Archive for October, 2020

Tax Diary October/November 2020

Monday, October 5th, 2020

1 October 2020 – Due date for Corporation Tax due for the year ended 31 December 2019.

19 October 2020 – PAYE and NIC deductions due for month ended 5 October 2020. (If you pay your tax electronically the due date is 22 October 2020.)

19 October 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2020.

19 October 2020 – CIS tax deducted for the month ended 5 October 2020 is payable by today.

31 October 2020 – Latest date you can file a paper version of your 2020 Self-Assessment tax return.

1 November 2020 – Due date for Corporation Tax due for the year ended 31 January 2020.

19 November 2020 – PAYE and NIC deductions due for month ended 5 November 2020. (If you pay your tax electronically the due date is 22 November 2020.)

19 November 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2020.

19 November 2020 – CIS tax deducted for the month ended 5 November 2020 is payable by today.

Smart Data laws on the way?

Monday, October 5th, 2020

Consumers and small businesses will benefit from better deals and savings through innovative services, thanks to new Smart Data laws proposed by government.

Smart Data enables businesses to provide consumers with more intuitive, easy-to-use services such as better account and bill management, switching services for savings, and targeted support for vulnerable consumers, by allowing businesses to share customer data with authorised third-party providers in an easy and secure way. For example, Smart Data has facilitated services which could alert a vulnerable consumer’s trusted contact (such as a family member or friend) if there is unusual activity on a bank account.

New laws will see more sectors, such as communications like broadband, taking advantage of Smart Data to drive competition and innovation, while providing more choices and lower prices for consumers. The powers would make it possible for government to mandate industry involvement in Smart Data initiatives across the economy where they are not participating already, subject to sector-specific assessment and consultation.

Are you recording customers’ contact details?

Monday, October 5th, 2020

In a press release issued 10 September 2020, the Department for Health and Social Care has reminded affected businesses that they have a legal obligation to record the contact details of their customers, visitors and staff.

Affected concerns in England should note:

  • businesses and other public settings where people meet socially including hospitality, close contact and leisure venues must record contact details of customers, visitors and staff on their premises to tackle the spread of coronavirus
  • details must be stored for 21 days and shared with NHS Test and Trace, if requested
  • fixed penalties will apply to organisations that do not comply

Premises and venues across England like pubs, restaurants, hairdressers and cinemas must have a system in place by law to record contact details of their customers, visitors and staff in the latest move to break the chains of transmission of coronavirus.

These businesses and organisations had been advised to collect and share data, with many effectively doing so, but following the recent move to ban social gatherings of more than 6 people, the data collection programme is now formally mandated and has applied since 18 September.

Please note regional variations in these regulations may apply.

Additional grant aid for local lockdown businesses

Monday, October 5th, 2020

Last month the Treasury announced further support for businesses adversely affected by lockdown in local areas to control local outbreaks.

Local Authorities will be funded to pay the grants now offered.

Businesses in England required to close

Businesses in England required to close due to local lockdowns or targeted restrictions will now be able to receive grants worth up to £1,500 every three weeks, To be eligible for the grant, a business must have been required to close due to local COVID-19 restrictions. Grants will be paid out every three weeks businesses are required to close. During each three week period:

  • Largest businesses will receive £1,500
  • Smaller businesses will receive £1,000.

H M Treasury also released the following notes:

  • any businesses still closed at a national level (e.g. nightclubs), will not be eligible
  • if a business occupies premises with a rateable value less than £51,000 or occupies a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, it will receive £1000
  • if a business occupies premises with a rateable value of exactly £51,000 or above or occupies a property or part of a property subject to an annual rent or mortgage payment of exactly £51,000 or above, it will receive £1500
  • Local authorities will also receive an additional 5% top up amount of business support funding to enable them to help other businesses affected by closures which may not be on the business rates list. Payments made to businesses from this discretionary fund can be any amount up to £1500 and may be less than £1000 in some cases.
  • Local authorities will be responsible for distributing the grants to businesses in circumstances where they are closed due to local interventions
  • further eligibility criteria may be determined by Local authorities
  • as with other COVID-19 business grants, local grants to closed businesses will be treated as taxable income

Making a claim

Contact your Local authority to see if you are eligible. And please note, the eligibility of businesses not on the business rates list will likely be discretionary so an early call to clarify your position may be beneficial.

Annual Christmas bash?

Monday, October 5th, 2020

Trying to double guess the social distancing rules is rather like placing bets on a throw of the dice. The current exhortation from the Prime Minister – to observe the rule of six – is yet a further change in the endless attempts at controlling coronavirus by manipulating social distancing regulation.

But we all need respite; we need to be able to look forward to a cheery Christmas. Unfortunately, based on current progress to control COVID-19, this is looking an increasingly remote possibility.

However, if an annual Christmas bash is on the cards we have outlined below the rules to observe from a tax point of view to ensure that the cost of your annual staff party will not create unintended tax issues for you or your staff.

  1. The event must be open to all employees at a specific location.
  2. An annual Christmas party or other annual event offered to staff generally is not taxable on those attending provided that the average cost per head of the functions does not exceed £150 p.a. (including VAT). The guests of staff attending are included in the head count when computing the cost per head attending.
  3. All costs must be considered, including the costs of transport to and from the event, accommodation provided, and VAT. The total cost of the event is divided by the number attending to find the average cost. If the limit is exceeded then individual members of staff will be taxable on their average cost, plus the cost for any guests they were permitted to bring.
  4. VAT input tax can be recovered on staff entertaining expenditure. If the guests of staff are also invited to the event the input tax should be apportioned, as the VAT applicable to non-staff is not recoverable. However, if non-staff attendees pay a reasonable contribution to the event, all the VAT can be reclaimed and of course output tax should be accounted for on the amount of the contribution.

Perhaps you could book a local restaurant and break up your party into tables of six?

The new Job Support Scheme

Thursday, October 1st, 2020

After much head scratching at the Treasury, the son of the furlough scheme has been unveiled. Aptly called a Job Support Scheme JSS). When the Coronavirus Job Retention Scheme finishes 31 October 2020, employers will need to register for the JSS which is being made available for six months from 1 November 2020.

The JSS aims to support viable jobs. The inference here is that if current jobs are no longer viable they will disappear.

It is difficult see how unemployment can be suppressed as a result of this change in tack; numbers are going to rise. Businesses that may have previously “moth-balled” staff, keeping them at home on furlough, will now face difficult decisions: who to keep on and who to let go.

At best, businesses that have a part-time role for existing staff will be obliged to cover the time actually worked and one-third of time not worked. Employers will also have to meet NIC and pension costs. Employees transferred to the JSS, working a third of their normal hours, will actually receive 77% of their full-time pay.

The JSS does shift the cost of non-worked hours from the Exchequer to the employer.

The other contentious issue that was not addressed by the JSS announcement concerns sectoral differences. Why are vulnerable sectors, the hospitality sector for example, supported to a larger degree than sectors who are less vulnerable to COVID disruption? What about our theatres and live music venues?

The JSS is a one-sized fits all shoe. Unfortunately, we all have different sized feet.

And then there are red-tape considerations. Employers reading this blog who have adjusted to furlough system requirements will need to accommodate changes to manage JSS payments. Your payroll team will need to take on any changes in compliance to join and administer JSS.

There are rumours that JSS payments to employers will be in arrears; more on this topic will follow as details of the JSS are released. Accordingly, there may be cash flow aspects that firms will need to consider.

Patently the JSS does offer support to employers, albeit at a reduced level, but many employers, especially those in vulnerable business sectors, will now face making staff redundant. Until we are able to resume sociable activity much of our economy will slip into hibernation. It may well be that the prince to wake these sleeping beauties will be a working vaccine. Only time will tell.

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