Tax News

Fantastic advice and help in setting up our Ltd company. Any problems and Phillips & Co are always there to help.

Debbie Owen

Stuart Owen Plant Repairs Limited

Accountants Chester | Phillips & Co | Small Business Accountants

Strong economic recovery likely, but not certain

04 June 2020

A strong economic recovery following the coronavirus pandemic is likely, with conditions ripe for a quick turnaround, a new report by Oxford Economics suggests.

The unusual nature of this recession could be a silver lining for recovery, the report, which was commissioned by chartered accountancy body ICAEW, said. GDP has fallen because of a planned, partial economic shutdown, so in theory activity and demand should rebound as restrictions lift, particularly given fiscal and monetary support from government and the Bank of England since the crisis began.

The report predicts that the economy should return to growth in the second half of the year if the lockdown continues to be relaxed over the summer.

Some households and private sector companies will have saved cash during the crisis, which could lead to a spike in demand when the lockdown eases, particularly with inflation likely to reach zero in the summer.

The impact of coronavirus should hopefully be a short, if very sharp, shock, the report said, with most of the damage quickly repaired. With low interest rates likely to persist, and gilt yields at historic levels, reducing the deficit should not be an urgent government priority.

Risks to the economy are however high, Oxford Economics said. Recovery could falter if lockdown is extended; if a second wave of coronavirus triggers another lockdown; if long-term economic damage is worse than expected; or if government support is withdrawn too early. A collapse of UK-EU trade talks could also hamper recovery.

Martin Beck, Oxford Economics lead UK Economist said:  “Coronavirus and the restrictions on daily life imposed in response are inflicting a once-in-a-century downturn on the economy. But the nature of the shock and the massive support put in place by policymakers mean a strong bounce back is achievable. However, with no precedents to draw on, the outlook is clouded by multiple risks.”

 

Accountants in Chester

Government Urged to Extend self-employed income support scheme

30 May 2020

The Association of Independent Professionals and the Self-Employed (IPSE) has urged the government to extend its coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS) for as long as self-employed individuals require it.

IPSE has said that the difference between the SEISS and the Coronavirus Job Retention Scheme (CJRS) for employees is a ‘glaring injustice’. It warned that the self-employed could be forced to work in unsafe conditions.

Chancellor Rishi Sunak recently extended the Coronavirus Job Retention Scheme until the end of October. However, the SEISS only covers March to May.

Under the SEISS, the government will pay self-employed people a taxable grant based on an average of their earnings over the past three years.

Andy Chamberlain, Director of Policy at IPSE, said: ‘The self-employed aren’t just a vital and major part of the workforce, they are also the hard-working entrepreneurs we will need to kick-start the economy after coronavirus. However, most of them cannot continue their work in the midst of this deadly pandemic and they are relying on government support to keep their businesses afloat.

‘We were delighted when the government heeded our calls and set up the SEISS, but now it must keep it open as long as the self-employed need it. It must not commit a glaring injustice by extending the employee CJRS but pulling the rug from under the self-employed.’

 

Accountants in Chester

HMRC changes process for obtaining Government Gateway ID

11 May 2020

HMRC has updated the process for acquiring a Government Gateway ID for its Self-employment Income Support Scheme (SEISS).

The Revenue stated that it has changed the process by which it allows taxpayers to create Government Gateway IDs in order to avoid delays. HMRC is advising individuals who need to create a Government Gateway ID to do so via the SEISS service to make sure the correct type of ID is generated.

Taxpayers who already have a Government Gateway ID will be able to use it to apply for an SEISS grant.

HMRC recently started contacting taxpayers who may be eligible for the SEISS. The SEISS claims service opens on 13 May and aims to ‘help millions of self-employed people, covering a wide range of industries and jobs, whose livelihoods have been adversely affected by the cronavirus’.

HMRC stated that the SEISS claims process will be simple, and eligible taxpayers will have the money paid into their bank account by 25 May, or within six working days of completing a claim.

From 6 April CGT due on the sales of residential properties must be reported and paid within 30 days of completion

21 April 2020

From 6 April Capital Gains Tax (CGT) due on the sales of residential properties must be reported and paid within 30 days of completion. This will apply if you are selling a buy-to-let property or second home. It will also apply if you are selling your main residence and Private Residence Relief (PRR) is not available in full. 

HMRC has agreed that it will not charge any penalties for late reporting for the first three months that the new rules are in place. This effectively means that anyone selling their property now has until the end of June to make their online return.

 

HMRC investigations into taxpayers and businesses suspended

14 April 2020

HMRC enquiries into taxpayers and businesses under investigation have been suspended as a result of capacity constraints due to the coronavirus pandemic.

Taxpayers have been contacted by letter asking them not to request information or documents from HMRC or press for responses to requests that have already been made. In some cases, enquiries are being suspended entirely.

HMRC said it was less able to carry out investigations under the shutdown and taxpayers would also have reduced capacity to carry out the necessary follow-ups.

This will come as a relief to those in HMRC’s firing line, but targets should not be lulled into a false sense of security, tax firm Blick Rothenberg has warned. Tax dispute resolution partner Fiona Fernie says: “Whilst this may seem to be welcome news, there may be good reasons to press ahead if taxpayers or their businesses are already under enquiry.

“For individual taxpayers and businesses whose activities are currently curtailed, it would be sensible for them to use the time they have now to deal with HMRC rather than store up problems for the future…After all, if tax is due – it is still going to be due when we come out of this.”

Rental tenants face eviction notice

09 April 2020

The issue of non-payment of rent has arisen in the public housing sector, according to a landlords’ group, as furloughed tenants struggle to pay.

The London Renters’ Union has requested a suspension of all rent payments, to avoid a build-up of unsustainable debt. To counter this, however, the National Residential Landlords Association (NRLA) has said this is not feasible to suspend rent payments as it will punish small landlords.

The NRLA has demanded action from the government to clear up what support can be provided by landlords and lenders to tenants.

Ben Beadle, chief executive of the NRLA, said that landlords needed to be more flexible when tenants were legitimately struggling, and a rent ‘holiday’ of up to three months should be introduced, provided that the system is safe from abuse.

“This is not a green light to tenants everywhere to stop paying their rent,” he said.

According to the NRLA, many smaller landlords whose sole income is from lettings do not have the size and sway of corporate landlords and are dealing with the extra burdens of council tax on empty properties and upkeep alongside mortgage payments.

Chancellor, Rishi Sunak, unveils new measures to SME loan scheme

03 April 2020

The chancellor, Rishi Sunak, is extending the Coronavirus loan scheme for small and medium businesses who have been affected by the disease.

The Covid Business Interruption Loan Scheme (CBILS) was originally created to help firms who were struggling to secure regular commercial financing during the economic downturn of the virus.

But now Mr Sunak has extended CBILS to all viable small and medium business who have faced financial difficulty during the Coronavirus pandemic.

The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals.

Since 23 March, around 1,000 loans worth around £90m have been processed.

The number is expected to increase in the coming days and weeks as lenders get used to the new system.

Get in Touch

To see how Phillips & Co – Accountants Chester can help you please call us on 01244 220 062 or email us at info@phillipscoaccountants.co.uk