Filing accounts – a three-month extension

Businesses are being given an additional three months to file their accounts as they work to deal with the impact of COVID-19.

The joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of the crisis and it will also help them avoid penalties.

There are approximately 4.3 million businesses on the Companies House register and they must submit their accounts and reports each year.

Under normal circumstances, companies that file accounts late are issued with an automatic penalty.

However, as part of the agreed measures, while companies will still have to apply for the three-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension.

Applications can be made through a fast-tracked online system which the government says will take just 15 minutes to complete.

Full guidance on applying for an extension can be found at:

https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts

Companies that have already extended their filing deadline, or shortened their accounting reference period may be ineligible for an extension.

The government says the policy will be kept under review and “amended as necessary” in light of the progress of the COVID-19 pandemic.

Companies House chief executive Louise Smyth said: “We recognise that these are uncertain times for businesses and that’s why we’re doing all we can to help.

“By easing the burden, we can help businesses through this period and enable them to thrive in the future. I would encourage companies who believe they would benefit from this new flexibility to make an application in good time.”

The government is also in close consultation with company representative bodies, legal practitioners and others, to look at solutions for the impact COVID-19 may have on companies’ ability to hold Annual General Meetings. And it says that updated guidance on this matter will be published in due course.

To discuss this filing extension and any issues that you are facing as a result of coronavirus and how you can access support please contact WNJ on 01772 430000.

VAT deferral – an update

Businesses and sole traders that make VAT payments to the HMRC by direct debit are being advised to cancel the arrangement to ensure they take advantage of the government’s deferral scheme.

The government is looking to support the economy during the coronavirus pandemic by deferring payments from March 20 until June 30.

VAT-registered businesses and individuals will not need to make a payment during this period and this is an automatic offer with no applications required.

Cancelling any direct debit will ensure that payments aren’t automatically processed. However, they will also need to remember to set up the direct debit for future VAT returns.

And they should also continue to prepare their VAT returns as normal and submit them on time.

VAT-registered businesses and individuals will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period.

VAT refunds and reclaims will be paid by the government as normal.

For more information about the government’s support for business during the coronavirus crisis visit: www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

To discuss any issues that you are facing as a result of coronavirus and how you can access support please contact WNJ on 01772 430000. We are here for you.

Taxation support

Deferring VAT and Income Tax payments

Chancellor Rishi Sunak has announced the next quarter of VAT payments will be deferred until the end of June – a move he says will inject £30bn into UK businesses during the coronavirus crisis.

Making the announcement the Chancellor declared that the package aimed: “To help businesses pay people and keep them in work.”

The VAT deferral will apply from March 20 until June 30. Businesses will not need to make a payment during this period.

VAT-registered businesses and individuals will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period.

VAT refunds and reclaims will be paid by the government as normal.

If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. No penalties or interest for late payment will be charged in this period.

‘Time to Pay’ Scheme

HMRC has a set up a dedicated phone helpline to support businesses and self-employed people concerned about not being able to pay their tax bill due to coronavirus.

The government has also announced that during the outbreak the usual 3.5 per cent annual interest on deferred tax payments will be waived.

It is among a package of measures introduced in a bid to support businesses struggling to cope with the impact of the pandemic.

HMRC says the new hotline is a way for any business or self-employed individual concerned about paying their tax as a result of the crisis to get practical help and advice.

HMRC has drafted in up to 2,000 “experienced call handlers” who it says are available to support businesses and individuals when needed.

For those who are unable to pay their bill due to coronavirus, the taxman will discuss their specific circumstances to explore:

• Agreeing an instalment arrangement
• Suspending debt collection proceedings
• Cancelling penalties and interest where there are administrative difficulties contacting or paying HMRC immediately

HMRC says that each case will be negotiated on an individual basis, with bespoke Time to Pay arrangements. The helpline number is 0800 0159 559.

It is critically important that businesses that are facing these difficulties address the situation as soon as they can.

In most case, when it comes to Time to Pay the business involved will need to put its repayment offer in writing and produce information on its cash flow. Getting that negotiation right is also important.

Support for Sole Traders

A number of initiatives have been introduced to support sole traders through these tough times – though pressure is growing on ministers to do more to help the self-employed. Further announcements are expected later today.

Pleas are growing for the government to give more financial assistance to freelancers, contractors and sole traders, whose businesses have been massively hit by the COVID-19 crisis.

What has been done so far? The deferral of VAT and Income Tax payments and grant funding covered elsewhere in this newsletter may be of help.

There are also changes to sick pay, aimed at giving assistance to sole traders. The Minimum Income Floor in Universal Credit is being suspended ‘for everyone affected by the economic impacts of coronavirus’.

The move means that self-employed people can now access Universal Credit at a rate equivalent to Statutory Sick Pay for employees – approximately £95 a week.

The ‘new style’ Employment and Support Allowance will be payable for people directly affected by COVID-19 or self-isolating according to government advice from the first day of sickness, rather than the eighth day.

People will also be able to claim Universal Credit and access advance payments where they are directly affected by COVID-19 or self-isolating, without the current requirement to attend a Jobcentre.

Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of Covid-19, including through payment holidays of up to three months.

This will give people the necessary time to recover and ensure they do not have to pay a penny towards their mortgage in the interim.

It has also been announced that the proposed rollout of IR35 to the private sector in April has been postponed for one year as a result of COVID-19.

It is a delay that will be welcomed in most quarters. Even before the current situation there had been calls for the measures to be put on hold ( https://wnj.co.uk/ir35-delay/)

Coronavirus – your guide to available support

A massive £350bn package of government support to help businesses survive the impact of the coronavirus pandemic has been unveiled as the crisis deepens. But what does it mean for your business – what help is out there for you?

To try and make things clearer, we’ve produced this guide to some of the unprecedented initiatives that the government has unveiled as it battles to shore up the economy and protect the future of businesses and jobs in all sectors.

Please get in touch with WNJ – we are here to help and support you as you face whatever problems and challenges this crisis brings.

We can advise on what financial support is out there and how to access it quickly and we will work with you throughout the crisis to help you navigate your business through these difficult times.

To discuss any issues that you are facing as a result of coronavirus and how you can access support please contact WNJ on 01772 430000. We are here for you.

Grant and Loan Support

The Coronavirus Business Interruption Loan Scheme – offering loans of up to £5million for SMEs through the British Business Bank – is launching this week.

The aim is to support the continued provision of finance to the UK’s small and medium sized businesses during the Covid-19 outbreak.

The government says it will provide a guarantee of 80 per cent on each loan – subject to a per-lender cap on claims – to give lenders further confidence in continuing to provide finance to SMEs.

In addition, the government has announced that it will not charge businesses or banks for this guarantee, which will potentially enable a ‘no’ credit decision from a lender to become a ‘yes’.

Businesses can access the first 12 months of the finance interest free, as government will cover the first 12 months of interest payments. The business remains liable for repayments of the capital.

You are eligible for the scheme if your business is UK-based, with turnover of no more than £45m per year and meets the other British Business Bank eligibility criteria.

The full rules of the scheme and a list of accredited lenders is available on the British Business Bank website (www.british-business-bank.co.uk).

All the major banks will offer the scheme once it has launched. There are 40 accredited providers in all.

You should talk to your bank or finance provider – not the British Business Bank – as soon as possible and discuss your business plan with them.

This will help your finance provider to act quickly. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

Retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme will provide businesses in these sectors with a cash grant of up to £25,000 per property.

Businesses with a rateable value of under £15,000 will receive a grant of £10,000. Those with a rateable value of between £15,001 and £51,000 will receive £25,000.

The aim is to support retail, hospitality and leisure businesses hit by the crisis. Properties eligible range from cafes and shops to cinemas, hotels and self-catering holiday accommodation.

Businesses don’t need to do anything to access the scheme. Local councils will write to them if they are eligible.

Other measures being introduced include:

• Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. Your local authority will write to businesses if they are eligible

• A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans

Support for Employers

Coronavirus Job Retention Scheme

Chancellor Rishi Sunak has appealed to employers to “stand behind” their workers during the coronavirus crisis – and has backed that call with help for them to pay the salaries of staff.

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of the salary of employees that would otherwise have been laid off.

The scheme will cover 80 per cent of a regular salary up to £2,500 a month, which is just above the median income. All UK businesses are eligible.

To access the scheme, you will need to:

• designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
• submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. The HMRC says it will set out further details on the information required

The taxman is also “working urgently” to set up a system for reimbursement as its existing systems are not set up to facilitate payments to employers.

Employers can top up salaries further if they choose to. Detailed guidance is on its way and will make things clearer.

Statutory Sick Pay relief package for SMEs

The government is bringing forward legislation to allow SME businesses and employers to reclaim Statutory Sick Pay (SSP) for absence caused by COVID-19.

The refund will cover up to two weeks’ SSP per eligible employee who has been off work because of coronavirus.

The package is for employers with fewer than 250 staff – the size of an employer will be determined by the number of people they employed as of February 28 this year.

A rebate scheme is being developed. Further details will be provided once the legalisation has passed.

Employers will be able to reclaim expenditure for any employee who has claimed SSP, according to the new eligibility criteria, as a result of COVID-19

They should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.

If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website.

The eligible period for the scheme will start the day after regulations on the extension of SSP to those staying at home comes into force.

The government has said that it will work with employers over the coming months to set up the repayment mechanism as soon as possible.

WNJ and the coronavirus situation

The impact of the Coronavirus (COVID-19) pandemic is already being felt in businesses of all sizes and in all sectors of the economy. It is of obvious concern to WNJ’s clients and colleagues.

We would like to assure everyone that the health and safety of our clients and staff remains our top priority.

We are taking appropriate actions to help keep our workplace healthy, while maintaining our high levels of customer service.

And we have the necessary procedures in place to ensure that we adhere to the latest guidelines, which we continue to monitor closely.

Our partners and colleagues are currently maintaining their usual work patterns.

However, we have a robust and tested IT infrastructure and plans in place so that our team are able to work remotely from their homes, with minimal interruption to our ability as a business to provide support to our clients.

We have already taken practical steps such as reducing face-to-face meetings.

The government has indicated it could take up the three months for the COVID-19 epidemic to reach its peak in the UK.

We are continuously monitoring the official information and we have contingency plans in place if matters escalate, so that we can continue to service our clients and reduce the impact on our business.

And we will keep you fully informed of any changes we are making to our processes and way of working.

These are challenging times and we are here to help you minimise the impact of the situation on your business.

Please contact me on me on 01772 430000 to discuss any concerns you may be having.

Deadline changes for capital gains

Property owners have been reminded by the taxman about important deadline changes when paying Capital Gains Tax.

From April 6, if a UK resident sells a residential property in this country, they’ll now have 30 days to tell HMRC and pay any money owed.

If customers don’t inform HMRC about any Capital Gains Tax within 30 days of completion, they may be sent a penalty as well as having to pay interest on what they owe.

The change means that for some people this can be done without having to register for Self Assessment.

The change has been a long time coming. The measure was first announced in the 2015 Autumn Statement. Its introduction was deferred until April 2020 in the 2017 Budget and 2018 saw a technical consultation undertaken.

A capital gain can arise when a property is disposed of. A disposal will typically be where the property is sold by the owner, but it also applies where a property is inherited and then disposed of, or where a property is gifted.

Owners may need to make a Capital Gains Tax report and make a payment when, for example, they sell or otherwise dispose of:

• a property that they’ve not used as their main home
• a holiday home
• a property they let out for people to live in
• a property that they’ve inherited and have not used as their main home

UK residents won’t have to make a report and make a payment when:

• a legally binding contract for the sale was made before April 6 2020
• they meet the criteria for full Private Residence Relief
• the gift was made to a spouse or civil partner
• the gains (including any other chargeable residential property gains in the same tax year) is within their tax-free allowance (called the Annual Exempt Amount)
• they sold the property for a loss
• the property is outside the UK

If customers don’t inform HMRC about any Capital Gains Tax within 30 days of completion, they may be sent a penalty as well as having to pay interest on what they owe.

Sarah Kelsey, HMRC’s deputy director, says: “People don’t usually have to pay Capital Gains Tax if they sell the house they live in, but this is a significant change for customers who do have to pay the tax and who up to this point would include the gain in their Self Assessment return.”

There are also changes for non-UK residents selling both residential and non-residential property in this country.

Non-UK residents will still be required to tell HMRC within 30 days whether there is tax to pay or not and will no longer to be able to defer payment via their Self Assessment return.

To discuss this issue and how it may affect you please call me on 01772 430000

Do you need time to pay?

HMRC has a set up a dedicated phone helpline to support businesses and self-employed people concerned about not being able to pay their tax bill due to coronavirus.

And the government has also announced that during the outbreak the usual 3.5 per cent annual interest on deferred tax payments will be waived.

It is among a package of measures introduced in a bid to support businesses struggling to cope with the impact of the pandemic.

HMRC says the new hotline is a way for any business or self-employed individual concerned about paying their tax as a result of the crisis to get practical help and advice.

And it has drafted in up to 2,000 “experienced call handlers” who it says are available to support businesses and individuals when needed.

For those who are unable to pay their bill due to coronavirus, the taxman will discuss their specific circumstances to explore:

• Agreeing an instalment arrangement
• Suspending debt collection proceedings
• Cancelling penalties and interest where there are administrative difficulties contacting or paying HMRC immediately

HMRC says that each case will be negotiated on an individual basis, with bespoke Time to Pay arrangements. The helpline number is 0800 0159 559.

It is critically important that businesses that are facing these difficulties address the situation as soon as they can.

In most case, when it comes to Time to Pay the business involved will need to put its repayment offer in writing and produce information on its cash flow. Getting that negotiation right is also important.

If you are concerned about your tax liabilities, need advice about Time to Pay arrangements and if it is the right path for you or are worried about the impact of coronavirus on your business please give me a call on 01772 430000