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Moore Accountancy November 2020 Newsletter
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Moore Accountancy Update

 Photo by blueberry Maki on Unsplash
IT'S LIKE THE HOKEY COKEY...

Local Lockdown, Tier 2, Tier 3, Lockdown 2.... it's been a confusing few months for us all trying to survive and keep up to date with what the Government expect us to comply with.

The variations on support for businesses has also been like a rollercoaster with us sending out emails to clients with updates on payroll schemes only for them to change a few days later.

Trying to keep abreast is a constant goal - especially when we find out the headlines from Live news updates as clients do, and then have to wait for the Government to issue the details for us to work through. Fingers crossed things will quieten down for the next few months!

December is a shorter working month for us, as Moore Accountancy close from 23/12/20 until 04/01/21.
Luke and Lucy will be running payroll and filing VAT returns earlier than usual; so will be contacting relevant clients separately regarding pay dates and VAT return filing dates.

Finally as a reminder and per the emails that Susie has sent previously to our clients regarding Self Assessment:
  • Clients who submit their information between 01/11/20 and 06/12/20 will pay an additional 10% fee.
  • Clients who submit their information between 06/12/20 and 03/01/21 will pay an additional 20% fee.
  • Clients who submit their information after 03/01/21 and want it submitting before the 31st January deadline will pay an additional 30% fee
  • Note, where clients have foreign income with reliance on tax deadlines being different from the UK, or sole trader earnings which are an irregular year end; that the above fees will not apply as long as all other information is received in advance
If you have missed any of our previous newsletters, then our website has a backlog of them here.

MORE TIME TO PAY TAX DUE ON 31 JANUARY 2021

As mentioned in the last newsletter, those taxpayers who may have difficulty paying the tax due under self-assessment on 31/01/21 can agree more time to pay with HMRC provided the amount outstanding is no more than £30,000.

The government have already agreed that amounts due under self-assessment on 31/01/20 could be deferred until 31/01/21 but this latest announcement generally allows a further 12 months to pay.

Remember that interest is still due on all balances outstanding after 31/01/21.

You can either set up a payment plan online by logging into your HMRC online personal tax account or call the HMRC Payment Support Service.

See link here to apply to create a payment plan for your tax bill - https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments
DEFERRAL OF VAT PAYMENTS DUE TO C19

On 24/09/20, the Chancellor announced that businesses who deferred VAT due from 20/03/20 to 30/06/20 will now have the option to pay in smaller payments over a longer period.

Instead of paying the full amount by 31/03/21, you can make smaller payments up to the end of March 2022, interest free.

You will need to opt-in to the scheme by contacting HMRC. 

Those that can afford to pay their deferred VAT can still do so by 31/03/21.

If you are still unable to pay the VAT due and need more time, contact HMRC by phoning: 0300 200 3835.
GET READY FOR LEAVING THE EU ON 
01/01/21

 

The UK leaves the EU at 11pm on 31/12/20 when the transitional period ends. It is still unclear whether a trade deal will have been agreed with the EU by that date, and such an agreement is looking increasingly unlikely.
HMRC have started writing to businesses alerting them to important changes from 01/01/21 and suggesting that they have new procedures in place if they wish to trade with the EU from that date.

In particular, businesses will need to submit declarations when importing and exporting goods that are categorised as ‘controlled’. Import processes for non-controlled goods will be phased in over a 6 month period. ‘Controlled’ goods include alcohol, explosives and certain drugs.

OBTAIN AN EORI NUMBER
If you have been trading internationally you should already have an Economic Operator Registration and Identification (EORI) number. You will need this to complete customs declarations. If you do not yet have one, you can register for free by going to www.gov.uk/eori

Businesses need to decide how they are going to make customs declarations. Customs agents, freight forwarders and express operators can help with declarations and ensure the business is providing the necessary information.

IMPORTS OF GOODS SUBJECT TO STAGED CONTROLS 
Most traders with a good compliance record will be able to defer import declarations on most goods for up to 6 months after 01/01/21 depending on the nature of the goods.

KEY VAT ISSUES AT THE BORDER
Businesses will need to decide how they will account for import VAT when they make a customs declaration. From 01/01/21, businesses will be able to use postponed VAT accounting to account for import VAT on their VAT Return for goods imported from anywhere in the world. 

They will also need to check if Import VAT is due at the border.  Import VAT will not be due at the border if goods in a consignment do not exceed £135 in value. The only exceptions will be excise goods and gifts.

WHAT TARIFFS APPLY FROM 1 JANUARY?
From 01/01/21, there will be new rates of Customs Duty for imports - called the UK Global Tariff.  
The Tariff rates for transactions with the EU will depend upon whether or not a deal is reached. For example, if there is no deal with the EU the Tariff on motor cars will be 10% so many car dealers are suggesting that business should consider acquiring a new vehicle before 01/01/21. To check the tariffs that will apply to goods you import, go to www.gov.uk/guidance/uk-tariffs-from-1-january-2021

Moore Accountancy are not VAT specialists, but can direct you to a third party should the need arise.
Government help is available, and we encourage you to:
1.    Check what actions you need to take by visiting gov.uk/transition
2.    Sign-up for updates. 
3.    Attend government webinars for additional support, you can sign up to attend BEIS webinars now. 
 
“FURLOUGH” SCHEME EXTENDED AT 80% USUAL PAY

Originally the CJRS “furlough” scheme was to end on 31/10/20 to be replaced by a new Job Support Scheme (JSS).

However, when "lockdown 2" was announced, it was decided that the CJRS furlough scheme would be extended for one further month with employers able to claim a grant of 80% of employees’ usual pay for hours that they are unable to work.

Employers will be responsible for paying NICs and pension costs.

The replacement JSS Open and Closed Schemes, will start when the extended CJRS ends.


On 05/11/20 Sunak stated that the extended scheme would remain until March 2021 but would be reassessed in January 2021. Due to this extension the Job Retention Bonus will not go ahead.


Details of the calculation for the extended scheme have not been issued by the Treasury yet, so we will update Payroll clients when we know more regarding the basis of average earnings.
SELF EMPLOYED INCOME SUPPORT SCHEME (SEISS) ALSO IMPROVED
 
In his Winter Economy Plan the chancellor announced that SEISS grants would continue to be available, but at only 20% of average profits for the period to 5 April 2019.  

On 22/10/20 the Chancellor increased the amount of the third three month grant to 40% of average profits, capped at £3,750. 

On 02/11/20 he made a further announcement that the grant would increase to 80% (just for Nov) meaning an average of 55% for the three months to 31/01/21, resulting in a cap of £5,160.


On 05/11/20, he extended it further to be 80% for Nov, Dec and Jan, capped at £7,500.

However there has been no change to the basis of grant - it is still based on 2018/19 data, so newer self employed are still disadvantaged.
UPDATE ON GOVERNMENT SUPPORT
 
Mortgage payment holidays -
Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a 6 month holiday, and those that have already started a mortgage payment holiday will be able to top up to 6 months without this being recorded on their credit file.

Business Grants -
Businesses required to close in England due to local or national restrictions will be eligible for the following:

•    For properties with a rateable value of £15k or under, grants to be £1,334 pcm, or £667 per 2 weeks;
•    For properties with a rateable value of between £15k-£51k grants to be £2,000 pcm, or £1,000 per 2 weeks;
•    For properties with a rateable value of £51k or over grants to be £3,000 pcm, or £1,500 per 2 weeks.

Your local council should be contacted to obtain these grants.

STILL CONSIDERING AN ELECTRIC COMPANY CAR?
 
There is currently a 0% P11d benefit for the drivers of electric cars in 2020/21. The legislation for this change is included in Finance Act 2020 which also states that the benefit will be 1% of list price in 2021/22 and then 2% in 2022/23.

The zero taxable benefit also applies to hybrid cars emitting no more than 50 grams of CO2 per kilometre with a range using its electric motor of at least 130 miles, but only for cars first registered on or after 06/04/20. Unfortunately, the range of most plug in hybrids is considerably less than 130 miles. For example, the Mercedes A 250e costing £32,980 emits 26g CO2 but has a PEV range of only 45 miles.

An additional benefit for the business is that motor cars that emit no more than 50g CO2 per kilometre currently also qualify for a 100% first year allowance (FYA) which means that the full cost can potentially be set off against business profits.  

The Mercedes A 250e would currently qualify for a 100% FYA but the P11d benefit would be 6% for the employee in 2020/21.

The 50g CO2 threshold reduces to zero from April 21 which means that hybrids will cease being eligible for the 100% write off. If the business can afford to do so it’s a good time to buy a plug in hybrid.

Note the VAT on the purchase is only claimable if the car is a pool car rather than a company car, so will generally NOT be recoverable by the company.

KEY DATES
 
19/11/20 - PAYE & NIC deductions for month ended 05/11/20 (October payroll) 

30/11/20 - Corporation tax due for year to 29/02/20 


19/12/20 - PAYE & NIC deductions for month ended 05/12/20 (November payroll) 

23/12/20 - Last date for signed/approved SATRs to be received by Moore Accountancy in order to request that HMRC collect outstanding tax via the 2020/21 PAYE code

31/12/20 - Corporation tax due for year to 31/03/20 


For any businesses struggling with payments, please contact HMRC to see if they will agree a Time To Pay arrangement - https://www.gov.uk/difficulties-paying-hmrc
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Moore Accountancy · 1 Northway · Altrincham · Cheshire, WA14 1NN · United Kingdom

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