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Accountants Chester | Phillips & Co | Covid and Self Isolation

New package to support and enforce self-isolation comes into effect today

28 September 2020

From today, people will be required by law to self-isolate. They will be supported by a payment of £500 for those on lower incomes who cannot work from home and have lost income as a result. 

New fines for those breaching self-isolation rules will start at £1,000 – bringing this in line with the penalty for breaking quarantine after international travel – but could increase to up to £10,000 for repeat offences and the worst breaches, including business owners who threaten self-isolating staff with redundancy if they do not come to work, sending a message that this will not be tolerated.

Recognising that self-isolation is one of the most powerful tools for controlling the transmission of Covid-19, this new Test and Trace Support payment of £500 will ensure that those on low incomes are able to self-isolate without worry about their finances.

Just under 4 million people who are in receipt of benefits in England will be eligible for this payment, which will be available to those who are required to self-isolate from today (28 September.

The government expects the self-isolation support schemes to be in place by 12 October. Those who start to self-isolate from today will receive backdated payments once the scheme is set up in their Local Authority.

 

Accountants Chester | Phillips & Co | News

Chancellor Rishi Sunak announces furlough scheme replacement plans

24 September 2020

The Chancellor of the Exchequer, Rishi Sunak, is outlining his ‘Winter Economy Plan’ to protect jobs this afternoon after cancelling this autumn’s budget.

The new Job Support Scheme

Chancellor Rishi Sunak said a new job support scheme would see the Government “directly support” the wages of people in viable jobs working at least a third of their normal hours. Built on three principles, employees must work at least a third of their normal hours and being paid by their employer.

The government will cover the remaining two-thirds and the employee “will keep their job.”

The scheme will start in November.

Rishi Sunak said the new Jobs Support Scheme would allow businesses to keep employees in a job on shorter hours.

“The government will directly support the wages of people in work, giving businesses who face depressed demand the option of keeping employees in a job on shorter hours rather than making them redundant. “ Mr Sunak told the Commons.

Mr Sunak also said “I am extending the existing self-employed grant on similar terms and conditions.

“Mr Speaker these are radical interventions in the UK job market.

“Tens of billions of pounds in jobs investment schemes, we are protecting millions of jobs and businesses.”

Businesses will be supported with cashflow

“Right now businesses need every extra pound to protect jobs,” Mr Sunak says.

Bounceback loans have given 8 million businesses a boost.

“We are introducing pay as you grow. This means loans can now be extended from six to 10 years, nearly halving the monthly payments.”

“No business taking up Pay as you Grow will see their credit rating affected as a result.

“To help businesses, I plan to extend the government guarantee on these loans and the deadline of all our loan schemes to the end of this year.

“We are starting working on a successor to the Loan Guarantee Programme from January.”

To support 150,000 businesses and protect 2.4 million jobs

The lower 5 per cent VAT rate will be kept until March 31 next year.

“Today’s measures mark an important evolution in our approach. Our lives can no longer be put on hold.”

Mr Sunak said: “The final step I’m taking today will support two of the most affected sectors, hospitality and tourism.

“On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.

“So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I’m announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.”

Accountants Chester | Phillips & Co

Local lockdown grant supports businesses forced to close

11 September 2020

New grants worth up to £1,500 will be available every three weeks to businesses required to close due to local lockdowns or targeted restrictions.

The grants come as the government locks down areas such as Bolton, which have seen localised spikes in coronavirus and new rules on gatherings over six people. This means the effected businesses in England will be able to claim up to £1,500 per property every three weeks, while smaller businesses can claim £1,000.

Announcing the news in Parliament yesterday, chief secretary to the Treasury Steve Barclay said: “These grants provide businesses with a safety net as they temporarily close their doors to help save lives in their local areas.”

The scheme is currently under trial in Blackburn with Darwen, Pendle, and Oldham, before rolling out to other local authorities.

The scheme is basing the size of the business on the rateable value of its premises. A business classed as small with a rateable value less than £51,000, or pays annual rent or mortgage of less than that amount, would receive £1,000. Any business that has a rateable value or mortgage payments more than £51,000 will receive £1,500. Like the other grants, these payments will also be treated as taxable income.

However, the scheme is not designed to support businesses that have closed at a national level, such as nightclubs – it’s specifically for businesses affected by local lockdowns or restrictions.

The local authorities will distribute grants to businesses and they will also have authority to implement further eligibility criteria.

These grants target businesses on the business rates list, which is why local authorities also have an additional 5% top up amount of support funding to aid other businesses hit by these local restrictions. The grants offered from this discretionary fund almost are worth up to £1,500. But unlike the scheme based on the rateable value, funding may be less than £1000 in some cases.

“No business should be punished for doing the right thing, which is why today’s package will offer additional breathing space for businesses that have had to temporarily close to control the virus,” said the business secretary Alok Sharma.

 

Accountants Chester | Phillips & Co | Self Employed

IPSE considers tax hike for freelancers to be unjust

07 September 2020

Chancellor Rishi Sunak’s plan to raise the national insurance contributions (NICs) paid by self-employed workers would be unjust, the Association of Independent Professionals and the Self-Employed (IPSE) has claimed.

According to reports, the Chancellor is considering bringing the 9% Class 4 NICs rate paid by the self-employed into line with the 12% rate for employees. It is one of the ways the Treasury is reported to be looking at raising revenue after spending billions on its coronavirus (COVID-19) support packages.

When Mr Sunak announced the Self-employment Income Support Scheme (SEISS) in March, he warned: ‘If we all want to benefit from state support, we must all pay equally in the future.’

IPSE has argued that making the 1.5 million self-employed pay for support they did not get would be unfair. It also said that given the slump in the number of self-employed individuals it would also be uneconomical to squeeze these workers further.

Andy Chamberlain, Director of Policy at IPSE, said: ‘The last few months have financially hammered the self-employed, with over two-thirds seeing a drop in demand for their work. Government support was some help – to a proportion of the self-employed.

‘More noticeable, though, was the 1.5 million who fell through the gaps, leaving many financially devastated. The idea that this 1.5 million should now suffer a drastic tax hike to pay for support they never got is unjust, uneconomical – and unbelievable. If the government is really considering this, it must stop now.’

 

Accountants Chester | Phillips & Co | UK Plastic Tax

UK plastic bag tax charge to be doubled to 10p from April 2021

01 September 2020

The fee for plastic shopping bags in England will be doubled to 10p and extended to all shops from April 2021.

Small retailers – those employing 250 people or fewer – will no longer be exempt, the Department for Environment, Food and Rural Affairs (Defra) said.

According to Defra, since the charge was first introduced in 2015 it has successfully prevented billions of plastic bags being sold and ending up in the ocean and environment.

Government data shows the current levy, which stands at 5p and applies to any retailer employing 250 or more people, has led to a 95% cut in plastic bag sales in major supermarkets since 2015.

Commenting on the announcement, Environment Secretary George Eustice, said: ‘We have all seen the devastating impact plastic bags have on the oceans and on precious marine wildlife, which is why we are taking bold and ambitious action to tackle this issue head on.

‘The UK is already a world-leader in this global effort, and our carrier bag charge has been hugely successful in taking billions of harmful plastic bags out of circulation. But we want to go further by extending this to all retailers so we can continue to cut unnecessary waste and build back greener.’

 

Accountants Chester | Phillips & Co

Professional fees grant to include accountancy fees

25 August 2020

Small businesses in England are set to benefit from a new tranche of government grants designed to help them recover from the impact of coronavirus through professional advice – including guidance from accountants.

The scheme will dispense grants of between £1,000 – £5,000 to small and medium-sized businesses from an overall fund of £20m to help them access professional services advice from accountants, HR experts and lawyers, as well as purchase new technology and equipment.

Interested parties can access the funding – provided by the England European Regional Development Fund – as part of the European Structural and Investment Funds Growth Programme 2014-2020, through 38 growth hubs within their Local Enterprise Partnership (LEP) area. Each LEP has been awarded a minimum of £250,000 to get the programme rolling.

 

 

Accountants Chester | Phillips & Co | Furlough Fraud

Thousands of furlough applications blocked by HMRC

24 August 2020

HMRC has blocked thousands of applications for the government’s Coronavirus Job Retention Scheme (CJRS) due to fears they are fraudulent.

More than 30,000 CJRS applications have been rejected by HMRC, according to reports. At the end of June, 1,526 CJRS claims were rejected because the companies applying had ceased trading.

An additional 23,899 applications were rejected because businesses didn’t have any employees on their payroll for the 2019/20 tax year.

HMRC reportedly believes many applications are fraudulent, and has taken steps to block claims.

The CJRS has provided £35.4 billion in support for 9.6 million jobs. It is being gradually wound down and will end in October, to be replaced by a Job Retention Bonus. This will see UK employers receive a one-off payment of £1,000 for each furloughed employee who is still employed as of 31 January 2021.

To qualify for the payment, the employee must be paid at least £520 on average in each month from November to January. Payments will be made from February 2021.

Accountants Chester | Phillips & Co | Self Employed

Second round of grants for the self-employed opens

17 August 2020

The Self-Employment Income Support Scheme (SEISS) has opened for applications for the second and final grant.

Under the scheme, the government pays self-employed individuals a taxable grant based on an average of their earnings over the past three years.

The grant covers up to 70% of earnings, up to a limit of £2,190 a month.

The eligibility criteria for the second grant are the same as for the first one. To be eligible, self-employed workers must have filed a tax return for the 2018/19 tax year and have average trading profits under £50,000 for the past three years.

The claimant’s business must have been adversely affected by the coronavirus (COVID-19) at any time since 14 July. Both those who claimed the first grant and those who did not are eligible for the second grant. Claims must be made by 19 October.

Detailed guidance about the grants can be found here.

 

Accountants Chester | Phillips & Co | Childcare

Government extends Tax-Free Childcare scheme due to Covid-19

10 August 2020

The government has further extended Tax-Free Childcare (TFC) to 31 October 2020 for parents who may have fallen below the minimum income requirement as a result of the coronavirus (COVID-19) pandemic.

HMRC confirmed that key workers who may exceed the income threshold for the 2020/21 tax year as a result of working more due to the pandemic will continue to receive support.

The TFC scheme provides families with a £2 government top-up for every £8 they pay into their child’s account, up to the value of £2,000 per child, or £4,000 per disabled child. The money can be used towards the cost of qualifying childcare for a child up to the age of 11, or 17 for a disabled child.

Commenting on the matter, Angela MacDonald, Deputy Chief Executive at HMRC, said: ‘HMRC has been providing vital financial support to families during a time when it has been needed most, and we will continue to help them as they gradually transition back to a normal life.

‘We want to make sure families will not be adversely affected by any abrupt change in circumstances, which is why we have extended available support through TFC to give families that extra boost.’

Accountants Chester | Phillips & Co | MTD

Government announces next steps for Making Tax Digital

 03 August 2020

The tax digitisation programme will impact lots more people including private landlords and businesses with a turnover of more than £10,000.

 At present, businesses above the VAT threshold of £85,000 are covered by the system, which requires them to keep digital records and provide VAT returns through software.

Since it was introduced in 2019 more than 1.4 million businesses have joined the programme, submitting more than 6 million returns.

From April 2022, the programme will be extended to all VAT-registered businesses with turnover below the VAT threshold (£85,000). From April 2023, it will apply to taxpayers who file income tax self-assessment tax returns for business or property income of more than £10,000 a year.

 Jesse Norman, financial secretary to the Treasury, said: “Making Tax Digital will make it easier for businesses to keep on top of their tax affairs. But it also has huge potential to improve the productivity of our economy, and its resilience in times of crisis.”

Making Tax Digital changes will affect the way that taxes are reported, not the level of tax that is collected.

The government says it will help to minimise avoidable mistakes – which cost the exchequer £8.5bn in 2018-19.

 

Accountants Chester | Phillips & Co

Small business confidence begins to bounce back

28 July 2020

Confidence in the UK’s small business sector is starting to bounce back, according to a quarterly survey conducted by Hitachi Capital Business Finance (HCBF).

The HCBF survey reported that the number of UK small businesses predicting growth has almost doubled in just three months, from 14% to 27%.

Following last quarter’s report, which saw the percentage of small business owners predicting growth plummeting from 39% to just 14%, the new findings show the highest quarter-on-quarter rise in five years.

The IT/telecoms sector had the highest proportion of small businesses that predicted growth at 44%, while transport and distribution saw the biggest rise in confidence.

Commenting on the report, Gavin Wraith-Carter, Managing Director at HCBF, said: ‘We knew last quarter that small business confidence would fall as lockdown started and the scale of the fall was a concern, particularly the steep rise in the number of business owners fearing for their survival. Our new research – just in – shows what an immediate and positive impact the easing of lockdown has had on the small business community.

 

Accountants Chester| Phillips & Co

Free online advice scheme for small businesses launched

13 July 2020

A government-backed advice scheme has been launched to help small businesses bounce back from the coronavirus (COVID-19).

The Recovery Advice for Business Scheme gives small firms access to free, one-to-one advice with an expert adviser to help them through the COVID-19 pandemic and prepare for long-term recovery.

Advice offered includes bespoke, specialist assistance from accountancy, legal and advertising experts, as well as marketing, recruitment and tech advice to help businesses adapt to difficult circumstances and bounce back as the UK economy recovers.

The Institute of Chartered Accountants in England and Wales (ICAEW), the Chartered Institute of Personnel Development (CIPD), the Advertising Association, the Law Society and the Management Consultancies Association (MCA) are among the professional bodies that have signed up for the scheme.

Commenting on the scheme, Small Business Minister Paul Scully said: ‘We have stood by small businesses throughout this crisis, offering a wide-ranging package of financial support. However, it is also important that business owners get easy access to expert advice and support.

‘It is incredible to see so many professional advisers stepping up to do their bit for small businesses across the country. This advice platform will help to boost our recovery from the impact of coronavirus, giving small businesses extra support to adapt their business models and come back fighting.’

The Recovery Advice for Business Scheme runs until 31 December 2020. Further information on accessing the support can be found here.

 

Accountants Chester | Phillips & Co

Rishi Sunak unveils £30bn 'National Recovery' package

08 July 2020

Chancellor Rishi Sunak unveils a £30bn package to to turn the UK’s national recovery “into millions of stories of personal renewal”. The package included:

a £1,000 bonus for each worker that companies bring back from furlough and employ through to January next year;
a “kickstart scheme” to directly pay firms to create jobs for 16 to 24-year-olds;
cash for businesses to take on trainees and apprentices;
an eight-month temporary cut in stamp duty, with no charge on property transactions below £500,000;
a cut in VAT on food, accommodation and attractions from 20% to 5% until 12 January;
an “Eat Out to Help Out” discount of up to £10 per head to get Britons back to restaurants, cafes and pubs.
Accountants Chester | Phillips & Co | Tax News

Flexible Furlough Scheme starts today

01 July 2020

Businesses will have the flexibility to bring furloughed employees back to work part time from today (1 July) as part of the government’s plan to re-open the UK and kick-start our economy. From today businesses can bring furloughed employees back to work on a part time basis.Firms will be given the flexibility to decide the hours and shift patterns of their employees – with the government continuing to pay 80% of salaries for the hours they do not work

The government’s Coronavirus Job Retention Scheme (CJRS) has so far helped protect more than 9.3 million jobs through the pandemic, with employers claiming more than £25.5 billion to support wages.

The scheme will remain open until the end of October and will continue to support jobs and business in a measured way as people return to work, our economy reopens and the country moves to the next stage of its recovery.

From today, a month earlier than previously announced, employers will have the flexibility to bring furloughed employees back to work on a part time basis.

Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.

Chancellor of the Exchequer Rishi Sunak said:

Our number one priority has always been to protect jobs and businesses through this outbreak. The furlough scheme, which will have been open for eight months by October, has been a lifeline for millions of people and as our economy reopens we want that support to continue.

Giving firms the flexibility to bring back furloughed workers on a part-time basis will help them work gradually and help them plan for the months ahead.

From August, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. Businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.

More information about the changes can be found here.

 

Accountants Chester | Phillips & Co | VAT

Government urged to consider VAT cut to stimulate spending

23 June 2020

The government has again been urged to consider an emergency reduction in the rate of VAT in order to help businesses once the Coronavirus (COVID-19) lockdown ends.

A new report published by think tank Policy Exchange has suggested that reducing the rate of VAT to 15% could help boost consumer spending in the short-term. The standard rate of VAT is currently 20%.

The publication of the report comes following rumours that Chancellor Rishi Sunak is reportedly considering cutting the standard rate of VAT to help tackle the economic fallout caused by the COVID-19 lockdown.

According to reports, the Chancellor is preparing to deliver a ‘Summer Statement’ in early July, in which he is likely to outline new initiatives on skills and apprenticeships, alongside measures to help boost the UK economy.

Experts have also recommended cutting employer national insurance contributions (NICs) and extending the business rates relief scheme in England and Wales.

 

Accountants Chester | Phillips & Co

Businesses are urged to reinstate VAT direct debits

19 June 2020

The ICAEW (Institute of Chartered Accountants in England and Wales) has reminded businesses that they need to reinstate their direct debit mandates before the deferral of VAT payments (due to the Coronavirus) comes to an end on 30 June.

The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021.

Businesses, however, need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due from July 2020 onwards. Any outstanding returns should be filed and three working days should be allowed to elapse before reinstating the direct debit mandate.

The Tax Faculty at the Institute of Chartered Accountants in England and Wales (ICAEW) said: ‘HMRC has confirmed to the Tax Faculty that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in Making Tax Digital for VAT (MTD for VAT).

‘Arrangements will also need to be made to pay the deferred VAT by 31 March 2021; further guidance is expected from HMRC on the mechanism.’

 

Accountants Chester | Hospitality

MP's call for October bank holiday and VAT cuts

15 June 2020

The government has been urged by MP’s to cut VAT rates for firms in the tourism sector in order to help them recover from the coronavirus (COVID-19) lockdown.

A report published by the All-Party Parliament Group (APPG) for Hospitality and Tourism has called for a reduction in VAT for businesses in the hospitality sector, alongside an overhaul of the business rates system in England and Wales and the creation of a new autumn Bank Holiday.

It is thought that an extra bank holiday – recommended for October – could soften the blow of peak season losses by promoting autumn ‘staycations’.

Just 11% of businesses in the UK hospitality sector have been able to trade through the COVID-19 pandemic, according to the APPG. Figures published recently by the Treasury also revealed that accommodation and food services companies have furloughed 1.4 million people, and have claimed £2.6 billion in furlough funds.

Commenting on the matter, Steve Double, Chair of the APPG, said: ‘The UK’s hospitality and tourism sectors have been devastated by the COVID-19 crisis, and this report highlights the scale of the damage done to businesses.

‘Whilst the support provided to the sector so far has been very welcomed, we are under no illusions that the path to recovery will be tough.’

Tourism is a ‘vital pillar of the economy’, with 37.9m visitors to the UK in 2018 and an overall visitor spend of £22.9bn. The north west welcomed 3.1m of those visitors, with an average spend of £443 per visit totalling £1.46bn.

 

Accoutants Chester | Phillips & Co | VAT Reverse Charge

HMRC delays VAT reverse charge on construction services

08 June 2020

The government has announced a five-month delay to the introduction of the domestic VAT reverse charge for construction services, due to the impact of the coronavirus pandemic on the sector.

The change, which is being introduced to reduce fraud in the sector, will now apply from 1 March 2021 and will overhaul the way VAT is payable on building and construction invoices. Under the domestic reverse charge, the customer receiving the service will have to pay the VAT owed straight to HMRC instead of paying the supplier, if they report via the Construction Industry Scheme (CIS).

The change which has now been put back from 1 October 2020 to 1 March 2021 was originally scheduled to come into effect from 1 October 2019. It was deferred for 12 months after industry bodies highlighted concerns about the lack of preparation and the impact on businesses.

There will also be an amendment to the original legislation. This will make it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their subcontractors, in writing, that they are end users or intermediary suppliers. The amendment, HMRC have said, is designed to make sure both parties are clear in regard to whether the supply is excluded from the reverse charge. It reflects recommended advice published in HMRC guidance and brings certainty for subcontractors as to the correct treatment for their supplies.

 

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 Chester | Phillips & Co

Businesses are urged to reinstate VAT direct debits

19 June 2020

The ICAEW (Institute of Chartered Accountants in England and Wales) has reminded businesses that they need to reinstate their direct debit mandates before the deferral of VAT payments (due to the Coronavirus) comes to an end on 30 June.

The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021.

Businesses, however, need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due from July 2020 onwards. Any outstanding returns should be filed and three working days should be allowed to elapse before reinstating the direct debit mandate.

The Tax Faculty at the Institute of Chartered Accountants in England and Wales (ICAEW) said: ‘HMRC has confirmed to the Tax Faculty that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in Making Tax Digital for VAT (MTD for VAT).

‘Arrangements will also need to be made to pay the deferred VAT by 31 March 2021; further guidance is expected from HMRC on the mechanism.’

 

Accountants Chester | Hospitality

MP's call for October bank holiday and VAT cuts

15 June 2020

The government has been urged by MP’s to cut VAT rates for firms in the tourism sector in order to help them recover from the coronavirus (COVID-19) lockdown.

A report published by the All-Party Parliament Group (APPG) for Hospitality and Tourism has called for a reduction in VAT for businesses in the hospitality sector, alongside an overhaul of the business rates system in England and Wales and the creation of a new autumn Bank Holiday.

It is thought that an extra bank holiday – recommended for October – could soften the blow of peak season losses by promoting autumn ‘staycations’.

Just 11% of businesses in the UK hospitality sector have been able to trade through the COVID-19 pandemic, according to the APPG. Figures published recently by the Treasury also revealed that accommodation and food services companies have furloughed 1.4 million people, and have claimed £2.6 billion in furlough funds.

Commenting on the matter, Steve Double, Chair of the APPG, said: ‘The UK’s hospitality and tourism sectors have been devastated by the COVID-19 crisis, and this report highlights the scale of the damage done to businesses.

‘Whilst the support provided to the sector so far has been very welcomed, we are under no illusions that the path to recovery will be tough.’

Tourism is a ‘vital pillar of the economy’, with 37.9m visitors to the UK in 2018 and an overall visitor spend of £22.9bn. The north west welcomed 3.1m of those visitors, with an average spend of £443 per visit totalling £1.46bn.

 

Accoutants Chester | Phillips & Co | VAT Reverse Charge

HMRC delays VAT reverse charge on construction services

08 June 2020

The government has announced a five-month delay to the introduction of the domestic VAT reverse charge for construction services, due to the impact of the coronavirus pandemic on the sector.

The change, which is being introduced to reduce fraud in the sector, will now apply from 1 March 2021 and will overhaul the way VAT is payable on building and construction invoices. Under the domestic reverse charge, the customer receiving the service will have to pay the VAT owed straight to HMRC instead of paying the supplier, if they report via the Construction Industry Scheme (CIS).

The change which has now been put back from 1 October 2020 to 1 March 2021 was originally scheduled to come into effect from 1 October 2019. It was deferred for 12 months after industry bodies highlighted concerns about the lack of preparation and the impact on businesses.

There will also be an amendment to the original legislation. This will make it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their subcontractors, in writing, that they are end users or intermediary suppliers. The amendment, HMRC have said, is designed to make sure both parties are clear in regard to whether the supply is excluded from the reverse charge. It reflects recommended advice published in HMRC guidance and brings certainty for subcontractors as to the correct treatment for their supplies.

 

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 Chester | Hospitality

MP's call for October bank holiday and VAT cuts

15 June 2020

The government has been urged by MP’s to cut VAT rates for firms in the tourism sector in order to help them recover from the coronavirus (COVID-19) lockdown.

A report published by the All-Party Parliament Group (APPG) for Hospitality and Tourism has called for a reduction in VAT for businesses in the hospitality sector, alongside an overhaul of the business rates system in England and Wales and the creation of a new autumn Bank Holiday.

It is thought that an extra bank holiday – recommended for October – could soften the blow of peak season losses by promoting autumn ‘staycations’.

Just 11% of businesses in the UK hospitality sector have been able to trade through the COVID-19 pandemic, according to the APPG. Figures published recently by the Treasury also revealed that accommodation and food services companies have furloughed 1.4 million people, and have claimed £2.6 billion in furlough funds.

Commenting on the matter, Steve Double, Chair of the APPG, said: ‘The UK’s hospitality and tourism sectors have been devastated by the COVID-19 crisis, and this report highlights the scale of the damage done to businesses.

‘Whilst the support provided to the sector so far has been very welcomed, we are under no illusions that the path to recovery will be tough.’

Tourism is a ‘vital pillar of the economy’, with 37.9m visitors to the UK in 2018 and an overall visitor spend of £22.9bn. The north west welcomed 3.1m of those visitors, with an average spend of £443 per visit totalling £1.46bn.

 

Accoutants Chester | Phillips & Co | VAT Reverse Charge

HMRC delays VAT reverse charge on construction services

08 June 2020

The government has announced a five-month delay to the introduction of the domestic VAT reverse charge for construction services, due to the impact of the coronavirus pandemic on the sector.

The change, which is being introduced to reduce fraud in the sector, will now apply from 1 March 2021 and will overhaul the way VAT is payable on building and construction invoices. Under the domestic reverse charge, the customer receiving the service will have to pay the VAT owed straight to HMRC instead of paying the supplier, if they report via the Construction Industry Scheme (CIS).

The change which has now been put back from 1 October 2020 to 1 March 2021 was originally scheduled to come into effect from 1 October 2019. It was deferred for 12 months after industry bodies highlighted concerns about the lack of preparation and the impact on businesses.

There will also be an amendment to the original legislation. This will make it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their subcontractors, in writing, that they are end users or intermediary suppliers. The amendment, HMRC have said, is designed to make sure both parties are clear in regard to whether the supply is excluded from the reverse charge. It reflects recommended advice published in HMRC guidance and brings certainty for subcontractors as to the correct treatment for their supplies.

 

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 Chester | Hospitality

MP's call for October bank holiday and VAT cuts

15 June 2020

The government has been urged by MP’s to cut VAT rates for firms in the tourism sector in order to help them recover from the coronavirus (COVID-19) lockdown.

A report published by the All-Party Parliament Group (APPG) for Hospitality and Tourism has called for a reduction in VAT for businesses in the hospitality sector, alongside an overhaul of the business rates system in England and Wales and the creation of a new autumn Bank Holiday.

It is thought that an extra bank holiday – recommended for October – could soften the blow of peak season losses by promoting autumn ‘staycations’.

Just 11% of businesses in the UK hospitality sector have been able to trade through the COVID-19 pandemic, according to the APPG. Figures published recently by the Treasury also revealed that accommodation and food services companies have furloughed 1.4 million people, and have claimed £2.6 billion in furlough funds.

Commenting on the matter, Steve Double, Chair of the APPG, said: ‘The UK’s hospitality and tourism sectors have been devastated by the COVID-19 crisis, and this report highlights the scale of the damage done to businesses.

‘Whilst the support provided to the sector so far has been very welcomed, we are under no illusions that the path to recovery will be tough.’

Tourism is a ‘vital pillar of the economy’, with 37.9m visitors to the UK in 2018 and an overall visitor spend of £22.9bn. The north west welcomed 3.1m of those visitors, with an average spend of £443 per visit totalling £1.46bn.

 

Accoutants Chester | Phillips & Co | VAT Reverse Charge

HMRC delays VAT reverse charge on construction services

08 June 2020

The government has announced a five-month delay to the introduction of the domestic VAT reverse charge for construction services, due to the impact of the coronavirus pandemic on the sector.

The change, which is being introduced to reduce fraud in the sector, will now apply from 1 March 2021 and will overhaul the way VAT is payable on building and construction invoices. Under the domestic reverse charge, the customer receiving the service will have to pay the VAT owed straight to HMRC instead of paying the supplier, if they report via the Construction Industry Scheme (CIS).

The change which has now been put back from 1 October 2020 to 1 March 2021 was originally scheduled to come into effect from 1 October 2019. It was deferred for 12 months after industry bodies highlighted concerns about the lack of preparation and the impact on businesses.

There will also be an amendment to the original legislation. This will make it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their subcontractors, in writing, that they are end users or intermediary suppliers. The amendment, HMRC have said, is designed to make sure both parties are clear in regard to whether the supply is excluded from the reverse charge. It reflects recommended advice published in HMRC guidance and brings certainty for subcontractors as to the correct treatment for their supplies.

 

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 your business call us on 01244 220 062 to arrange a  Covid-19, free, no-obligation meeting. Alternatively, email us at info@phillipscoaccountants.co.uk