Self-employment Income Support Scheme

Self-employment Income Support Scheme

On 26 March the Chancellor Rishi Sunak announced his plans to support the self-employed during the COVID-19 pandemic. In some ways it is very similar to the previously announced Job Retention Scheme. The Self-Employment Income Support Scheme allows self-employed workers to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months. However, the money will not be paid into your account until at least 1 June.

Who can apply for the scheme

If you are a member of a partnership or self-employed and:

  • Your income Tax Self-Assessment tax return has been submitted for the 2018-19 tax year.
  • You have traded in the 2019-20 tax year.
  • You would be trading if it was not for the interruption of COVID-19
  • You have plans to trade in the 2020-21 tax year.
  • You have lost trading/ partnership profits due to the COVID-19 pandemic

Additionally, your trading profits must be less than £50,000, plus you must earn more than half your income through self-employment. If one of the following is true you will be eligible for the scheme:

  • “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”

HMRC will use the data from your 2016/17, 2017/18, and 2018/19 Income Tax Self-Assessment tax return. Therefore, if you have not submitted your 2018/19 Income Tax Self-Assessment tax return yet you will need to do so by 23 April 2020 or you will be ineligible for the scheme. 

To calculate your monthly amount HMRC will add your total trading profit for the last three tax years and divide by three to calculate your monthly amount.

How to apply

The Scheme is not open yet, HMRC will contact you in due course if you are eligible for the scheme.

For more information visit the government website: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

 

 

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141
Contactless spend limit to be increased; COVID-19

Contactless spend limit to be increased; COVID-19

Contactless spend limit to be increased; COVID-19

On 1 April the spending limit for contactless card payments will be increased from £30 to £45. This is an attempt to reduce the use of paper money during the COVID-19 pandemic.

This decision has been made by the Industry body UK Finance after a consultation between the finance and payments industry and the retail sector. Other countries in Europe have made similar changes in the last week. This increase was already being considered before the COVID-19 outbreak, but the decision has been sped up following advice to make payments by card where possible.

Although the announced start date is 1 April, it may take longer for some retailers to introduce this due to the impact of COVID-19, UK Finance has warned.

Statistics from UK Finance suggested that £80.5bn of payments were contactless in 2019, which is a 16% increase on 2018.

Fraud concerns

Many are worried about the risk of fraudulent activity using contactless payments. However, UK Finance has said that contactless fraud remains low, at around 2.5p for every £100 spent using contactless. Additionally, fraud on contactless payments only represented 3.3% of overall card fraud despite contactless card transactions accounting for 44% of all card transactions last year.

Fraud risk

Please be aware that in this current pandemic there has been an increase in activity by scammers, through emails, text messages and phone calls. This has included emails offering fake medical support, offer of discounts on hand sanitiser, and protective face masks that never arrived. Some scammers are even using the HMRC logo to make offers of financial support.

Please be mindful of potential scams and do not open links in any email or text that looks suspicious. Please report all HMRC related phishing emails and bogus contact to [email protected].

Free initial meeting

Craig Walker

Tax Director, Sheffield

0114 266 7141
Companies House announce 3-month extension for businesses unable to file their accounts

Companies House announce 3-month extension for businesses unable to file their accounts

Companies House announce 3-month extension available for businesses unable to file their accounts due to COVID-19

The Department for Business, Energy & Industrial Strategy has introduced a 3-month extension available for businesses unable to file their accounts due to COVID-19. This initiative brought in by the government and Companies House will enable businesses to concentrate on putting a contingency plan in place. All 4.3 million (approximately) businesses registered on Companies House must submit their accounts and reports annually.

How to apply for this extension

Depending on what sector your business operates in you may be granted an extension immediately without applying if you are directly affected by the issues surrounding COVID-19. If not there is no need to worry as you can apply online which will take around 15 minutes to complete. This can be found here: https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts

Free initial meeting

Scott Sanderson

Partner, Sheffield

0114 266 7141
VAT deferral – Cancel your VAT direct debit!

VAT deferral – Cancel your VAT direct debit!

VAT Deferral – Cancel your VAT direct debit!

The Chancellor has announced that VAT payments can be deferred for the next 3 months. All VAT-registered UK businesses are eligible for the deferral.

If your business normally pays VAT by direct debit, you will need to cancel your direct debit in order to benefit from the VAT deferral. The Treasury has confirmed that it can not cancel direct debits unilaterally, so unless you cancel it, the money will be deducted automatically following the submission of your VAT return. Please do this well in advance of your normal VAT payment date so HMRC do not attempt to collect the payment.

Businesses will not need to make a VAT payment during the deferral period of 20 March 2020 to 30 June 2020. This will generally mean the deferral of the VAT quarter due for payment on 7 April, 7 May or 7 June 2020, or the monthly payments due on each of these dates. Any outstanding VAT payments accumulated during the deferral period will need to be paid to HMRC by the end of the 2020/21 tax year.

It is important that you remember to set up the direct debit again in due course.

Businesses should continue to file their VAT returns as normal by the due dates. The Government will pay VAT refunds and reclaims as usual during this period.

If you have any questions about your VAT, please contact us.

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Stephen Charles

Tax Partner, Sheffield

0114 266 7141

Tony Nickson

VAT Consultant, Sheffield

01604 645 600

Craig Walker

Tax Director, Sheffield

0114 266 7141
Coronavirus Guidance Update for Charities

Coronavirus Guidance Update for Charities

Charity COVID-19 Update

At this moment in time many charities will be understandably concerned about what the COVID-19 outbreak means for them. The government want to assure charities that they will be as flexible and pragmatic as possible during the coronavirus outbreak. They will also advise trustees to consider what their decisions will mean for the charity on a long term basis.

Annual General Meeting (AGM)  

Many charities have asked if they can postpone or cancel their AGM and other key meetings. The government has said that their own health advice may have to lead to the cancelation of important charity meetings and events. Furthermore, the Charity Commission (the CC) have asked that where possible they would like charities to submit their annual reports on time. However, the CC will be understanding if you are unable to do this if your AGM is postponed or cancelled. If you cannot submit your annual report on time you will need to call the CC on 0300 066 9197 open Monday to Friday 9am to 5pm.

Video calling and teleconferencing instead of face to face meetings 

Holding face-to-face meetings is becoming more and more difficult. Therefore, holding video calls and teleconferencing is now a preferable option, at least in the short term. In some charity governing documents there is a clause that allow the trustees of the charity to meet virtually. Current advice is to check these documents and meet virtually if possible so you can get any immediate annual reports in on time.

If you do not have this clause in your governing document, you can still decide to have virtual meetings. But, you should record this decision and demonstrate that it is for continuing effective governance of the charity.

What do charities need to report to the Charity Commission?

The CC understand that the coronavirus outbreak means that charities will face extremely demanding challenges to get through the pandemic. The primary interest of charities must now be to look after the community your charity serves and the people within them.

In terms of reporting incidents to the Charity Commission it is still the trustees’ responsibility to do this. They still advise that you should follow the existing guidelines as to whether anything should be reported. However, the CC have also stated that they want trustees to use their own judgement in deciding on what incidents should and should not be reported to them.

What is the position on restricted and unrestricted funds?

Trustees should consider their short, medium and long term aims when considering their charity’s financial position. The reserves of the charity can be used to support it during times of uncertainty, however you should consider any restrictions imposed on the use of these funds. Internally designated restrictions may be able to be re-purposed. However accessing restricted funds should only be done as a last resort and the charity should consider the wider implications of taking such action. The CC are available to provide support before taking any such decisions.

Related content

COVID-19 Government Funding Update

More from our charity experts

You can find all of our latest charity sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141