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Moore Accountancy July 2020 Newsletter
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Moore Accountancy Update


SUMMER STATEMENT

This month the "Mini Budget" was issued by Rishi Sunak.
Our blog post here details the key measures which will affect our clients.

Some of these may be gimmicks but overall we hope that they will help support jobs and the hospitality sector.

The difficulty is finding the middle ground when there are people who have suffered virtually no negative financial effects due to C-19, whereas others have suffered so badly that their livelihoods may not recover for many years. 

Will the "Meal Deal" persuade those who feel eating out in restaurants is unsafe, to actually go out? For those in the hospitality industry - look out on Monday 13th for Government information on how to sign up for the 50% scheme which happens throughout August.

Furlough was complicated, Flexible furlough is even more complicated, and now the Job Retention Bonus will add another level of disclosure to payroll - it will be interesting to see if this bonus helps keep furloughed employees in employment or whether businesses with limited or no income will make staff redundant, regardless.

I do however like the green innovations that were declared. Moore Accountancy are big promoters of community recycling and other green initiatives, so support for homeowners and landlords to install energy efficient measures is a positive.

Finally, with the reduction in VAT from 20% to 5% for supplies of food and non alcoholic drinks from cafes, bars and similar premises; it is important that relevant businesses ensure their till software is updated, and their menus are amended if pricing is changed.

For VAT registered business owners who have travel and subsistence claims, you will need to check that the VAT is claimed at the correct rate on your bookkeeping software or spreadsheets.

Whilst these short term measures should contribute to a boost to the economy, it will be interesting to see what the Autumn Statement holds as a blueprint for a real economic plan for our country, and of course how the Chancellor expects us to pay for everything.


Separately, businesses eligible for the first Self Employment Income Support Grant (SEISS) v1 (March to May 20), must make their claim online by Monday 13/07/20. The next installment will be open in August for claims.

If you have missed any of our previous newsletters, then our website has a backlog of them here.

“FLEXIBLE FURLOUGH” STARTED 1 JULY

From 01/07/20 the new CJRS “Flexible furlough” grant scheme began, which allows employers to gradually bring their furloughed employees back to work part-time. The new scheme will be in place until the end of October and the Government will gradually reduce the amount of grant towards employees’ furlough pay to 70% in September and 60% in October.

The grant paid by the Government via HMRC will remain at 80% of the employee’s normal pay for July and August but they will stop reimbursing NICs and pension contributions from 1 August 2020

Only those employees who have been furloughed and included in a claim under the original CJRS scheme may be included in a claim for the new flexible furlough.
 
A further restriction is that the maximum number of employees that can be included in a flexible furlough claim cannot exceed the maximum number included in a claim under the original scheme. Thus if the employer has 8 employees split into teams of 4 and furloughed team A for three weeks and then team B for 3 weeks the maximum number of employees that can be included in a flexible furlough claim will be limited to 4.

Unlike the original CJRS furlough scheme there is no minimum furlough period as the intention is to allow employers the flexibility to gradually bring employees back to work. The hours/days worked will need to be agreed between employee and employer which is likely to involve amending the employees’ contracts.

Employees will be entitled to their normal contractual pay for the hours that they work and must be paid at least 80% of their normal pay for the hours that they are furloughed, even when HMRC are only reimbursing 70% or 60%.

Employers will need to notify HMRC of the employee’s usual hours and the hours worked in the claim period. The furloughed hours will be the difference. This will be complicated where the employee’s hours vary.

There is currently a lack of clarity in the HMRC guidance on the calculation of “usual hours” and we will of course be available to assist you in making your claim.
Each claim made must be for a week or more and no claim period can straddle a calendar month end.
 
Like the original furlough scheme claims cannot be made more than 14 days in advance.

You should have received an email about this from Lucy if we run payroll for you.
PROTECTING YOUR BUSINESS AGAINST FRAUD

In these uncertain times, businesses are combatting an increased amount of fraud.

Throughout recent months, there have been widespread reports of an uptick in fraudulent websites, charity scams and fake emails purporting to be from banks, etc. This increase is being driven by opportunists who are attempting to take advantage of the confusion and change of circumstances resulting from the current global pandemic.

We have seen emails pretending to be from HMRC with requests for bank details for grants as well as others demanding payments of debts, which causes an already stressful situation much worse.

In order to protect against fraud, businesses should carry out a risk assessment. This should include an assessment of any IT risk that could arise through remote working. Cyber security measures should be put in place including firewalls, anti-malware and anti-virus software. This software should be kept up to date. 

All staff should be trained on how to spot fraudulent emails and should be provided with clear guidelines on what to do if they spot a fraudulent email. For example – check email addresses to see if they look suspicious, report the suspicious email to the IT manager, delete the email, etc.

On the financial side of things, regular audits should be undertaken. Access to the firm’s bank accounts, online banking facilities and payment systems should be restricted to a limited number of people. An authorisation / approval process should be put in place for all payments over a certain amount, if you are not a one person business.

Computers, company mobiles, phones and devices should all be password protected. All staff should be trained on how to create a secure password and a process should be put in place which means that all passwords are updated on a regular basis. 

Even if you implement these measures, your business could still be the victim of fraud or cyber crime. Make sure that you have appropriate insurance policies in place so that your business is protected against any losses incurred from crimes such as fraud.
SELF-EMPLOYED GRANT SCHEME - ADVERSELY AFFECTED

HMRC has updated its guidance on whether a business has been “adversely affected” by coronavirus and therefore able to claim for the two Self-employed Income Support Scheme (SEISS) grants.

On 12/06/20 HMRC published examples to show when the “adversely affected” criteria for the first and second SEISS grants will be met. It confirms that those who are self-employed and able to return to work as normal in June will not be eligible for a second grant, although they can claim a grant for the first period.

As mentioned last month, a second and final grant can be claimed in August 20. It is worth 70% of average monthly trading profits, and will also be paid out in a single instalment covering three months’ profits and is capped at £6,570. While eligibility for the second grant is the same as the first grant, it is a separate claim and those claiming will have to confirm their business has been adversely affected by COVID-19 on or after 14/07/20.

HMRC’s guidance gives the following examples of when a business might be adversely affected:
The business owner is unable to work because they:
  • are shielding, self-isolating, on sick leave because of coronavirus, or have caring responsibilities because of coronavirus.
The business has had to scale down or temporarily stop trading because:
  • the supply chain has been interrupted,
  • there are fewer or no customers or clients, or
  • staff are unable to come in to work.
This list is not exhaustive; another example might be additional costs incurred to enable the business to comply with physical distancing requirements.

To summarise: if the business is adversely affected in the period up to 13/07/20 they can claim the first grant, if they are adversely affected in in the period from 14/07/20 they can claim the second grant. When the Chancellor announced the scheme he referred to the first grant as covering March to May 2020 but the position subsequently changed: the grants are for nominal three month periods with entitlement based on whether the business is adversely affected in the period to 13/07/20 or after that date.


 

REINSTATE VAT DIRECT DEBITS
The deferral of VAT payments due to coronavirus came to an end on 30/06/20 and businesses need to take action to reinstate their direct debit mandates.

The VAT payment deferral meant that all UK VAT-registered businesses had the option to defer VAT payments due between 20/03/20 and 30/06/20 until 31/03/21.

We are reminding businesses that they need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due in July 2020 onwards. Generally direct debit mandates usually need to be set up three working days before a VAT return is filed.

We cannot set up direct debit mandates on behalf of clients; the business needs to set up the mandate through their business tax account.

Arrangements will also need to be made to pay the deferred VAT by 31 March 2021.

FURTHER BUSINESS SUPPORT
 
Continuing from the duet recommendation, here are two links which may help your business, provided by our clients:
A further point regarding the duet display app.

If you are using a Mac with macOS Catalina (the latest version of macOS), and an iPadOS 13, you can use the built in Sidecar feature : https://support.apple.com/en-us/HT210380

As it is all built into the operating systems, it is free of charge. 

These tips and tools are great, so please continue to share them with us for inclusion in future newsletters :)

 

KEY DATES

19/07/20 - PAYE & NIC deductions for month ended 05/07/20 (June payroll) 

31/07/20 - Corporation tax due for year to 31/10/19 

31/07/20 - Notify your pension fund administrator by this date if the additional tax on the Pension Annual Allowance Tax charge for 2019/20 is £2,000 or more and you would like the tax paid out of your fund 

31/07/20 - 50% payment on account of 2020/21 tax liability due. However, due to Covid-19 taxpayers may defer the payment until 31/1/21 without incurring interest and penalties. 

19/08/20 - PAYE & NIC deductions for month ended 05/08/20 (July payroll) 

31/08/20 - Corporation tax due for year to 30/11/19 


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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