As we head into May and towards the summer months, we remain ever more optimistic that there is some light at the end of the Coronavirus tunnel. We are still alert to the possibility of a third wave but we are confident that we have put in place the measures necessary to reduce exposure to Covid within the office. We are very much hoping that visitors will be able to come into our building during the latter part of this month for face to face meetings.
Somehow Zoom and Teams whilst a good substitute during the crisis never quite replaced the social interaction of a physical meeting. Announcements regarding opening up will be posted on our website.
Sadly during the last month we have learned of the deaths of two long standing clients of the practice as a result of Covid-19 and we offer our condolences to their families along with our continuing support at this time.
The more senior staff at Walker Thompson have all now received their first vaccination and looking ahead to a second in the weeks ahead.
On 21 April, the online service for
applications for the fourth Self-employment Income Support Scheme (SEISS) grant
was opened for claims, HMRC confirmed.
All applications must be submitted by the
individual self-employed worker and cannot be handled by accountants or tax
advisers.
The fourth grant will be 80% of three
months' average trading profits, to be claimed from late April 2021.
Payment will be in a single instalment
capped at £7,500 in total and will cover the period 1 February to 30 April
2021. The scheme has been extended to those who filed a 2019/20 self-assessment
tax return prior to 3 March 2021.
Claimants must have been impacted by
reduced activity, capacity and demand, or have been trading previously and are
temporarily unable to do so. All claims must be made on or before 1 June 2021.
There is no requirement for an earlier SEISS
grant to have been claimed to be able to claim the fourth grant.
The fifth SEISS grant will cover the period
from 1 May to 30 September 2021 and will be available from July.
It will be set at 80% of three months'
average trading profits, paid out in a single instalment, capped at £7,500, for
those with a turnover reduction of 30% or more.
Alternately, it will be worth 30% of three
months' average trading profits, capped at £2,850 for those with a turnover
reduction of less than 30%.
Further details of the fifth grant will be
provided in due course.
Internet
link: GOV.UK
On 6 April, the Recovery Loan Scheme (RLS)
was introduced to replace the government's coronavirus lending schemes.
The RLS provides financial support to
businesses affected by the COVID-19 pandemic. The scheme gives lenders a
guarantee of 80% on eligible loans between £25,000 and £10 million to give them
confidence in continuing to provide finance to UK businesses.
The RLS is open to all businesses,
including those who have already received support under the previous COVID-19
guaranteed loan schemes, the Bounce Back Loan Scheme, the Coronavirus Business
Interruption Scheme and the Coronavirus Large Business Interruption Scheme
although the amount they have borrowed under an existing scheme may in certain
circumstances limit the amount they may borrow under RLS.
The RLS is initially available through a
number of lenders accredited by the British Business Bank.
Internet
link: British Business Bank website
Recent changes to IR35 'undermine the self-employed', says IPSE
The Association of Independent
Professionals and the Self-Employed (IPSE) has stated that the recent changes
to the rules relating to off-payroll workers, commonly known as IR35,
'undermine the self-employed at the worst possible time'.
The changes to IR35 took effect on 6 April
2021 and shifted responsibility for making the decision on employment status on
each contract away from contractors and personal service companies (PSCs) and
on to the client receiving their services. This has already been done in the
public sector.
Research carried out by IPSE found that 50%
of contractors planned to stop contracting in the UK once the changes took
effect unless they could secure contracts unaffected by them. 24% are planning
to seek contracts abroad; 12% plan to stop working altogether; 17% will seek an
employed role; and 11% are looking to retire within the next year.
Additionally, 24% of contractors said their
clients are planning to blanket-assess all their contractors as 'inside IR35'.
Andy Chamberlain, Director of Policy at
IPSE, said:
'The
changes to IR35 would do serious harm to the self-employed sector at the best
of times, but now they are adding drastic, unnecessary damage to the financial
carnage of the pandemic – undermining the UK's contractors at the worst
possible time.
'The
crucial problem with IR35 is still its complexity: in fact, it is so complex
that HMRC has lost the majority of tribunals on its own legislation. And there
remains serious doubts about the CEST tool HMRC designed to supposedly cut
through this complexity.'
Internet
link: IPSE website
The Confederation of British Industry (CBI)
has urged the government to extend the Kickstart Scheme to help young people
who are bearing the brunt of the subdued job market.
The Kickstart Scheme was launched in
September and promised to pay the wages and associated employment costs for
businesses taking on 16 to 24-year-olds in receipt of Universal Credit up to
six-month contract periods.
The UK unemployment rate fell to 4.9% in
the three months to February, according to the latest figures from the Office
for National Statistics (ONS). However, 56,000 workers were cut from company
payrolls in March, which represents the first monthly drop since last November.
Around 813,000 workers have been cut from
company payrolls in the last 12 months as the pandemic adversely affected the
jobs market. The ONS said young people continued to bear the brunt of the
crisis amid job losses in sectors such as hospitality and retail.
People under 25 accounted for more than
half of the jobs lost in the year to March, it added.
Matthew Percival, Director of People and
Skills at the CBI, said:
'Evidence
continues to mount that it is young people's jobs that have been hardest hit by
lockdowns. Support for jobs and training will be vital to making the UK's
economic recovery inclusive.
'Government
should confirm that the extra lockdown at the beginning of the year means that
the Kickstart Scheme will remain open for longer to allow businesses the time
to deliver opportunities for young people.'
Internet
link: CBI website
On 19 April, a government-backed mortgage
scheme to help people with 5% deposits get on to the housing ladder was made
available to lenders.
First announced at the 2021 Budget, the
scheme will help first-time buyers or current homeowners secure a mortgage with
just a 5% deposit to buy a house worth up to £600,000. The government says this
will provide 'an affordable route to homeownership for aspiring homeowners'.
The government will offer lenders the
guarantee they need to provide mortgages that cover the other 95%, subject to
the usual affordability checks.
The scheme is now available from lenders on
high streets across the country, with Lloyds, Santander, Barclays, HSBC and
NatWest having launched mortgages under the scheme and Virgin Money following
shortly.
Miguel Sard, Managing Director of Home
Buying and Ownership at NatWest, said:
'We
welcome the government's new mortgage guarantee scheme to give further support
to those with smaller deposits. For those customers, particularly younger or
first-time buyers, saving up for a big deposit can often be difficult, and we
know people in these groups are some of the hardest hit by the effects of the
pandemic.
'A government-backed
scheme will help segments of the market for whom homeownership has felt far out
of reach in recent months.'
Internet
link: GOV.UK
Employees who are working from home will
need to make new claims for tax relief for the 2021/22 tax year, HMRC has
stated.
From 6 April 2020, employers have been able
to pay employees up to £6 a week tax-free to cover additional costs if they
have had to work from home.
Employees who have not received the working
from home expenses payment direct from their employer can apply to receive
the tax relief from HMRC.
HMRC has also confirmed that the £6 per
week payment is available in full, even if an employee splits their time
between home and the office.
The allowance is to cover tax-deductible
additional costs that employees who are required to work from home have
incurred, such as heating and lighting the workroom, and business telephone
calls.
Last year an online portal was launched
that allows employees to claim tax relief for working at home. The portal was
set up to process tax relief on additional expenses for employed workers who
have been told to work from home by their employer during the coronavirus
(COVID-19) pandemic.
Internet
link: GOV.UK
The fourth Self-Employed Income Support
Scheme (SEISS) grant is now live and HMRC has set out the penalties for abuse
of the scheme.
An overclaimed SEISS grant includes any
amount of grant which the self-employed individual was not entitled to receive
or was more than the amount HMRC said the applicant was entitled to when the
claim was made.
Overpayments must be notified to HMRC
within 90 days of receipt of an SEISS grant.
When deciding the amount of any penalty,
HMRC will take account whether the taxpayer knew they were entitled to the
SEISS grant when they received it and when it became repayable or chargeable to
tax because the individual's circumstances changed.
The HMRC guidance states: 'If you knew you
were not entitled to your grant and did not tell us in the notification period,
the law treats your failure as deliberate and concealed. This means we can
charge a penalty of up to 100% on the amount of the SEISS grant that you were
not entitled to receive or keep.
'If you did not know you were not entitled
to your grant when you received it, we will only charge you a penalty if you
have not repaid the grant by 31 January 2022.'
If you would like further advice or require
a compliance review on your eligibility, please contact us.
Internet
link: GOV.UK publications
Losses from pension fraud rose to £1.8
million in the first three months of this year, according to figures from
Action Fraud.
107 reports of pension fraud were made in
the first quarter of 2021, an increase of almost 45% when compared to the same
period in 2020.
Pension scams often include free pension
reviews, 'too good to be true' investment opportunities and offers to help
release money from your pension, even for under 55s, which is not permitted
under the pension freedom rules.
Pauline Smith, Head of Action Fraud, said:
'Criminals
are malicious and unapologetic when it comes to committing pension fraud. They
are motivated by their own financial gain and lack any kind of empathy for
their victims, who can often lose their whole life savings to these scams.
'We
know pension fraud can have a devastating impact, both financially and
emotionally, but any one of us can fall victim to a fraud and it's nothing to
feel ashamed or embarrassed about. It's incredibly important that instances of
pension fraud and attempted scams are reported to Action Fraud.
'Every
report helps police get that bit closer to the people committing these awful
crimes. Reporting to Action Fraud also allows our specialist victim support
advocates to provide people with important protection advice and signpost them
to local support services.'
Internet
link: Action Fraud website
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