NEWS – TUESDAY 25TH NOVEMBER 2020
NEWS – TUESDAY 25TH NOVEMBER 2020
COVID-19 SUPPORT FOR BUSINESS
Here is an update on the latest information on the Coronavirus Job Retention Scheme and the VAT Deferral New Payment Scheme, see what actions you may need to be taking: –
Coronavirus Job Retention Scheme (CJRS)
The CJRS has been extended to 31 March 2021 for all parts of the UK. From 1November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. The government will review the terms of the scheme in January.
Employers and their employees do not need to have benefited from the scheme before to claim for periods from 1 November.
Time limits you need to be aware of
- Submit any claims for periods up to 31October on or before 30 November – they will not be accepted after this date. Claims are subject to eligibility and the rules in force at the time.
- Submit any claims for November, no later than 14 December. You can claim before, during or after you process your payroll as long as your claim is submitted by the deadline.
- Keep any records that support the amount of CJRS grant you claim, in case HMRC needs to check them. You can view, print or download copies of your previously submitted claims by logging onto your CJRS service on GOV.UK.
For claim periods from 1 December, employers cannot claim CJRS grants for any days that their employee is serving a contractual or statutory notice period, including notice of retirement or resignation.
You can check if you’re eligible, and work out how much you can claim using HMRC’s CJRS calculator and examples – here:
There are now monthly deadlines for claims. Claims for periods starting on or after 1 November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday. The deadline to make claims for employees furloughed in November is Monday 14 December.
Here is a summary of the CJRS deadlines:
|Claim for furlough days in;||Claims must be submitted by:|
|November 2020||14 December 2020|
|December 2020||14 January 2021|
|January 2021||15 February 2021|
|February 2021||15 March 2021|
|March 2021||14 April 2021|
Publishing employers’ information
HMRC will publish the names, an indication of the value of claims and Company Registration Numbers of employers who make CJRS claims for periods from December onwards. HMRC will notify you with details of when this information will be published.
For claim periods from December, employees will also be able to check if their employer has made a CJRS claim on their behalf through their online Personal Tax Account.
VAT Deferral New Payment Scheme
Businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, businesses can make up to 11 smaller monthly payments, interest free. All instalments must be paid by the end of March 2022. They will need to opt-in to the scheme, and for those who do, this means that their deferred VAT liabilities do not need to be paid by the end of March 2021.
The VAT Deferral New Payment Scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder. Because of that, HMRC is unable to provide an agent service for the scheme. Businesses that can pay their deferred VAT should still do so by 31 March 2021.
You can find further information on GOV.UK by searching ‘Pay VAT deferred due to coronavirus’.
TAX NEWS – TUESDAY 25TH NOVEMBER 2020
UK bosses rush to sell stakes over capital gains tax fears
City brokers and accountants say they had been swamped with calls from company bosses preparing to sell down stakes in businesses ahead of a potential increase in capital gains tax next year. Tim Stovold, partner at Moore Kingston Smith, calculated that selling a business worth £5m at current CGT rates would see an entrepreneur pay £900,000 in tax – a 10% CGT rate on the first £1m and 20% on the remaining £4m. However, if CGT and income tax rates were aligned and business asset disposal relief scrapped, an additional rate income taxpayer would pay CGT at 45% on the £5m business – a total of £2.25m. Heather Self, partner at Blick Rothenberg, said many of her clients who had been thinking about selling were bringing forward plans since a review commissioned by Rishi Sunak last week recommended aligning CGT with income tax. Separately, research by private equity firm Growthdeck found Londoners pay nearly 30% of the UK’s CGT despite being home to just 13% of the population, with taxpayers in Kensington and Chelsea paying the most. Gary Robins, head of business development at Growthdeck, said: “For over £500m of capital gains tax to be paid a year in Kensington & Chelsea is astonishing […] More taxpayers should look into whether EIS investment might be a sensible way for them to defer enormous CGT bills, as well as saving on income tax and inheritance tax.”
Financial Times, Page: 10 City AM
Energy industry calls for UK to adopt carbon trading after Brexit
The UK has been urged to reject calls for a carbon tax after Brexit and instead opt for a carbon trading system, arguing that this would be the most efficient way to cut pollution.
SMEs NEWS – TUESDAY 25TH NOVEMBER 2020
Government urged to tell shoppers to snub Black Friday sales
Retail and business groups have urged the Government to tell shoppers to avoid the Black Friday sales and save their Christmas spending for the high street. They warned that small shops could disappear from communities if they do not receive support when they reopen. Mike Cherry, chairman of the Federation of Small Businesses, said: “After eight months of disruption, and fresh restrictions on the way, small businesses need your help now more than ever. We’re calling on all shoppers to buy from independents over Black Friday and beyond – be that online, or safely in-person when they’re allowed to re-open their doors. It would be fantastic to see politicians of all stripes getting behind this message.”
New council powers to tackle COVID-19 breaches
Downing Street has announced new powers for local authorities, allowing them to shut down businesses for up to a week for breaching coronavirus regulations. The new measures will allow councils to “formally request rapid improvement” from offending firms, and close premises for 48 hours or seven days “where appropriate through the issuing of notices”, according to the Prime Minister’s spokesman. Breaking improvement notices and restriction notices will attract fines of £2,000 and £4,000 respectively. Business leaders warned against a “heavy-handed” approach. “The last thing a small business needs right now is the return of Captain Clipboard,” warned Craig Beaumont of the Federation of Small Businesses.
The Daily Telegraph, Business, Page: 1 Daily Mail
Ministers told to extend access to Ombudsman
Hundreds of thousands more small companies must be granted access to independent redress services, the Government has been told, in order to address an “imbalance of power” with telecoms and energy suppliers. The size of businesses able to make a complaint about telecoms or energy, for example, is different – with the limits described as “arbitrary” by the FSB. Matthew Vickers, chief executive of Ombudsman Services, said that it was regularly forced to “turn away” businesses because they were too large and that dispute resolution in energy and telecoms should be brought into line with financial services.
EMPLOYMENT NEWS – TUESDAY 25TH NOVEMBER 2020
Sunak pledges £4.5bn to help the unemployed back to work
Rishi Sunak will today pledge to spend £2.9bn to help a million unemployed people back into work. As part of his Spending Review, the Chancellor will announce a new “Restart” programme that will see those who have been out of work for more than 12 months provided with intensive and regular support that is tailored to their circumstances. Additionally, Mr Sunak will put another £1.4bn into extra help for those who have been jobless for more than three months. There will also be £1.6bn for the Kickstart scheme, launched in August, which the Treasury has said will create up to 250,000 state-subsidised jobs for young people. Matthew Fell, policy director of the CBI, said the chancellor was right to focus on job creation as the economy looked to recover in 2021. “COVID-19 has swept away many job opportunities, for young people in particular,” he said. “The scarring effects of long-term unemployment are all too real, so the sooner more people can get back into work the better.”
PROPERTY NEWS – TUESDAY 25TH NOVEMBER 2020
Property boom as buyers trade up
With the stamp duty holiday boosting the property market earlier this year, residential transactions were up 8.1% to 105,630 in October compared to the year earlier period. “Residential transactions have increased incrementally each month [since May], reflecting the gradual easing of coronavirus public health restrictions for the property market and the introduction of residential transaction tax holidays within the various UK administrations,” HMRC said. Growth has been driven at the higher end of the market by householders looking to trade up for bigger homes, but analysts said some of this demand was starting to fade due a reduction in stock on the market.
The Times, Page: 48 City AM
PENSIONS NEWS – TUESDAY 25TH NOVEMBER 2020
Government tipped to introduce 25% flat rate pensions tax relief
Rishi Sunak’s rumoured move to create a flat rate on pensions tax relief of 25% could leave a “big dent” in top earners’ pension pots according to Aegon. The Chancellor is said to be “very attracted” to the idea of moving to a flat rate, which could be announced in today’s spending review and would help the Government recoup some of the costs of COVID-19. Analysis from Aegon found under a flat rate of 25%, a basic rate taxpayer paying £100 a month into their defined contribution pension would see this topped up to £133.33 rather than the current £125, an extra £8.33. However, a higher rate taxpayer who currently sees their £100 increased to £166.66 would see this reduced by £33.33.
CORPORATE NEWS – TUESDAY 25TH NOVEMBER 2020
Booming retailers told to return coronavirus aid
The CEO of online electricals retailer AO World has urged fellow retail executives to reconsider their decision to keep business rates relief and furlough cash handed out during the pandemic. John Roberts said the argument that business rates were unfair was a separate issue – this is about whether it is right to pay out dividends on profits after taking taxpayers’ cash. Mr Roberts said: “The pandemic is a societal challenge, and I think all people and individuals and businesses should do their bit.” He added: “We live by the mantra of if I had to explain my actions to my mum over dinner tonight, would she be proud? Everyone knows what that means for their businesses. Maybe they [the supermarkets] should go and ask their mum.”
The Times, Page: 45 The Guardian, Page: 37 The Independent, Page: 52 Daily Mail, Page: 75
ECONOMY NEWS – TUESDAY 25TH NOVEMBER 2020
Chancellor to unveil spending plans for the coming year
Rishi Sunak will unveil the Government’s spending plans for the coming year today with his Spending Review expected to include details on public sector pay, NHS funding, the state of the economy and a new jobs programme. The Chancellor will announce that the foreign aid budget will be cut by £4bn a year to £10bn as part of moves to shore up Britain’s finances as the country recovers from the pandemic. Ministers will introduce legislation to allow spending to be kept at a reduced level for several years. There have also been reports that the Chancellor is considering a pay freeze for all public sector workers except frontline NHS staff. The economy is projected to be 10% smaller than it was pre-virus with tax revenues dramatically down and public borrowing forecast to rise to £372bn, compared to the £55bn the Government had originally expected to borrow.
OTHER NEWS – TUESDAY 25TH NOVEMBER 2020
Accountants and bankers swear the most at work
A survey of 1,400 employees at 100 UK companies commissioned by Savoy Stewart found that bankers, accountants and lawyers are the most foul-mouthed during internal meetings across British workplaces. Accountants and bankers lead the league table in a survey of 14 business sectors. Lawyers were in second position, followed by workers in travel and hospitality and sales. The preferred expletive for bankers and accountants was the old Anglo-Saxon stalwart of f***. Lawyers, on the other hand, were more partial to bullshit, presumably in reference to their opponents’ legal arguments. The research found that media professionals were mostly fond of bollocks. Those working for charities and volunteering were found to be the least likely to swear during meetings.
The Times, Page: 28
Contact Paul Southward [Tax Consultant]