Category: Updates

Germ

What did Rishi mean I get 80%?

Posted on | by Jade Donno | Leave a Comment on What did Rishi mean I get 80%?

What did Rishi mean I get 80%?

The government has at last announced a package of support for self-employed individuals and clarified more about how to access the coronavirus job retention scheme.

Let’s start with the Coronavirus Job Retention Scheme:

In terms of the clarified advice on the Coronavirus Job Retention Scheme, we have learnt:

  • You can claim for any employees who have been PAYE on your payroll including part-time or full-time employees, flexible or zero hours employees, employees on agency contracts who are now NOT working
  • If the employee is currently on Statutory Sick Pay, e.g. because they are self-isolating, they are not eligible for the scheme until they have come off Statutory Sick Pay
  • You will get a grant for the wages you will pay out to Furloughed employees
  • The “up to £2500 per month” is actually “up to £2500 per month + associated Employer NI contributions, and minimum enrolment employer pension contributions on that wage”
  • The scheme is not yet live, but when it is we will be in contact for how you can make a claim.

Further details can be found here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

A quick summary of the grant being made available for self-employed individuals:

Self-employed individuals will be eligible of a taxable grant up to £2500 per month for at least 3 months, which will be equal to 80% of their profits. And the self-employed can carry on working to access this grant. So far so good. But with all these things there are caveats, namely:

  • If you are a director of a limited business, or operate through a personal services company then this scheme does not apply to you
  • You need to have a trading profit of less than £50, 000 in 2018-19 or an average trading profit of less than £50,000 from 2016/17, 2017/18 and 2018/19.
  • More than half your income in these periods must come from self-employment. If you started trading between 2016 – 2019, HMRC will only use the years that you filed a self-assessment tax return
  • You need to have submitted your personal tax return for 2018/19 (and if you haven’t you must do so by April 23rd 2020)
  • You have been trading in 2019/2020
  • You need to have lost money due to COVID-19

You may be thinking, but I’m self-employed but get paid as a mixture of dividends and salary. Why can’t I access this scheme? The government may have put IR35 back for a year for the private sector, but they do seem to be making a point here!

Full details of the scheme can be found here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

How will HMRC work out what I can claim?

HMRC will take your trading profit for the last 3 years you have traded, then divide by 3 and divide by 12 to get your average monthly profit.

Example: Dave is a self-employed plumber who has been trading for 3 years. In his self-assessment tax returns he declared a profit of £48 000, £35 000 and £45 000. His average monthly profit is: (48 000 + 35 000 + 45 000)/(3*12) = £3 556. This means he would be eligible to claim for £2500 per month of grant.

Example: Sarah is a mobile hairdresser and started trading in May 2019. Her self-employed income was 20% of her income for the year, so she is not eligible for the scheme, as her trading profits in tax year 2018/2019 was not more than half of her taxable income for 2018/2019.

Example: Rishi is a taxi driver and started trading in April 2018. His trading profit in 2018/2019 was £20 500. He got all of his income from self-employment in 2018/2019. He would, therefore, be entitled to £20 500/12 = £1708.33 of a monthly grant.

How do I make a claim?

If you are eligible, HMRC will be in touch.

What help is available to me as someone who is self-employed but operates through a limited company and doesn’t have premises?

In this scenario then you may be able to access a grant via the Coronavirus Job Retention Scheme. I.e. if you pay yourself a salary through payroll, then you may be able to get 80% of this salary. However, you would need to prove you are no longer working and have Furloughed yourself to access the scheme.

If you have any questions please email jade@1accounts.co.uk and she will be happy to help!

The United Kingdom

Here to Help You and Your Business Together.

Posted on | by Jade Donno

Here to Help You and Your Business TOGETHER

On Friday the 21st of March the Chancellor set out a package of measures to support public services, people and businesses through the period of disruption caused by COVID-19.

The package of measures to support businesses includes:

  • The Coronavirus Job Retention Scheme
  • Deferring VAT and Income Tax Payments
  • A Statutory Sick Pay relief package for SME’s
  • A 12-month business rates holiday for all retail, hospitality and leisure businesses in England
  • Small business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief
  • Grant funding of £25000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SME’s through the British Business Bank.
  • A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
  • HMRC Time To Pay Scheme

We will keep you informed about the details of each of these packages and how to apply. Be safe and stay strong.

CORONAVIRUS JOB RETENTION SCHEME

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible.

Positive mind

Eligibility:

You will need to:

  • Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

DEFERRING VAT AND INCOME TAX PAYMENTS

The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

All UK businesses are eligible.

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

VAT on ipad

INCOME TAX

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

If you are self-employed you are eligible. This is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

SUPPORT FOR BUSINESSES WHO ARE PAYING SICK PAY TO EMPLOYEES

The Government will make legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

You are eligible for the scheme if your business is UK based and your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020.

SUPPORT FOR BUSINESSES THAT PAY BUSINESS RATES

Business rates holiday for retail, hospitality and leisure businesses

The Government is introducing a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector
  • Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
    • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
    • for assembly and leisure
    • as hotels, guest & boarding premises and self-catering accommodation


How to access the scheme:

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

See: https://www.gov.uk/calculate-your-business-rates where you can estimate the business rate charge you will no longer have to pay and further guidance can be found at: https://www.gov.uk/government/publications/business-rates-retail-discount-guidance

 CASH GRANTS FOR RETAIL, HOSPITALITY AND LEISURE BUSINESSES

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

You are eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector


Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

Accessing the scheme:

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

To find your local authority: https://www.gov.uk/find-local-council

SUPPORT FOR BUSINESSES THAT PAY LITTLE OR NO BUSINESS RATES

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property


How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

To find your local authority: https://www.gov.uk/find-local-council

SUPPORT FOR BUSINESSES THROUGH THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch this week to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.

You are eligible for the scheme if:

  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

How to access the scheme

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

The scheme will be available from early next week commencing 23 March.

We will keep you informed on how to apply as the details emerge.

SUPPORT FOR LARGER FIRMS THROUGH THE COVID-19 CORPORATE FINANCING FACILITY

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.

Bank

This will support your company if it has been affected by a short-term funding squeeze and allow you to finance your short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms. All UK businesses are eligible. he scheme will be available early in week beginning 23 March 2020. We will provide information on how to access the scheme here shortly. More information is available from the Bank of England: https://www.bankofengland.co.uk/markets/market-notices/2020/ccff-market-notice-march-2020

SUPPORT FOR BUSINESSES PAYING TAX: TIME TO PAY SERVICE

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service.

Clock on grass
Alarm clock

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call them nearer the time.

Alarm clock on yellow background

INSURANCE

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

The copy has been taken and edited from the Government COVID-19 Web pages:   https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-deferring-vat-and-income-tax-payments

Electrician and number 1

What help is there for the Self-Employed?

Posted on | by Jade Donno | Leave a Comment on What help is there for the Self-Employed?

What help is there for the self employed?

It seems that every day the realities of the situation the economy is in just gets worse. I am sure you are like us you are pleased that the government is pumping money into small businesses. But what happens if you are self-employed or trade as a sole trader rather than limited business?

So, included in this blog is a summary of what help is available for you if you are self-employed or worried about your personal financial affairs.  We are monitoring this closely and will be in touch once we know more.

Universal Credit 

Universal Credit is a monthly payment to help with your living costs. It is available for anyone, even if you are self-employed. But as always you need to meet fairly specific criteria; namely you are on a low income or out of work.  If you’re expected to look for and be available for work, then it needs to be identified whether you’re ‘gainfully self- employed’.

Gainful self-employment means that:

  • your main employment is self-employment
  • you have self-employed earnings
  • your work is organised, developed, regular and in expectation of profit

As you would expect, you must provide evidence about your business and what you are earning through your business.

Money tree in hand

If you’re gainfully self-employed, your Universal Credit payment may be calculated using an assumed level of earnings, called a Minimum Income Floor.  It’s based on what an employed person on minimum wage would expect to earn in similar circumstances. If you earn more than this, then your Universal Credit amount is based on your actual earnings. If you earn less, the Minimum Income Floor is used to work out how much you can get. You may need to look for additional work to top up your income.

To check if you are eligible for Universal credit go to: https://www.gov.uk/self-employment-and-universal-credit

Mortgage Repayment

From 17th March you can ask for up to a three-month repayment deferment on your mortgage to give you some breathing space. This deferment applies to homeowners and buy-to-let landlords, to allow them to pass on the payment reduction or deferment to their tenants. It will not affect your credit score. However, you must agree your repayment deferment with your bank, otherwise you may skip a payment and it will show a default on your credit score. Please speak to your bank if you want to organise a deferment on your mortgage.

House key ring

Talk with your network and get creative

Now is not the time to lie low. Now is the time to get talking to your network. Firstly pick up the phone, otherwise email or message via social media. They may be aware of some opportunities for you to generate some work. Now, is also the time to be creative with your skill set. For example, if you run a hospitality business and can’t work from home, how about offering skype one-to-one cooking classes?

Event cancellations

If you lost money due to an event being cancelled the outline is:

  1. Contact the organiser first
  2. Organisers that postpone events don’t have to refund until they announce the new date
  3. Ask your ticketing platform about refunds
  4. If you are struggling to get a refund then your credit card provider could help with a refund

You might not get all of your money back – but it’s worth fighting for.

Event plan written on notepad

Time to Pay Arrangement

Lastly, a dedicated Helpline has been set up to help businesses & self-employed in financial distress and with outstanding tax liabilities. Call this helpline to be able to agree a bespoke Time to Pay arrangement with HMRC. This is where you agree with HMRC a bespoke payment plan for your outstanding tax liabilities. If you are concerned about being able to pay your tax due to COVID-19, talk to us first as we can help you plan your call to HMRC’s dedicated helpline on 0800 0159 559.

July 2020 payment on account

As announced on Friday you could defer this payment but as it is 22 March, I would keep this option on the back burner as you may still have to pay it in January 2021, it is effectively a loan.

VAT Deferment

VAT on ipad

We do not know enough about this, but again it is a deferred loan that may help you now.  If you are going to take advantage of this “loan” I would take it, put it in the bank and pay it back once business is back as usual, treat it like a quick safety net but it is a loan.

Our Advice

As your accountants we can help you as part of our service (no extra charge at all!) we can help you to plan initially for the next four months by looking at your business online and helping you to forecast.  We can also negotiate with HMRC or the banks for you and anyone else that you want us to, we are here to help.

I would also suggest that you list all of your household bills including leisure time (restaurants, shopping etc) and make decisions about what you are paying for, again we can help.

Once we have done that the next step is to Plan Plan Plan and Plan even more.  We will all get through this together and once we are back to business in full with the right planning and staying on top of your business you will without doubt be stronger and in a great position to thrive.

Working From Home where POSSIBLE

Posted on | by Jade Donno | Leave a Comment on Working From Home where POSSIBLE

Working From Home where possible

Due to the current Covid-19 crisis, the government has issued measures stating that everyone should work from home if they can. It is important to recognise that for many businesses, working from home is impossible as they are customer facing or perform manual work that requires employees to be present.

However a lot of businesses can be completely of partly moved to home working with some very minor changes. Administrative departments for example should be able to move to home working relatively easily. This way of working could turn into the new normal, with team meetings at hubs and offices a thing of the past. Whatever happens, our lives will definitely be different after this global health crisis.

As accountants it is our job to help our clients adapt to a changing business environment. We are pleased that we can lead the way in working from home, below are some tips for how to best optimise your business to be able to work from home.

Technical Tips:

Get laptops.  Ditch the desktop computer and buy yourself and staff members laptops, this gives you the flexibility to work anywhere. Our team all use Surface Books with small hard drives as we use the cloud for all our storage. Each desk at the office has a docking station which allows any staff member to use any desk with the same set up which allows for flexibility in the office as well.

Go Online. Get rid of your server and look at having all your software and storage online.  Our IT partner Platform 365 have helped us to ensure we can operate 100% online and provide us with much needed remote support.

  Microsoft 365. Changing to subscription-based Microsoft 365 has helped us so much. We store our files on One Drive and have access to the online versions of Microsoft Office’s programmes such as Word and Excel. This allows our files and documents to be securely shared and accessed by our team on our laptops and smartphones from wherever we are working.

Accounting Online.  Our preferred software is Xero, partly as it is an online platform and allows you to run your business from anywhere, but we also work with other platforms that have a similar function. Having your accounting software online with tools such as Receipt Bank makes working online and communicating with your accountant very easy. For example, we can remotely cover your book-keeping team should they fall ill and be unable to work. This will give you peace of mind that your business will still be able to manage its cash.

Online tools. There are many online tools that can help your business to thrive and make you more efficient, we are more than happy to help and advise you with these. We use Karbon to keep track of our work and see where the team are on our clients jobs, Futurli to see trends in our business and our clients, and Zoom to keep in touch with our clients and the team.

Personal Tips:

Paul regularly works from home on a Wednesday and many of our team also have at least one working from home day a week. Here are our top tips for working from home for you and your employees

Limit Distractions. Try not to work where the family are, they are distracting and you won’t get much done. It can be tempting to have family and friends pop round for a coffee whilst you are working, but you need to be strict and politely tell them when you will be available.

Get Dressed.  Make sure to change into your daytime clothes and don’t be tempted to sit working in your PJ’s all day, especially if you have video calls! This will have the psychological effect of getting your brain ready for work as opposed to chilling out all day. The same goes for working from your bed.

Keep moving. Exercise is important for keeping both your body and mind healthy, especially when working from home. I try to not spend sustained periods of time sat in isolation at my desk, I have found that even going out for a coffee or sitting in another part of the house or garden helps to break up the day. Taking the dog out for a walk at lunchtime or going for a morning run are great ways to include exercise into your daily working routine.

Flexible Hours. For us a working day is 7 1/2 hours and as long as the work gets done they can be completed at any time in the day. If it suits to do something during the day and finish in the evening that is fine.

Communication. Keep in regular contact with the rest of your team. We have a scheduled group call at 10am every morning to catch up with our team members who are working from home during this time.  It helps us all stay on the same page and allows us to continue to work together well.  It also stops us from getting lonely!

Hands in the middle with 1 Accounts logo

Tough Times Ahead – We Are All In This Together

Posted on | by Jade Donno | Leave a Comment on Tough Times Ahead – We Are All In This Together

Tough Times Ahead – We Are All In This Together

Without doubt we are facing an unprecedented difficult time. Small business owners are trying to make money for themselves, their family and staff. It is looking likely that we will have to make some cutbacks and decisions that go against the grain.

As a small business we have a team to pay and clients to look after. We could just throw in the towel and say that we are all doomed; but we have sat back, feet on the table and reflected on the situation. We have looked at our own business, how we should respond and what new opportunities are available.

1 Accounts is a family run business with Paul, Jenni, Jade and Katie Donno all working in the office. They all depend on 1 Accounts as well as the fantastic team around them. We have very strong family values and we hope that this comes across to our clients in all that we do.

Unfortunately we will know someone that may well loose a loved one and we will be there to help them and support them in the best way we can. Pauls dad has been in poor health and the Donno family are continuously worried about him contracting the virus. We have found ways of supporting them with Paul’s mum phoning him nearly everyday with her food shopping order.

We are being told that 80% of the population will catch the virus. Experts have said that it is actually a mild flu and most people will recover. This means that at the end of this pandemic we will need to live again. The 1 Accounts team are looking forward to going back to the pub for a beer of three.

Here are our top tips for small business owners: 

Be Positive 

There is a lot of fake news out there and the media loves to sensationalise what Boris says. On March 16th Boris announced that where possible work from home. He used the phrase where possible as it is not possible for everyone. We would suggest you limit the news, especially Facebook (hard we know) so you can stay positive.

Smiling Child

What do your customers need?

Shipping button

We have seen some great examples in and around Haverhill. Nine Jars are delivering coffee and paninis to the high street for £5, they are also offering food deliveries from their normal menu; for every 10th meal they deliver they will donate one to the local food bank. This is a great example of how to think ‘outside of the box’. Another local business Ben & Ella’s Farm Shop are offering an ‘Isolation Box’ that they can deliver.  If customers can’t come to you – go to them.

Even Domino’s have a ‘no contact’ delivery service now – so even the big boys are adapting.

Small Wins

Look for the small wins and keep your overheads covered. When this finishes in a couple of months people will want to engage with you and will be craving human contact. You will need to plan, plan, plan to be able to survive the next couple of months. It is a good idea to watch China and see what they are doing, they are in front of us and will be showing the rest of the world what is next and how there economy is starting to bounce back. Also watch out and listen to people who have had the virus and how quickly they have recovered from it.

Communicate!

Phone

Tell your customers what you are doing and if you are suffering, tell them that too. Being open will help to gather the support you need. Also keep your team informed, this is a worrying time for them too. You need them as much as they need you.

Don’t cut back on your Marketing!

If anything increase your marketing and keep your message going. Tell your investors and suppliers what is happening and ask for help if needed.

If you are stuck on your social media speak to Jade and she will be happy to help you free of charge whilst the crisis is on. We want to help you in anyway we can to keep your business afloat. Afterall we need your business to keep going, to keep ours going.

Cash Is King 

You will need more cash now more than ever before. Securing your cash is paramount. The government has announced that it will help small businesses with Statutory Sick Pay and government back lending; we will update you on this when we know more.

HMRC are extending their time to pay arrangements for PAYE, VAT and Corporation Tax to help you through this. We again can help you to organise this.

Check your business interruption insurance to see if you are covered and work with your broker to see how you can claim.

Look at your personal position and see if you can cut costs. Sky sports are not showing the Football or Rugby, now is the time to discuss this and get a reduction. Do you need the cinema and Gym membership if you can’t go?

We can help you and have changed our business model to treat your immediate needs above our normal day to day work.

We are all in this together.

Think Outside Of The Box

Your business will change by the end of this and hopefully for the better. We have lots of ideas and would be happy to brainstorm with you free of charge to help you get through this difficult period.

Gift Box

Be Kind

Above all, help your fellow small business and they will help you now and in the future. Do not take this opportunity to sell hand gel or toilet rolls at an inflated price, you will possibly have a more comfortable time now but you will not survive when business returns to normality. Paul still avoids a garage that inflated costs during the fuel crisis. Harming your reputation could be detrimental in the future.

 

Please give us a call – even if it is just to vent and we will be more than happy to help.

We are all in this together

Toy house with a key

POSSIBLE CHANGES TO CGT PRIVATE RESIDENCE RELIEF

Posted on | by Jade Donno | Leave a Comment on POSSIBLE CHANGES TO CGT PRIVATE RESIDENCE RELIEF

POSSIBLE CHANGES TO CGT PRIVATE RESIDENCE RELIEF

The government is currently consulting on important changes to private residence relief that are likely to be introduced from 6 April 2020.

The two possible changes, announced in the Autumn 2018 Budget are:

  • Firstly to limit to just 9 months the period prior to disposal that counts as a period of deemed occupation.
  • The second is to limit “letting relief” to periods where the taxpayer is in shared occupation with the tenant.

Final period exemption to be reduced

The final period exemption was for many years three years and was always intended cover situations where the taxpayer was “bridging” and waiting to sell their previous residence. However, 36 months was felt to be too generous and was allegedly being abused by a strategy known as “second home flipping”. As a result the final period relief was restricted to the current 18 month period of deemed occupation a couple of years ago. The latest proposal is to restrict still further to 9 months although it will remain at 36 months for those with a disability, and those in or moving into care.

Possible Lettings Relief Changes

Lettings relief currently provides a further exemption for capital gains of up to £40,000 per property owner. The additional relief was introduced in 1980 to ensure people could let out spare rooms within their property on a casual basis without losing the benefit of PRR, for example where there are a number of lodgers sharing the property with the owner.

In practice lettings relief extends much further than the original policy intention and also benefits those who let out a whole dwelling that has at some stage been their main residence. It is those situations that the government appear to be attacking under the proposed changes.

Note that those who are renting their property temporarily whilst working elsewhere in the UK or working abroad are unlikely to be affected by this change as there are alternative reliefs available under those circumstances.

Toy house and hands

“RENT A ROOM” RELIEF TO CONTINUE FOR AIR BNB LANDLORDS

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“RENT A ROOM” RELIEF TO CONTINUE FOR AIR BNB LANDLORDS

Last year HMRC carried out a review of rent a room relief and it was proposed that the availability of this generous relief would be restricted to situations where the taxpayer was resident for at least part of the time when the “lodger” was paying rent. The scheme currently exempts from tax gross rents up to £7,500 where rooms within the taxpayers’ main residence are rented out.

HMRC were concerned that the relief was being “abused” by letting out the entire property using websites such as Airbnb and living elsewhere temporarily whilst the tenants were in the property. An example would be renting out a house in south London during Wimbledon fortnight and potentially receiving up to £7,500 tax free.

Note that the Autumn Budget announced that the proposed restriction was not now being introduced.

happy new year typewriter

Happy New Year

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Happy New Year

The 6th of April marked the first day of the financial year. This brings a few changes to individuals and businesses.

The Personal Allowance 

The personal allowance (the amount you can earn before paying Income Tax) has increased from £11850 to £12500. This will lead to a small reduction in tax. For higher rate tax payers the allowance will increase from £46,350 to £50,000.

The National Minimum Wage

The national minimum wage has changed on the 1st of April 19.

  • For 25 years and older the minimum wage has changed from £7.83 to £8.21
  • For 21-24 years the minimum wage has changed from £7.38 to £7.70
  • For 18-20 years the minimum wage has changed from £5.90 to £6.15
  • For under 18 year the minimum wage has changed from £4.20 to £4.35
  • For an Apprentice the minimum wage has change from £3.70 to £3.90

Student Loans 

The earnings threshold has also increased for paying back students loans.

  • Plan 1 loans will rise from £18,330 to £18,935.
  • Plan 2 loans will rise from £25,000 to £25,725.

This will apply to all current and future student loans where employers make student loan deductions.

Auto-Enrolment 

The minimum amount for auto-enrolment has also increased. Employers now must contribute a minimum of 3% of the employees qualifying earnings (an increase of 1%). Employees must pay 5%. The total minimum contribution is now 8% (from 5%)

Preparation 

In preparation for the influx of personal tax returns we are preparing early this year. Our clients would have received an automatic email from Jade requesting information to complete their self assessment. This is not due to be submitted until January 2020, however we are aiming to have all tax returns completed by the end of the year!

Daisys for a march update

March Update

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1 Accounts March Update

We have stepped into spring with March, the clocks have changed meaning lighter evenings leaving the office very cheery.Here are just a few of the things we got up to in March.

Jade Went To Prision…

… but unfortunately they let her out!

Jade went to Highpoint Prision to see how rehabilitation is helping the ex-offenders. She was taken on a tour of the prison and then networked with the ex-offenders. Here at 1 Accounts we support Highpoints mission to help educate the ex-offenders so they can leave the prison and not re-offend. Jade learnt that many of the ex-offenders would like to leave and start their own business as employment is hard to find with a criminal record. Paul is due to speak at Highpoint in April to discuss how to become self-employed.

Katie turned 20

This month was Katie’s birthday! Although she works for Fiscale Ltd and not 1 Accounts Online due to accessibility she works from our offices and is part of the team. She was very grateful for all the birthday messages she received from clients! For her birthday she went to Prezzo and got loads of make-up, making her a very happy girl!

Great review

1 Accounts Cambridge got a great review from personal fitness trainer Joe Mitton:

” HIGHLY RECOMMEND!!!!!!!! I have known Mark for years and he has been nothing short of incredible in helping with my taxes, end of year accounts and a whole host of other issues. Accountancy isn’t my area at all yet Mark made it a seamless processes for me enabling me to get on top of and stay on top of my accounts.He always goes above and beyond and I recommend him to everyone!!!! Can’t thank you enough for everything you’ve done for me!”

James went to Paris

James went away to the city of love with his girlfriend. He came back with stories of climbing up the Eiffel Tower, eating French food and river cruises. He had such a great time he brought the office back tasty treats and keyrings!

Good Job Kerry

Our star bookkeeper is also the queen of payroll. She spent March preparing us for the payroll year ends. If anyone completing their own payroll is struggling please let Kerry know and she will be happy to help – Kerry@1accounts.co.uk

Lloyds Cyber Fraud

Jade went to the Jocky Club in Newmarket to hear Lloyds Bank speak about cyber fraud and how it is affecting business. She learnt the following tips:

  • If you get an email stating that bank details have changed always ring the person to find out if it is correct, also check the numbers over the phone! This is the same for internal emails as these can also be intercepted.
  • Use a £ sign in your password as many international keyboards do not include this symbol
  • Never give your bank log in details over the phone! No bank would ever need these details, no matter how convincing they sound.
  • Never click a link on an email from an unknown source (even the unsubscribe button)
  • Fraudsters are clever, it is easy to be fooled so be extra vigilant.

They also showed us this video about how easy it is for people to find out your passwords, make sure your password isn’t too obvious:

 

Accumulator Challange

In March we announced that we are sponsoring this years Accumulator Challenge. The challenge involves receiving a £50 note and having to make as much profit from it as possible. All of this is in aid of St Nicholas Hospice. For more information on how to sign up please email jade@1accounts.co.uk