March 27th – Update
Scam emails, calls and texts from HMRC
Please be aware that the government are advising of an increase in scam emails, calls and texts. If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, do not respond.
HMRC will never contact you out of the blue to ask for these details. –
If you are contacted please send information to us and we will check the validity of the communication.
Self-Employed Income Support Scheme
The Chancellor, yesterday evening, announced a new Self- employment Income Support Scheme to support self-employed people who have been adversely affected by COVID-19.
Self-employed people do not have to get in touch with HMRC as the scheme isn’t yet open for applications. HMRC will contact eligible people by the beginning of June, inviting them to apply.
Those eligible to receive the grant worth 80% of their average monthly trading profit over the last three years.
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
- This payment is a taxable payment
This scheme also applies to members of partnerships.
Before grant payments are made, the self-employed will still be able to access other available government support, including universal credit and business continuity loans where you have business bank account.
Have you filed your 2019 tax return or know someone who hasn’t?
If you are one of them or know someone who should do this please remember that we are here to complete them.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.
The Coronavirus Job Retention Scheme : Furlough Guidance – Owner/Managed companies
The Institute of Chartered Accountants in England and Wales (ICAEW) yesterday issued this guidance concerning Owner/managed companies
- “Many owner managed company director/shareholders pay small salaries and the balance of income as dividends. The scheme does not extend to dividends. Only the salary is relevant to the scheme. Such companies must have been paying a salary through a payroll to be eligible for the grant.”
Please remember that the following rules are also in place.
- “Furloughed members of staff must not work for the employer during the period of furlough”.
- Or making money for your employer
- Or providing services to your employer
The ICAEW also states that the narrative used by the government so far says “if your employer cannot cover staff costs due to COVID-19 they may be able to access support….”
HMRC are in receipt of Real Time Information and will be aware of the amount the Owner/Manager would normally receive and will be aware of any increase that would be claimed through the scheme.
Your employees can check on their entitlement through this link
How will the grant be calculated ?
The maximum grant will be calculated per employee and is the lower of :-
- 80% of ‘an employee’s regular wage’ and
- £2500 per month
- PLUS the associated employers’ national insurance contributions on that wage
- (Fees, commission and bonuses should not be included).
- This gives a maximum cap of £2500 + £245 (employer’s NIC) + £59 (auto enrolled pension contribution) = £2804 of total possible grant that can be applied for per employee per month.
What is the £2,500 maximum grant based on?
As the £2,500 limit to the monthly grant appears to cover all employment costs, it is unclear how benefits in kind, and in particular those being payrolled, will be reflected in the calculation.
- For full-time and part-time employees, the base for the 80% calculation is the employee’s actual salary as of 28 February 2020.
- For employees whose pay varies, HMRC guidance advises the following:
- “If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:
- the same month’s earnings from the previous year; or
- average monthly earnings for the year.
- “If the employee has been employed for less than a year, claim for an average of their monthly earnings since they started work.
- “If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.
We are being asked how to apply for the grant but we are unable to supply this information at this time, as soon as we know we will be here to help you.
Please however read the Guidance from HMRC
If you choose to put an employee on furlough leave, you will need to do this for a minimum of three weeks. You can place an employee on furlough leave more than once and one period can follow straight after an existing furlough period, while the scheme is open. The scheme will be open for at least 3 months.
If an employee refuses to go on furlough leave they may be at risk of redundancy or termination of their employment depending on the circumstances of your business, but this must be in line with the normal redundancy rules and protections.
If you can not pay tax due to HMRC
What to do
- Contact HM Revenue and Customs (HMRC) as soon as possible if you have missed your payment. How you contact HMRC depends on what you need to pay.
- You have to pay interest if you pay late. You may avoid penalties by contacting HMRC as soon as possible.
- If you cannot pay because of coronavirus (COVID-19)
- Advisers can only talk to you about problems paying your taxes due to coronavirus (COVID-19). This could be:
- Self Assessment
- employers’ PAYE
- Corporation Tax
- They will not be able to transfer you to another webchat team. Speak to an adviser.
- Due to measures put in place to stop the spread of coronavirus (COVID-19) we have fewer advisers available to answer your calls.
- 0800 024 1222
- Opening times:
- Monday to Friday: 8am to 4pm
If you cannot pay your Self Assessment tax bill
- If you’ve filed your return and owe less than £10,000 you might be able to arrange to pay in instalments online.
- You do not need to contact HMRC if you have set up a payment plan online.
- Call the Self Assessment helpline if you’ve missed your payment date or you cannot use the online service.
- Self Assessment Payment Helpline
- Self Assessment Payment Helpline
- Telephone: 0300 200 3822
- Monday to Friday, 8am to 4pm
PLEASE REMEMBER TO CANCEL YOUR VAT DIRECT DEBIT (if you don’t it will be taken from your bank account)