by David Watkinson www.watkinsonblack.co.uk
WHEN you read this the deadline for the submission of 2020 self-assessment tax returns will have have passed.
The current environment remains extremely difficult for businesses and, in fact, are in many ways getting worse. The economy remains in lockdown due to the Coronavirus, and this will in all probability remain the case for a number of months. In addition, many businesses continue to face uncertainties following the exit of the UK from the EU trading block, despite the platitudes of the government. And if this was not enough, many businesses were impacted by the recent floods experienced in Mid-Cheshire.
HM Revenue and Customs (“HMRC”), despite repeated requests and submissions from many professional bodies, including the Institute of Chartered Accountants, and business associations, have consistently refused to extend the filing deadline. Therefore, if you have failed to submit your return by 31st January then you will be automatically charged a penalty of £100. However, there is some relief in that HMRC have confirmed that if an appeal is lodged against any penalty on the grounds that the delay is due to Coronavirus affecting either the taxpayer or their agent then they will accept that as a reasonable excuse and cancel the penalty. STOP PRESS. On 25th January HMRC suspended the late filing penalty until 28th February.
We are currently writing this column some 8 days before the deadline and are working hard at ensuring all Returns are submitted in a final form before that deadline, and we are confident that where we have received the necessary information from client we will achieve this. However, like most businesses, we have been affected by Coronavirus, with people working remotely wherever possible for the past 8 months, meaning that it may be more difficult for clients to get their information to us. In these few instances, we have decided as a practice not to rely on any statements from HMRC that penalties will be forgiven. Instead, we have decided that a Return will be submitted, wherever possible, for all clients, even if it is a provisional Return using estimated figures, with the additional difficulties caused by Coronavirus being given on the Return as the reason.
So where are we currently up to?
One of the major developments in the past month or so is the Supreme Court rulings, following appeals from the Financial Conduct Authority and various insurance companies against rulings in lower courts, that in many or most cases insurance companies must pay-out on claims brought under the policies due to Coronavirus.
We are accountants and not solicitors, and so are not qualified to advise in specific cases. However, it would seem that the claims fall into four main types:
– Losses due to disease
– Losses due to prevention of access
– Losses due to a combination of the above
– Losses compared to expected trends
If your claim falls into one of the above then you should find yourself covered. Our advise would be to contact your insurer in the first place. If you do not receive a positive response and wish to pursue it further then you seek legal advice.
Financially, there are a number of developments which you should be aware of.
Following the delay to the Autumn Budget we are expecting a budget in March. Following the extensive support that has been handed out to clients and individuals since the first period of lockdown it is expected that we may see some initial clawback of the cost of this support. Obviously, we cannot say what will be appear in the budget, but there are three areas which are often quoted as being areas that the government may look at:
1. Capital Gains Tax. Many commentators feel that there will be an increase in the rates of Capital Gains Tax and/or a reduction in reliefs available. Therefore, it may be advisable to ensure that any gains are made in the current tax year if possible.
2. Stamp Duty. Many commentators give this as a potential area that may be looked at.
3. Pension Relief. This has been an area that people have expected some reduction in the tax allowances for a number of years.
With regard to the Covid assistance:
1. The fourth period of the Self Employed Income Support Grant (“SEISS”) covers the period from 1st February to 30th April. Applications for the third grant covering the three months to 31st January are now closed. The details of the fourth SEISS grant, and the exact qualifying conditions, had not been confirmed at the date of writing, but the third grant covered 80% of average trading profits up to a maximum of £7500.
2. The Coronavirus Job Retention Scheme (“JRS”) continues at present up to the end of April. This covers 80% of the wages of “furloughed” employees up to a maximum of £2,500. The grant does not cover employer contributions for National Insurance or Pensions,
3. The Coronavirus Business Interruption Loan Scheme (“CBILS”) and the Business Bounce Back Loan (“BBLS”) both continue to be open to new applications. There have been no changes to the qualifying conditions. The BBLS is for smaller businesses and is available for loans up to £50.000. The CBILS scheme is for larger loans in excess of £50,000. Both are administered by a number of banks and other lenders, including Funding Circle, and applications should be made directly to the relevant lender. Most have simple on-line application forms.
WatkinsonBlack have considerable experience in all areas of taxation and businesss services, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.
