August 2020 News Update – featuring additional news developments from our newsletter series
The second round of SEISS grants is open for applications from Self-Employed workers and can be accessed between 17th August until 19th October. Furthermore eligibility has been extended to new parents. Over 860,000 ‘Bounce Back Loans’ have been issued since the Coronavirus Business Interruption Loan Scheme opened in May, with new applicants still being welcomed by banks until at least November. The government’s Eat Out to Help Out scheme comes to a close on 31st August, but VAT will remain temporarily reduced to 5% until 12 January 2021, for certain supplies for the hospitality industry. The enormously popular Fix your Bike Voucher Scheme website offering bicycle repair vouchers crashed at its launch last month, due to overwhelming demand. Many keen cyclists are eagerly awaiting the release of second batch of vouchers.
Second Round of Seiss Grants is Open Until 19th October 2020
The second round of SEISS grants is now open for applications from Self-Employed workers between 17th August and 19th October. Workers who are eligible are asked to confirm that their work has been adversely affected by coronavirus, on or after 14 July 2020. Applications can be made here. Individuals can claim a taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months worth of profits, and capped at £6570 in total. The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus. An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase. Click here to read more.
SEISS Eligibility Extended to New Parents
Parents who took parental leave in 2018/19 weren’t previously eligible for SEISS, however special dispensation has been announced for those parents caring for a new child within this timeframe. If this applies to you, make your application here. If you took parental leave away from your business and didn’t need to submit a self-assessment tax return because your earnings fell below £1,000 – previously you would not have passed the eligibility criteria. You might have also earned more than £1,000 from your business, but still failed to be eligible if you had income from other sources (such as a part-time job) which meant your self-employed income was below 50% of your total income. This means parents – including mothers, fathers and those who have adopted – who took time out of trading to care for their children within the first 12 months of birth (or adoption placement) will now be able to use their 2017/18, or both their 2016/17 and 2017/18, self-assessment returns as the basis for eligibility.
Over 860,000 ‘Bounce Back Loans’ Issued
Coronavirus Business Interruption Loans are interest and payment-free loans of up to the maximum allowed amount of £50,000. The Government will pay the costs of the loan for the first twelve months to help businesses focus on growth and helping them weather the economic storm ahead. To find out more click here. More than 860,000 ‘bounce back loans’ have been issued since the scheme launched in May. Small businesses struggling due to the coronavirus can apply for a 100% state-backed loan worth up to £50,000, with no interest charged or repayments needed in the first 12 months. The Chancellor, Rishi Sunak, launched the scheme to help counter a distinctive problem encountered by smaller businesses unable to utilise the Coronavirus Business Interruption Loan Scheme (CBILS). The scheme is reported to remain open initially for six months, until at least November, when the scheme is due to be revised. To find out eligibility bank by bank click here.
Prestige Business Management Referral Programme
Our simple referral programme has been designed to reward loyal customers who, thanks to the power of word-of-mouth, introduce new clients to Prestige Business Management.
All you need to do is tell everyone about Prestige Business Management (reminding them to tell them your name). Once they’ve signed-up to one of our packages, depending on what type of business they are, you could get up to £100. Even more if you refer more than one individual.
If you’d like to read more about our scheme please please get in touch.
What You Missed From Our Blog – Summary
Covid Triggers Largest Ever Recession
The UKs economy has officially entered the “largest recession on record”, according to official figures charting the impact of the coronavirus crisis on the economy. The Office for National Statistics (ONS) reported that the enforced hibernation of activity through the COVID-19 lockdown meant gross domestic product (GDP) slumped by 20.4% in the second quarter of the year following a dip of 2.2% during the first three months of 2020 triggering a Covid financial crisis.
The government warns there will be many more casualties over the remainder of 2020 and well into 2021. Chancellor Rishi Sunak stated on 12th August 2020, “I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here.”
Official jobs figures released on Tuesday 11th August showed the number of people in work fell by 220,000 in April to June. In response to confirmation of the largest ever recession, the Chancellor said the government should not pretend that “absolutely everybody can and will be able to go back to the job they had,” and said there would be support for creating jobs in new areas. He has also said there will be a “fiscal event” in the autumn. Responding to reports that the planned Budget could be abandoned in fear of a second wave of the pandemic triggering further economic uncertainty. He added that there would not be a return to austerity – but acknowledged that public spending had taken a huge hit and there would be difficult choices ahead.
Tax Enquiry Protection Insurance
Now is the best time to make sure you are covered with Prestige Business Managements Tax Enquiry Protection Insurance. We heard Chancellor Rishi Sunak in his 2020 Budget that “the government is investing in additional compliance officers and new technology… enabling HMRC to further reduce the tax gap.” Following the outbreak of COVID-19 in the UK in March 2020. Plus the subsequent postponement of Making Tax Digital Phase Two, HMRC will expect full compliance from businesses, to recruit tax revenue, which was decimated by activity concentrated in April 2020, at the height of lockdown, which also triggered the largest ever recession in the UK.
Usually an HMRC investigation or tax enquiry is triggered when figures submitted on a tax return appear to be wrong in some way. However you could just as likely find your business the subject of an HMRC investigation purely at random. When HMRC simply picks a selection of businesses completely at random to perform a tax enquiry on. And HMRC investigation is a worst nightmare for any small business or sole trader. It will eat up your valuable time, cause enormous stress and at worst, it could land you with an unwanted tax bill. Whatever happens, an HMRC investigation could cost you money even if you’ve done nothing wrong and anyone can be selected: a business, a director or an individual taxpayer.
At Prestige Business Management we can provide you with a tax enquiry protection service to protect you from the costs that may arise as a result of a VAT or tax enquiry from HMRC. The tax enquiry protection that we can provide is an all – embracing policy that provides you with the ultimate protection. The service covers up to the equivalent of £100,000 towards our professional fees resulting from an HMRC enquiry.
August’s Top Tips from Prestige Business Management
The number of tax and VAT investigations is increasing every single year. Here is how you can get prepared for a possible tax enquiry.
- Use Making Tax Digital compliant software to keep your accounting records up to date.
- Check your accounting records are up-to-date and fill in any missing information at your earliest opportunity.
- Highlight any potential errors in your tax return to HMRC as early as possible. Self-reporting possible errors early on, is looked upon favourably by HMRC and could help you avoid a costly tax enquiry altogether.
- Make use of government grant schemes for SMEs to invest in new technologies and access professional advice and services such as HR, legal, financial, IT, digital and accounting expertise.
- Take out Prestige Business Management’s Tax Enquiry Protection Insurance for all-embracing ultimate protection.
To find out more visit our website – https://www.prestigebm.co.uk/
To Read our Monthly Financial and Tax Newswire Round-up – Click here.