As lockdown continues to ease over most of the country, we thought we would bring you up to speed with all things tax.
VAT deferral scheme
The VAT payments deferral scheme came to an end on 30 June 2020. If you were one of the VAT registered businesses that deferred your VAT payments between 20 March 2020 and 30 June 2020 you now need to make plans for meeting your payment by 31 March 2021.
If you have the money sitting in your account, it might be a good idea to settle your VAT liability now so that you know where you stand with your cash flow. If you do not have the money right now, it is worth planning how this money will be found.
If you cancelled any Direct Debits, allow enough time to set these back up in time for payment.
You must continue to submit VAT returns as normal and on time and pay any VAT payments in full due after 30 June.
Bounce Back Loan Scheme – ACT NOW!
The Bounce Back Loan Scheme is still open for new applications, but we do not expect it to remain open very much longer. You can borrow between £2,000 and up to 25% of your turnover (maximum £50,000). There is no interest to pay for the first 12 months and after that it is only 2.5% a year.
However, if you do take out a loan, you could find that if you apply personally for a mortgage, then you may only be allowed to borrow a reduced amount.
If you feel your business could benefit from having the safety net of a loan, or would like to discuss it further then please get in touch.
Self-Employment Income Support Scheme – ACT NOW!
Applications for the second and final grant are now open and will close on 19th October 2020.
If you are eligible, you could claim 70% of your average monthly trading profits which will be paid out in a single instalment – this is capped at £6,570.
You can make a claim even if you didn’t claim the first grant.
The grant does not need to be repaid if you are eligible, but is subject to tax and self-employed NI.
Unlike the furlough scheme, it is possible to claim for this second grant, even if the first grant was not claimed.
This continues to run until the end of October with the changes as follows:
- August – HMRC will pay 80% of wages up to a maximum of £2,500. The cost of Employers NI and Pensions will not be refunded
- September – HMRC will pay 70% of wages up to a maximum of £2,187.50. The cost of Employers NI and Pensions will not be refunded
- October – HMRC will pay 60% of wages up to a maximum of £1,875.00 The cost of Employers NI and Pensions will not be refunded
Flexible furlough is also available to any employee who has been furloughed prior to 10th June 2020. For the hours/days that these employees work, they should be paid their agreed rate of pay with the remainder of their usual hours being paid at the above furlough percentages.
Any holiday taken must be paid at 100% of an employee’s normal rate of pay.
Redundancy – hopefully this is a last resort but if you are considering making any employees redundant, seek advice prior to any steps taken.
Grants for Rural Businesses
Small businesses are set to benefit from a new wave of government grants to help recover from the impact of coronavirus through access to professional advice – this includes advice from accountants, lawyers and HR experts as well as equipment and technology. Grants available are between £1,000 and £5,000.
Funding can be accessed within your Local Enterprise Partnership area. Each area has been awarded a minimum of £250,000 to get the programme rolling.
For more information visit the Gov.uk website: https://tinyurl.com/yym6v4uz
Personal Tax Returns
We are now a little over 5 months away from the Self-Assessment tax return deadline of 31st January 2021. Thank you to all who have sent your information in to us so far.
Now a good time to start getting all your paperwork together and over to us. You may find you have some documents missing and need to request them which may take a lot longer at the moment due to some businesses running at a reduced work force.
The sooner you get your tax return submitted, the sooner you will know what your tax liability will be, or if you are due a refund the sooner you will get it.