates of loan for any repayments after the initial 12 months will be agreed between the UK banks and the government

To read the full HMRC details please use the link below:

https://www.gov.uk/government/news/small-businesses-boosted-by-bounce-back-loans

HMRC Extends Furlough scheme cut-off date to 19 March 2020

Wed, 15 Apr 2020 15:13:30 GMT

Thousands more employees will able to receive support through the Coronavirus Job Retention Scheme (CJRS) after the eligibility date was extended to 19 March 2020, the government announced today.

eligibility cut-off date for Coronavirus Job Retention Scheme extended to 19 March 2020
the change will mean thousands more workers can be furloughed
scheme expected to be fully operational next week

To read the full HMRC article please use the link below:

https://www.gov.uk/government/news/furlough-scheme-cut-off-date-extended-to-19-march

Job Retention Scheme Portal to go live on 20 April 2020

Wed, 08 Apr 2020 15:09:58 GMT

HMRC has announced today that a new online portal service will be launched on 20 April 2020 to allow businesses to make claims relating to the Coronavirus Job Retention Scheme (CJRS) for furloughed workers.

On the 20 March 2020 The Chancellor, Rishi Sunak, called upon HMRC to assist with delivering financial support to UK businesses and its population, during the outbreak of Covid-19, with one of the important measures introduced being the CJRS. HMRC has now confirmed the intended launch date and explained that claims will need to be made online only, using the new portal.

HMRC has advised that it is working as relentlessly to deliver this service, which will allow businesses to make a claim for 80% of furloughed employees pay, up to a maximum cap of £ 2,500 per eligible employee.

Any businesses and agents that are authorised to act on behalf of clients for PAYE matters online with HMRC will have the ability to claim. Conversely, file only agents and Payroll Bureaus will not be able to access the service for data protection reasons.

HMRC still requires the support of file only agents, even though they will not be able to access the service themselves. These agents are being asked to help their clients, as it is highly likely that they will have access to information that their clients will need in order to make their claims.

The information that businesses will need to provide in relation to each furloughed employee is:

National Insurance number
Salary, National Insurance and Pension Contribution information to allow businesses to correctly calculate the amount that they can claim from HMRC

If you would like any assistance with your CJRS claim, please contact us and the TLA Team will be happy to assist you.

In the new age of mass homeworking in the UK, we discuss the topic of Electronic Signatures

Wed, 01 Apr 2020 21:17:11 GMT

Is it a legal requirement for a “wet ink” signature?

It is becoming increasingly more common to receive poorly pixelated – copy of a sender’s signature at the bottom of accounts, letters or legal documents, but until now it was unclear just what legal basis these digital signatures held.

Law Commission’s Opinion
The advice arose as a result of a study of statute, common and case law surrounding the use of electronic execution of documents and the legality and validity of such methods.

In short, digital signatures on all documents, including deeds, will be held to be valid, provided that the signatory intended to sign the relevant document and that all further requirements have been satisfied, such as witnessing.

Remote witnessing?
In light of the above advice, businesses have begun to wonder about the other possibilities technology provides, such as remote witnessing.

The Law Commission have, however, curbed any such expectations by confirming that “our view is that the requirement is that a deed which must be signed “in the presence of a witness”, requires the physical presence of that witness”.

Are you a Company Director or Self-Employed?

Wed, 01 Apr 2020 11:32:40 GMT

TLA have received many calls from clients who are confused whether they are classed as being Self-Employed or a Company Director per HMRC; the easy answer is as follows:

• If you operate your business using a limited company you are a director of an owner managed limited company and therefor you are a company director and not self-employed

• If you run a sole trade or are a partner in a business you are classed as self-employed as your effectively work for your, per the HMRC guidelines > please visit this HMRC link for more information https://www.gov.uk/working-for-yourself

Please also note that the term “Freelance” or “Freelancer” is neither of the above, it is the actual business vehicle that you trade under that determines whether you a company director or self-employed.

Now that you've established if your a company director you should also be aware of your duties responsibilities to Companies House & HMRC; the links below will provide more information:

National Minimum Wage Rates from 1 April 2020

Wed, 01 Apr 2020 00:00:00 GMT

Do employee staff in your business? If the answer is yes, this is a reminder that the National Minimum Wage (NMW) and National Living Wage (NLW) rates changed on 1 April 2020; please see the new rates for 2020-2021 year for your information.

National Minimum Wage and National Living Wage rates

The hourly rate for the minimum wage depends on your age and whether you’re an apprentice.

You must be at least:

school leaving age to get the National Minimum Wage
aged 25 to get the National Living Wage - the minimum wage will still apply for workers aged 24 and under

Current rates

These rates are for the National Living Wage and the National Minimum Wage. The rates change every April.

Year	25 and over	21 to 24	18 to 20	Under 18	Apprentice
April 2020 (current rate)	£8.72	£8.20	£6.45	£4.55	£4.15
April 2019 to March 2020	£8.21	£7.70	£6.15	£4.35	£3.90

Apprentices

Apprentices are entitled to the apprentice rate if they’re either:

aged under 19
aged 19 or over and in the first year of their apprenticeship

Apprentices are entitled to the minimum wage for their age if they both:

are aged 19 or over
have completed the first year of their apprenticeship

If you would need details of previous tax years rates for NMW or NLW or for any other information please use the link below for HMRC.

https://www.gov.uk/national-minimum-wage-rates

Tax Efficient Director Salary and Dividends 2020/2021

Wed, 01 Apr 2020 00:00:00 GMT

If you're a Company Director this will explain how to optimise your total earnings for the tax year ending 5th April 2021

This article is designed to provide limited company directors with the knowledge to structure their annual income; to ensure they are being tax efficient when deciding on the split of salary and dividend payments for the new 2020/2021 tax year (6 April 2020 to 5 April 2021).

From our experience this will be of particular interest to contractors, freelance consultants and micro business owners. These types of businesses normally have one or two director(s) & Shareholder(s) and it's exactly what TLA have become experts in advising upon during the last 10 years, therefore we're perfectly placed to support you and your business with the latest tax advice, in order to maximise your earnings.

We will first provide details of the tax free allowances & tax rates that apply to dividends and salary payments; which is set-out below:

Salary Tax Rates for 2020-2021

The personal tax allowance has not been increased this year and remains at £ 12,500; which means the first £ 12,500 of your income is tax free.

£ 12,500 to £ 50,000 - Income Tax Rate = 20%
£ 50,000 to £ 150,000 - Income Tax Rate = 40%
£ 150,000 or more - Income Tax Rate = 45%

Dividends

The annual dividend tax allowance has also not been changed and is £ 2,000; which means the first £ 2,000 of dividends paid is tax free. For dividend payments over £ 2,000 the income tax rates are:

Total Income of Salary and Dividends £ 50,000 (Basic Rate Tax Band) - Dividends Tax = 7.5%
Dividends paid over the Basic Rate Tax Band of £ 50,000 - Dividends Tax = 32.5%
Dividends paid over the Upper Rate Tax Band of £ 150,000 or more - Dividends Tax = 38.1%

What is the most tax efficient level of salary and dividends; it depends:

For company directors the main variable to calculate how much to pay in salary is whether you employ staff in your company or not. Therefore, we have provided two options depending how your business operates.

No Staff are Employed (directors only)

To utilise the annual tax free thresholds, we advise that you pay up to the maximum of £ 50,000 of combined salary and dividends (where possible), before any higher tax rates become payable; this would be broken down using the following remuneration package:

Payment Type Annual Monthly

Salary £ 8,784 £ 732
Dividends £ 41,216 £ 3,434 (Rounded down)

Less Tax Free * : - £ 14,500 - £ 1,208

Dividends Tax Due £ 2,663 £ 222

Total Income £ 50,000 £ 4,166

* This amount of £ 14,500 is the annual income tax free threshold of £ 12,500, plus the £ 2,000 dividends tax free amount for the year.

The advised salary in this example is based on paying up to the Employers National Insurance (NIC's) threshold. This ensures you can offset the salary amount against your company profits and save 19% Corporation Tax, without paying any NIC's and most importantly this will give you a qualifying year towards your future state pension.

Please note that this example is based on paying up to the optimised level of £ 50,000. However, if you were to reduce the dividend payments to a level your business can sustain, you would pay 7.5% dividends tax on any dividends paid above £ 14,500 up to £ 50,000.

Your Limited Company Employs Staff

If your have employees the NIC allowances available are different from the above example, therefore we would need to look into your exact circumstances to provide you with tailored tax advice, to ensure tax efficiency for you and your limited company. We will calculate the split of salary and dividends that is most tax efficient, based on our analysis of your business and employee Income Tax and NIC's payable.

The reason for this is because if your business employs staff, it may be eligible to claim the annual £ 4,000 Employment Allowance (EA); which is a HMRC incentive for small businesses to employ more staff.

If this sounds like your current business position, please contact the TLA Payroll team for a review and we will be happy to assist you.

You will need to ensure you have a registered HMRC Payroll Scheme

Please note, that in order to pay yourself a minimum salary and the rest in dividends, you will require a registered HMRC payroll scheme. The director salary amount(s) must be reported & submitted to HMRC, via an approved payroll system, under Real Time Information (RTI). If you are a TLA client, this will already be in place for you as part of our standard service. However, if you are not yet a TLA client, please call us to discuss your options to ensure you are fully compliant, should HMRC investigate the way that you structure your director salary and dividend payments.

Assumptions for the advice this article :

You are UK resident for tax purposes, with a normal tax allowance of £ 12,500
The only annual income your expect to receive this year is that of salary and dividends, via your limited company

TLA - Self-Employed "Late Bird - Catch up Service"

Sat, 28 Mar 2020 11:42:33 GMT

HMRC have announced that your Self-Employed tax affairs must be up to date in order to claim your Cash Grant.

Therefore, if you have not yet filed your 2019 or earlier years tax returns TLA have created a new package called the Self-Employed "Late Bird - Catch Up Service", where you can bring in your records or provide them electronically to ensure you do not miss out on the cash grant available to you.

To read more about the cash grant that you may be eligible for please read this article https://brinsdon.thelocalaccountant.co.uk/self-employment-income-support-scheme

Filing Deadline - 23 April 2020

Please contact us ASAP if you're self-employed and still need to file your 2019 Tax Return with HMRC. You must do this by 23 April 2020 to be eligible for the Self-Employment Income Support Scheme (SEISS) Cash Grant. We advise you act quickly, so that you do not miss out on your last chance to file with HMRC.

Call us on 01934 440157 or email us at hello@thelocalaccountant.co.uk to discuss your tax affairs today!

Companies House - 3 Month Filing Extension

Wed, 25 Mar 2020 22:31:23 GMT

Apply now for a deferment in filing your company accounts

Limited company businesses will be given an additional 3 months to file there year-end accounts with Companies House. This will help companies avoid penalties due to business closure during the UK Lock down, as the country deals with the impact of Covid-19.

To read more please click on the link to the full article from Companies House below:

https://www.gov.uk/government/news/companies-to-receive-3-month-extension-period-to-file-accounts-during-covid-19

Cash Grants - North Somerset Council - ready for applications

Wed, 25 Mar 2020 22:19:15 GMT

How to claim your Cash Grant

Grants are cash lump sums which do not need to be repaid and will be awarded if the following conditions applied on 11 March 2020.

Small Business Grant Fund – £10,000 cash support to all businesses who are in receipt of Small Business Rates Relief (SBRR) and/or Rural Rates Relief.
Retail, Hospitality and Leisure Grant Fund , split into 2 parts:

£10,000 cash support to all retail, hospitality and leisure businesses with a rateable value of less than £15,000 (but only if they did not already qualify for £10,000 under the SBRR criteria above).
£25,000 cash support to all retail, hospitality and leisure businesses with a rateable value between £15,000 and £51,000.

When?

Funding for the above grants is being made available to all local authorities from early April 2020.

What you need to do to receive your business grant support

To receive this grant you must email North Somerset Council at: n-somersetnndr@liberata.com and provide the following information :

business name (i.e. sole trader or limited company name)
full business property address
company registration number (if you have a limited company registered with companies house)
VAT registration number (if applicable)
account details (bank account number, sort code, business account name)
your business rates account reference (the number on the business rates invoice will begin with either 7000, or 06)
a full contact name, contact phone number and email address

Vat Deferral Payments (Covid-19) Detailed Guidance

Wed, 25 Mar 2020 14:22:57 GMT

VAT Deferral - FAQ's (Frequently Asked Questions)

We have received a bucket load of calls and emails in the past few days in regards to Deferring Vat Payments. The reason for this is due to HMRCs ambiguous & grey guidance provided on their website.

In light of this we have therefore been in contact with HMRC this morning via WebChat to confirm answers to the most common questions being asked; which are detailed below:

1) Do I still have to submit my VAT returns to HMRC?

Yes , all VAT Returns are due to be completed and submitted to HMRC as usual. VAT submissions are due to HMRC 1 month and 7 days after the Quarter End

2) Which VAT periods can I defer payment for my VAT?

The VAT deferral is automatically applied by HMRC for any liabilities declared on the following 3 VAT Quarter Ends:

· Quarter Ended 29th February 2020 (Period covering 1st Dec 2019 to 29th Feb 2020, due to be submitted and paid by 7th Apr 2020)

· Quarter Ended 31st March 2020 (Period covering 1st Jan 2020 to 31st Mar 2020, due to be submitted and paid by 7th May 2020)

· Quarter Ended 30th April 2020 (Period covering 1st Feb 2020 to 30th Apr 2020, due to be submitted and paid by 7th Jun 2020)

Please Note: VAT payments can still be made as usual to avoid building up any unnecessary business debt.

3) If I choose to defer my quarters VAT payment to HMRC when will I have to pay by?

The deferred liabilities for the above 3 Quarter Ends are due to be paid before 31st March 2021

Please Note: As these liabilities are still due to be paid to HMRC, if they are not paid in full by 31st March 2021, you may be fined or surcharges added for late payment.

4) I have an active Direct Debit with HMRC to collect my VAT liability automatically, will they suspend collection for my quarter or should I cancel my DD?

If you have an active Direct Debit (DD) in place for VAT with HMRC and would like to defer your payment, you will need to cancel this with your nominated business bank to stop HMRCs automated system from collecting these payments. You will need to set-up your DD in the future once the deferral period has ended.

For any further information please use the link below for the HMRC guidance of VAT Deferrments:

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

IR35 Reforms delayed until 2021

Wed, 18 Mar 2020 00:00:00 GMT

Great news for Freelancers

HM Revenue and Customs (HMRC) have announced that controversial IR35 reforms that were planned to be implemented from April 2020 have now been delayed until 2021, due to the ongoing Coronavirus (Covid-19) crisis.

Last month the Treasury confirmed it was pushing ahead with its reform to the tax rules, which had been criticised for potentially damaging the incomes of self-employed individuals, using small limited companies to trade under and also removing talented freelancers from the employment market altogether as they checked more permanent & guaranteed employment positions.

What is IR35?

This off-payroll working legislation, known as IR35, which for the past 20 years have prevented people avoiding paying their dues.

Reforms to it were introduced by Chancellor Philip Hammond in last year's Budget and were meant to tackle so-called disguised employment.

This is a term for those who provide freelance services through personal service companies to reduce their tax bills, but who the tax authorities believe should be treated as employees and hence be taxed at source under PAYE.

Who does IR35 apply to?

You may be affected by these rules if you are:

A worker who provides their services via their intermediary
A client who receives services from a worker via their intermediary
An agency providing workers’ services via their intermediary

Why has the legislation been delayed?

The Government has postponed the controversial reforms to the IR35 tax rules until 2021.

The reason for this delay is largely because the government is trying to alleviate pressure on individual and businesses amid the Covid-19 outbreak.

Theses changes will mainly affect those working in the private sector, such as Electricians, Business Consultants, IT workers and management consultants, who pay less tax by trading via a limited company.

If the rules apply, Income Tax and National Insurance Contributions must be deducted from any income received and paid over to HMRC.