Furlough Scheme Eligibility

 

HMRC's official stance on whether a business can claim furlough for employees;

If your employer cannot maintain their workforce because their operations have been affected by coronavirus (COVID-19), they can put you on furlough and apply for a grant to cover a portion of your usual monthly wage costs (only for time you’re on furlough).

Our interpretation of an employer not being able to maintain its workforce, and how this would affect a business, could come in the form of the following:

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• Supply chain being interrupted due to COVID, and thus not being able to provide the service or goods you would usually.

• The restrictions affecting the supply of service, ie. hospitality sector and businesses affected by the local lockdowns.

• Employees shielding due to personal circumstances 

• Drop in turnover, due to various reasons but generally in response to the pandemic

 

If your business is not financially affected by any of the restrictions, ie. if you are managing to provide a remote service, or are working from home and have adjusted your business model to ensure you are still generating the same income, then claiming furlough in this position would not be in keeping with the conditions of the scheme.

We have been advised by our regulatory body that HMRC will have an aggressive approach to the investigation and penalty structure to punish anyone found to be abusing the scheme, and a penalty of 100% of the overclaimed furlough will be charged.  This will apply to anyone who has overclaimed and not returned funds.

So whilst we encourage you to claim what you are due if you feel your business has been affected, we would ask that you can be sure your financial position reinforces the impact that COVID has had on your business.  Please feel free to get in touch if you would like to discuss your personal situation in more detail.

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Self Assessment Reminder - TAX DUE!

 

A reminder that your Self Assessment tax is still due in January 2021.

There was a deferral on the July 2020 payment on account, this was extended until January 2021, which means this along with any balancing payment for the 19-20 tax return will still be due in January 2021 as normal.

HMRC accept that this year has brought financial challenges, and if you are unable to make you payment in full by January 2021, you can apply online to set up a payment plan here, via your personal tax account, so long as your outstanding balance does not exceed £30,000.

Usually HMRC will have a maximum term of 12 months on any repayment plans accepted for income tax repayments.

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Self Employed Income Support - 3rd Grant

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Self-Employment Income Support Scheme (SEISS) third grant: Full details now published 
Full details of the third SEISS grant to support self-employed people affected by coronavirus have been published on GOV.UK.  

The rules on who is eligible to claim are different to those for the previous SEISS grants. However, a Self Assessment tax return for the tax year 2018 to 2019 showing self-employment income (unless one of the existing exceptions applies) will still need to have been submitted in order to claim.  

The third grant will be based on 80% of three months’ average trading profits, paid out in a single taxable installment capped at £7,500, and will cover the period from 1 November to 29 January 2021. Self-employed people who are eligible will be able to claim the third grant at any time from 30 November 2020 to 29 January 2021.  

What clients should do to get ready?

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• Check who is eligible to claim as this is different to the previous SEISS grants.

• Be aware that, like SEISS 1 and 2, tax agents/accountants cannot claim this grant on behalf of their clients; they must do so themselves. If an agent tries to make a claim on a client’s behalf, it will trigger a fraud alert that will delay the payment. Applying online is quick and easy. Similar to the process for SEISS 1 and 2, it takes just 5 minutes and they can do it on a smartphone. 

 

Who is eligible?

 
To make a claim for the third grant, clients must meet a number of conditions, and make an honest assessment about whether they reasonably believe their trading profits will be significantly reduced due to coronavirus. 

As previously, the third grant will also be subject to Income Tax and self-employed National Insurance and must also be reported on 2020 to 2021 Self Assessment tax returns.  

As before, to make a claim for the third grant, individuals must:

 

• be self-employed or a member of a partnership. They cannot claim the grant if they trade through a limited company or a trust 

• have traded in both the tax years 2018 to 2019 and 2019 to 2020.

 

For the third SEISS grant clients must also: 

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• either be currently trading but are impacted by reduced business activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus  

• declare that they intend to continue to trade, or restart trading, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits

• only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus. Reduction in profits due to increased costs (such as having to buy masks) does not make a business eligible for the third SEISS grant.  

 

When deciding whether the reduction is significant, clients will need to consider their wider business circumstances.  
They expect individuals to make an honest assessment about whether they reasonably believe their trading profits will be significantly reduced compared to what they would otherwise expect to achieve during this period. 

Your business must have been impacted on or after 1 November 2020. Claimants must keep evidence that shows how their business has been impacted by coronavirus, resulting in reduced activity, capacity or demand, or a temporary inability to trade.

More information

More information and examples to help customers check eligibility to claim is available on GOV.UK. 
They are contacting all self-employed people in the UK that may be eligible to let them know about the third grant.  

A fourth grant will also be available from February 2021 to April 2021. We’ll tell you more about that nearer the time, including how much it will be and the rules for claiming. 

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Tax Avoidance Schemes Warning

 

HMRC has launched the ‘Tax avoidance: don’t get caught out’ campaign. The campaign is about helping people make informed choices about their tax affairs, so they aren’t tempted by avoidance schemes that promise higher take-home pay, only to be left with unexpected tax bills.

These schemes are marketed through word-of mouth and online price comparison-style websites to contractors. HMRC are aiming for individuals to be better informed about the consequences of avoidance. The ‘Tax avoidance: don’t get caught out’ page contains guidance and personal stories so contractors can educate themselves about the signs and dangers of tax avoidance schemes. If you fall into this category, please have a read through the guidance.

They have also published the 'Use of Marketed Tax Avoidance Schemes in the UK' report, which brings together information about the numbers and characteristics of taxpayers using avoidance schemes.

It includes the types of schemes most used, occupations, locations and the declared incomes of those involved. They are doing this so they can make sure the people most likely to be offered tax avoidance schemes fully understand the risks, and can take steps to avoid being caught up in these schemes.

 

COVID Town Centre Adaption Grant

 

The Town Centre COVID Adaption Grant is available to retail and service businesses, located within West Dunbartonshire town centre areas to assist with the costs of adapting their premises in order to meet the Government requirements for Covid-19 physical distancing and safety.

This is a discretionary funding programme which will provide 50% of the business’s expenditure up to a maximum grant of £1,000. Please note the minimum spend you can apply for through this grant is £100. This grant fund operates on a first come first served basis and will close when the budget has been fully committed.

For further information please email business.support@west-dunbarton.gov.uk or call 01389 737777.

 

 

WE WILL ISSUE ANOTHER UPDATE IN DUE COURSE