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Download the form by clicking the link below:2021-P11D-Checklist.pdf
The 2019/20 tax return filing due date on 31 January 2021 is not the only deadline of which self-employed individuals need to be aware this month.
Eligible individuals have until 29 January 2021 to apply for the third taxable grant under the Self Employment Income Support Scheme (SEISS). The grant is worth up to 80% of 3 months’ worth of average profits and is capped at £7,500.
Those potentially eligible for the grant should already have been contacted by HMRC.
In order to claim, you must reasonably believe that you will suffer a significant reduction in trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus during 1 November 2020 to 29 January 2021. You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.
As for the first two grants, the mechanism for claiming is via gov.uk Claim a grant through the Self-Employment Income Support Scheme – GOV.UK (www.gov.uk)
The Chancellor has announced the launch of a new COVID-19 Job Support Scheme, following the end of the UK furlough scheme in October.
The new Scheme will run for six months starting in November 2020, following the end of the current furlough scheme. Those who used the furlough scheme will be able to claim the job retention bonus and also support from the Job Support Scheme.
Under the Job Support Scheme, the UK Government will subsidise the pay of employees who are working fewer than normal hours due to lower demand. For a business to claim for a workers’ wages, the employee must work at least a third of their normal working hours and be paid as normal for these hours by their employer. For the hours employees can’t work, the government and the employer will each cover one third of the lost pay.
The grant will be capped at £697.92 per month, and all small and medium sized businesses will be eligible for the scheme; larger business will be eligible if their turnover has fallen during the crisis.
It will be open to employers across the UK even if they have not previously used the furlough scheme and it will run for six months starting in November through to the end of April 2021.
More details will be released in due course.
The Chancellor will also extend the Self-Employed Income Support Scheme on similar terms to the Jobs Support Scheme. A grant will be available to those eligible for the Self Employment Income Support Scheme Grant that will cover three months’ worth of profits for the period from November to the end of January 2021. It will cover 20% of average monthly profits up to a total of £1,875. A further grant will be available to the self-employed to cover February 2021 to the end of April 2021.
The UK Government has confirmed that in the event of redundancy, workers’ wages will be protected regardless of being on furlough.
In response to a minority of firms taking advantage of the current COVID-19 pandemic to pay a lower rate of redundancy, any furloughed workers that lose their jobs will now be eligible for redundancy pay based on normal wages, rather than the furlough rate. The UK’s 95 million furloughed workers are currently only being paid 80% of their normal wage, raising the anomaly in redundancy pay level.
Workers with more than 2-years continuous service that are made redundant are usually entitled to a statutory redundancy payment that is based on their length of service, age and pay up to a maximum statutory level. Additionally, the new law will also apply to statutory notice pay, which is where employees must be given a notice period before their employment ends. Notice periods can vary from one week to up to 12 weeks’ notice, depending on length of service. Another change will ensure basic awards for unfair dismissal cases will be based on full pay, rather than furlough-level wages.
It is estimated that 150,000 people have so far been made redundant during the crisis, but there are estimates that this figure could climb much higher, especially when the Government’s furlough scheme ends in October. Indeed, the National Institute of Economic and Social Research think tank warned that the ending of the furlough scheme could lead to 1.2 million people being unemployed by Christmas.
In a recently announced step by the UK Government to encourage employers to retain staff, further details about the Job Retention Bonus Scheme have been publicised. The plan will see businesses receive a one-off payment of £1,000 for every previously furloughed employee that earn at least £520 a month on average, if they are still employed at the end of January 2021.
To claim the bonus, employers will need to have relevant up-to-date payroll RTI records for the period to the end of January, and for an employee to be eligible employees must have been paid at lease £520 a month on average between 1 November 2020 and 31 January 2021. Details guidance on the process of how to claim the bonus will be issued in September 2020.
HMRC have sent us further details clarifying their stance on certain COVID-19 reliefs.
HMRC has confirmed that this has been notified as a state aid, following similar notification of the Coronavirus Business Interruption Loan Scheme (CBILS). Being in receipt of the BBL or CBILS could impact a potential R&D tax claim, particularly if it relates specifically to R&D expenditure rather than being used more generally to support the Company as they are intended. An area to watch out for when drafting loan applications.
The Future Fund provides up to £500m in convertible loans to high-growth innovative businesses and is not a state aid. The convertible loans are commercial, meaning they are not caught by s1138, allowing a full claim can be made under the SME scheme if eligible.
A significant number of small loans and grants have been provided recently through the Temporary Framework. These are deemed to be notified and will impact an R&D claim the same way as if a General Bock Exemption grant had been received in relation to a project. These are normally much smaller in size but can have a significant impact to a potential claim. It’s important to consider how these interlink with your R&D projects fully to avoid falling into any traps.
HMRC have confirmed that the VAT deferral scheme, which has been introduced in response to COVID-19 will not impact payable SME tax credits. The scheme defers the VAT payment due date to the end of the tax year, therefore, deferred VAT payments in this period are not overdue and HMRC has confirmed that R&D claim payments will not be offset. For RDEC payments, the legislation requires HMRC to offset the RDEC payment against other HMRC liabilities. This includes any PAYE/NIC or VAT payment which was overdue and HMRC does not have the power to provide a temporary relaxation of this rule.
If you have a query about accessing COVID-19 grants and support, please contact our team today at firstname.lastname@example.org.
HMRC has announced temporary changes to the time limit and rules for notifying an option to tax (OTT) land and buildings during the COVID-19 outbreak.
Under the normal time limits, there is a requirement to notify HMRC of a decision to opt to tax land and buildings within 30 days by either:
a) Printing and sending HMRC the OTT notification, signed by an authorised person within the business; or
b) Emailing a scanned copy of the signed notification.
Due to social distancing in response to the coronavirus outbreak, HMRC have noted that it may be challenging to follow the above rules. HMRC have therefore temporarily changed the rules to help businesses, and agents during this challenging time, which we have outlined below.
HMRC has temporarily extended the time limit to notify HMRC to 90 days from the date the decision to opt was made. This applies to decisions made between 15 February and 31 May 2020. All notifications can be sent to email@example.com.
The OTT notification can be submitted to HMRC with an electronic signature, but HMRC need evidence that the signature is from a person authorised to make the option on behalf of the business. Examples of supplementary evidence include emailing the notification:
In cases where an agent is notifying HMRC of a client’s decision to opt, the notification can be emailed with an electronic signature, however you also need to send HMRC proof that:
Examples include emailing the notification:
Consideration should be given to the points outlined above to ensure that any OTT notifications sent to HMRC are processed in a timely manner.
If you have any queries in relation to this, please do not hesitate to contact our VAT Director, Iain Masterton (firstname.lastname@example.org).
In his second video, David Shadwell, Accounts and Business Support Partner, looks at fraud risk for businesses – the conditions that increase the likelihood of fraud being committed and the practical steps to take to minimise your risk.
A transcript of the video can be found below. If you have a question about cyber crime contact our COVID team today at email@example.com.
Welcome, I’m Dave Shadwell and this second episode looks at how there is a heightened risk of fraud at the moment, the reasons for that. As ever, we’ll cover some simple things you can do to reduce the risk of fraud in your business.
Firstly, why is there a heightened risk of fraud at this time?
Well, you might have heard of the fraud triangle which suggests there are three conditions that significantly increase the likelihood of fraud being committed. Pressure, or motivation. Opportunity, and rationalisation, which is when the fraudster is able to rationalise the situation as being acceptable.
Back to the first, pressure or motivation. Clearly, the current ongoing lockdown restrictions are placing a significant amount more financial pressure on lots of people. This financial pressure also might not be on them directly, but perhaps a family member or someone close to them in their community.
In terms of opportunity, most businesses have experienced a significant amount of disruption to how they operate. In particular, having to deviate from their usual controls and processes. This creates opportunity for individuals to exploit.
Some of the specific circumstances around the lockdown also provide reasons for people to rationalise committing fraud. “I’ll pay it back when this is all over” “I need to do this for my family” “these are exceptional circumstances”, that sort of thing.
Let’s consider what practical steps you might be able to take to minimise your risk. How could you prevent fraud or misconduct from occurring in the first place, how will you detect it when it does occur and what might be an appropriate way to respond.
In terms of prevention, going through a simple fraud risk assessment process will help to focus on any controls or processes that might be new, radically different to normal, or possibly even now absent.
Now you know what your specific risk areas are, this might reveal certain areas of concern that you want to have a closer look at. There are a number of analytics tools you can use to help visualise the data from within your business. This is about identifying outliers and anomalies which warrant a closer look. Software such as Tableau or Power BI are some of the best available and you could also consider outsourcing this to a data analytics expert.
One of the most important aspects of managing the risk of fraud is setting the right “tone at the top” on the importance of ethics and integrity, reinforcing a culture where everyone feels an obligation to raise their hands and report improper conduct, with appropriate, well understood channels to do so.
Lastly, it’s never been more important to keep close to employees, keep them updated with how the business is navigating through these challenging times and show them compassion. This will help to keep employee engagement up and give you better visibility to those who may be at greatest risk.
I’m Dave Shadwell, Partner at Chiene + Tait, thanks for watching.
David Shadwell, Accounts and Business Support Partner, has recorded a series of videos looking at aspects that UK businesses should keep in mind as we navigate out of the COVID-19 lockdown. The first video looks at cyber crime and how businesses can take simple steps to protect themselves.
A transcript of the video can be found below. If you have a question about cyber crime contact our COVID team today at firstname.lastname@example.org.
This episode looks at how a growing number of cyber criminals are exploiting the COVID-19 pandemic for their own gain.
A growth in cyber crime is nothing new but some data suggests that there has been an up to 6 fold increase in cyber threats over the past 4 to 6 weeks.
They prey on the fact that everyone is anxious, fearful and lots are working from home.
There are examples of scams that include emails containing malware, which appears to have come from a genuine source, others which claim to offer thermometers and face masks to fight the pandemic.
Cyber criminals are also scanning for vulnerabilities in software and remote working tools as more people work from home.
Everyone is looking for information about the outbreak, and when and how the lockdown restrictions might be lifted. Criminals are sending phishing emails and sms messages using the virus to trick people into revealing sensitive information, or downloading malicious software.
This is only going to get worse, and comes at a time when no business can afford an incident. The good news is there are some simple things you can do to reduce your risk of falling prey to cyber crime. This is about covering the basics and making yourself a harder target. Criminals often use publicly available information about you to make their phishing messages more convincing. This is often obtained from either your website or social media accounts, so check your privacy settings. Also, think about what you post and who can see it.
Many businesses have significantly more people working from home than usual, and good password management is critical. Make sure everyone is using strong passwords. There are lots of great online password management tools like Lastpass or Keypass, which means you don’t have to remember long, complex passwords. Using good quality, cloud-based software rather than a desktop version is another way of reducing your risk. Similarly, make sure you’ve got up to date anti virus software installed, and all the updates for your other software have also been installed. If you do have sensitive data on your device, make sure it’s protected through proper encryption.
Lastly, never action a payment request received solely over email and backup your data.
Chiene + Tait
In his second blog on lessons learnt from New Zealand and moving forward from the COVID-19 lockdown, our newest Partner David Shadwell looks at what lessons UK businesses can learn from NZ and how to prepare in small steps to return to normal.
Under the current New Zealand level of lockdown, there are a variety of measures in please to keep workers safe, limit interactions with customers, and help prevent a second spike in cases of COVID-19. Businesses must self-assess their ability to meet these restrictions and operate safely, just as they would normally to meet their duties under Health and Safety legislation. However, the following guidance has been issued in NZ and UK businesses would be mindful to review:
Retail stores and hospitality businesses such as bars and cafes may operate, but customers cannot enter the premises. Delivery, or drive-through or contactless pick up by customers is allowed.
Construction businesses can start work again but strict hygiene measures must be put in place.
As we can see from these NZ measures, the focus is on maintaining safe distancing, whilst still trying to carry out day to day tasks. Think about your business, are there additional measures you can implement now in order to help your staff to prepare for a return to work – extra space between colleagues, any additional home working support, such as using a tax relief on home working, flagged up Chiene + Tait’s Hazel Gough.
As of 4 May, New Zealand had gone 24 hours with no new cases of coronavirus. This seems like a remarkable achievement, and something that could signal a rapid return to pre-COVID-19 ‘normal’ life.
However, Dr Ashley Bloomfield, Chief Executive of the New Zealand Ministry of Health, said NZ’s current lockdown rules need to remain in place for a time, despite the zero cases milestone. Infectious disease physician Dr Ayesha Verrall said the milestone is something to be “optimistic” about, but also a sign there’s still work to be done.
The indicator we should be looking at the most is locally acquired cases – contacts of a known case, and very rarely community transmission, Verrall said. These are all new cases which are not imported from overseas, and therefore are transmitted among the community. Even if we have zero locally acquired cases, the likelihood is we will continue to see new cases imported from overseas, she added.
Psychologist Dougal Sutherland commented that having zero cases will be a test for New Zealanders in “keeping the faith” and keeping to the rules. There is a “danger of complacency” that comes with not having any new cases, as people may try and escape the boredom of being at home, thinking they are OK to do so, he said. He urged people to remember that we were not out of the woods yet. It seems inevitable that restrictions in various forms will be with us for some time and success at phase 1 does not guarantee success further down the track. Indeed, very similar messages have been shared by First Minister Nicola Sturgeon – if there is any risk of a second wave of cases that might overwhelm the NHS, the risk is too great and all citizens should take their own, and the safety others very seriously until infection and death rate figures allow us all to securely move forward.
The danger of complacency is real. New Zealand recently enjoyed its first weekend at its current alert level, but unfortunately good weather and confusion over rules drew droves of people out of their bubbles. In some areas, the hills and beaches got mobbed and local police had to move people along. There was also wide-spread confusion that while responsible exercising was fine, it’s not ok to just hang out. The police were alerted to 685 parties on Friday night in Christchurch alone. This has led to enforcement actions taken against over 500 people.
With the milder temperatures of springtime in the UK, this means that winter is long forgotten and summer is around the corner. This is unlikely to mix easily with a lifting of lockdown restrictions, whenever it happens. Plus, with many people craving fresh air and warm sunshine in our normally cool Scottish landscape, the combination could provide a multitude of challenges for authorities. South Korea has taken the precaution of publishing a 68-page guide to the dos and don’ts of “everyday life quarantine” in an attempt to reduce the risk of confusion. I wonder if the Scottish Government will consider doing the same.
The coronavirus pandemic has caused an astronomical acceleration in change to how we work. When people want to change, they can, and we’ve all been forced into a massive period of unprecedented change. This includes the explosion of video conferencing, changes to schooling, the shift to online shopping and contactless delivery. Similarly, millions have discovered a productivity boost gained from fewer social interruptions. Going forward, there may be some real benefits from employing staff who can make those kinds of quantum leaps in how a business works.
The impact of technology was already being felt in changing business models and some jobs being replaced or transformed by automation, although the pace of technological change was largely static or slowing. Technological change has a growing impact on disruption to the future of work, the workforce, labour markets, productivity and wellbeing. COVID-19 has turbocharged this change. Some key components of technical change are recent improvements in the power and quality of artificial intelligence (AI), the spread of robotics, and the emergence of digital platforms as ways to seek and organise work. This may no longer be the case. There have been several recent breakthroughs in AI. For example:
The fear is that technology is replacing cognition. This will leave people with no comparative advantages and no work to do. Perhaps, though, the rise of technology makes skills like communication, leadership, and cultural intelligence more important than ever. Businesses that recognise and place more value on staff with an active growth mindset, curiosity and a willingness to learn, may be better placed to adapt to this new pace of technical change. Charles Darwin noted that survival is not based on being the strongest or even the most intelligent, but the most adaptable. The UK’s future prosperity will depend on how well it is able to adopt technology. Rather than treat technology as a threat, we need to remove barriers to businesses adopting technology, and assist our people to gain the most from innovation and adapt effectively to change. The businesses that will do well will be those that are adaptable and resilient in the face of this significant change.
In a televised address to the nation on March 23, Prime Minister Boris Johnson announced unprecedented limits on where and how people can meet and gather during the continuing coronavirus. The lockdown officially started the next day. He is due to announce on Sunday May 10th how some of the measures may be rolled back, possibly from Monday 11th May.
This trend of changes being announced with minimal notice might continue. New Zealand Prime Minister, Jacinda Ardern, said New Zealand will likely have two days’ notice before entering a different COVID-19 alert level from the current position.
So, as we wait for information on when the UK’s next phase might kick in, and what its staggered approach might look like, businesses should prepare as best they can now.
Businesses are likely to be required to encourage home-working and stagger shift times to prevent buses and trains being overwhelmed. Staggered shift times should also improve social distancing inside offices, where employers must keep staff two metres apart. It may be necessary to use floor tape to set out appropriate spacing. Protective screens and equipment may be required where keeping the two-metre gap is not possible. Additionally, providing more parking spaces may be necessary to avoid employees sharing cars.
Just as New Zealand businesses must self-assess their ability to meet the restrictions and operate safely, employers in the UK should expect to implement a coronavirus risk assessment before allowing staff back in the office. Even with Government-issued guidelines, every business and every employer will need to make some judgement calls, and these can be taken now, so you are as prepared as possible when science suggests the pendulum can start to swing back to ‘normal’.
In his first blog, David Shadwell (who recently moved from New Zealand to join Chiene + Tait as our newest Partner) considers how the UK can learn from the NZ approach to removing the lockdown and how we can take some confidence that there is a light at the end of the current COVID-19 tunnel.
I’ve just recently returned to the UK, taking up a new role in Edinburgh after living and working as an adviser in New Zealand. The nation, which was my home for nearly a decade, is now providing useful insights into how both individuals and businesses here in the UK might eventually emerge from Covid-19 restrictions.
New Zealand imposed stringent lockdown measures from the end of March, a strategy which seems to have worked as they’ve experienced under 1500 confirmed cases and just 20 deaths from Covid-19. In a similar tone to the UK Government, New Zealand Prime Minister Jacinda Ardern has led a cautious programme with a phased lifting of restrictions to reduce the risk of a further outbreak of the pandemic.
New Zealand moved to what is called Alert Level 3 at the end of April, where it will remain until this week when Ms Arden and her cabinet will review its impact, and make further decisions on whether to introduce a further easing of restrictions.
Alert Level 3 requires people to remain within their homes when theyare not at work or school, except when food shopping or exercising. Existing households in self-isolation can, however, be expanded to include other select family members outside of the home, with social distancing measures remaining in place. Isolated and more vulnerable individuals can also get access to carers and other forms of support.
Alert Level 3 allows New Zealanders who were forced to lockdown while away from their families, to now return to live with them but people must remain within their local area, except while travelling to their place of work or school, assuming they’re unable to work or learn from home. Meanwhile recreation restrictions have been eased, but there is still a strong emphasis on local, low-risk activities and exercising either by yourself or with people within your current household.
Unlike the UK, New Zealand schools, nurseries and education centres are now open for children up to and including year 10, with appropriate public health measures put in place, where distance learning is not possible. Young people in the final two years of high school are, however, continuing to learn at home. Under Alert Level 3, New Zealand schools have significantly fewer students on their grounds, with those in attendance required to maintain physical distancing as much as possible. PPE is not mandatory within schools, but any pupil or teacher with health concerns has been ordered to stay at home. Tertiary education continues to be provided online.
Despite the incremental nature of these changes, early signs show a modest return towards normality for New Zealanders. Analysis on 28 April, when Alert Level 3 began, showed traffic volumes increasing by an estimated five percent in Auckland, Tauranga and Hamilton, and by nearly 15% in Wellington compared with the previous week. This suggests more people are returning to their place to work albeit at different speeds across sectors and regions. Encouragingly, there are now more job listings online and more people viewing them. Google mobility data also showed New Zealanders got through five times as many takeaways in the first week of restrictions being eased with McDonalds doubling their average daily burger sales.
While the UK has a long way to go in its own post-pandemic journey, we can take some confidence from what’s happening in New Zealand and the potential to experience a modest yet welcome economic uplift as lockdown restrictions are slowly but steadily lifted.
Self employed individuals are not eligible for the Coronavirus Job Retention Scheme, where the Government committed to pay up to £2,500 each month in wages of employed workers who are furloughed during the outbreak.
The Self Employment Income Support Scheme (SEISS) is intended to bring parity for self employed workers. SEISS is the Government scheme to support individuals who are self employed, or members of trading partnerships whose businesses have been adversely affected by COVID-19.
Eligible individuals can claim a taxable grant worth 80% of their trading profits, up to a maximum of £2,500 a month, or £7,500 in total (equivalent to three month’s profit). It will be available for 3 months, but may be extended. To find out more about the scheme, who is eligible, how to apply and recommended next steps download our SEISS Briefing.
2019/20 benefit checklist here:2020 P11D Checklist
It is with great sadness that we announce the sudden passing of our colleague Niall Blair, who was a valued and respected member of our Entrepreneurial Tax Team. Niall’s humour, team spirit and natural leadership will be sorely missed by all who worked with him at Chiene + Tait. We have lost a great friend and our thoughts are with his family at this difficult time.