LOOKING FORWARD TO 2021
2020 has been a tough old year, hasn't it?
But with an end in sight with these vaccines, hopefully there will by some sense of normality by Q2. Who knows what "normal" will look like, but we can hope it will enable individuals and businesses to bounce back and the economy to remain stable rather than fall into a recession.
Our December newsletter usually has a picture of everyone in the office with their Christmas jumpers on, but we have a virtual zoom picture instead to entertain you :)
We will be closed for the Christmas period from lunchtime on Wednesday 23rd December, reopening on Monday 4th January.
Emails will not be responded to during this time of closure; and any deadlines for December payroll and VAT returns will be sent out imminently so that plenty of notice is given.
Finally, we would like to wish you a very "Merry Christmas" and look forward to working with you in 2021.
If you have missed any of our previous newsletters, then our website has a backlog of them here.
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SELF EMPLOYED INCOME SUPPORT SCHEME (SEISS) GRANT NOW OPEN
The rules on who is eligible to claim are different to those for the previous SEISS grants.
However, a Self Assessment tax return for the tax year 2018-19 showing self-employment income (unless one of the existing exceptions applies) will still need to have been submitted in order to claim.
The third grant will be based on 80% of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500, and will cover the period from 1/11/20 - 29/1/21.
As previously, the third grant will also be subject to Income Tax and self-employed National Insurance and must be reported on 2020-21 SATRs, due by 31/01/22.
To make a claim for the third grant, claimants must – as previously:
• be self-employed or a member of a partnership – they cannot claim the grant if they trade through a limited company or a trust
• have traded in both the tax years 2018 to 2019 and 2019 to 2020.
For this third SEISS grant claimants must also now:
• either be currently trading but are impacted by reduced business activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus
• declare that they intend to continue to trade, or restart trading, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits
• only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not make a business eligible for the third SEISS grant.
When deciding whether the reduction is significant, claimants will need to consider their wider business circumstances.
Their business must have been impacted on or after 1/11/20. Claimants must keep evidence that shows how their business has been impacted by coronavirus, resulting in reduced activity, capacity or demand, or a temporary inability to trade.
More information and examples are available here - https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#howmuch
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HOW ABOUT A VIRTUAL CHRISTMAS PARTY?
HMRC are not the Grinch after all. They have recently announced that employers may arrange a “virtual” Christmas party this year and there will be no taxable benefit for employees provided that all staff are invited and the cost per head does not exceed the normal £150 limit.
Maybe keep it to a modest affair and let’s have a big bash when the Coronavirus pandemic is over as we are allowed more than one event a year within the £150 limit.
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PLUS CHRISTMAS GIFTS OF UP TO £50 TO EMPLOYEES
If we produce your year end Limited Company accounts, you no doubt have us asking about "Trivial Benefits".
Remember that certain gifts to staff at Christmas are tax free if structured correctly. Employers are allowed to provide their directors and employees with certain "trivial" benefits in kind tax free.
This exemption applies to small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers.
There are of course a number of conditions that need to be satisfied to qualify for the exemption.
Conditions for the exemption to apply
- the cost of providing the benefit does not exceed £50
- the benefit is not cash or a cash voucher
- the employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme
- the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)
We recommend vouchers for John Lewis or Amazon as an easy gift, as employees can purchase a range of products to suit their needs.
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