Tax Diary September/October 2020

Tax Diary September/October 2020

1 September 2020 – The Due date for the Corporation Tax due for the year ended 30 November 2019.

19 September 2020 – The PAYE and NIC the deductions due for month ended 5 September 2020. (If you pay your tax electronically the due date is 22 September 2020)

19 September 2020 – Filing the deadline for the CIS300 the monthly return for the month ended 5 September 2020.

19 September 2020 – The CIS tax deducted for the month ended 5 September 2020 is payable by today.

1 October 2020 – Due date for the Corporation Tax due for the year ended 31 December 2019.

19 October 2020 – The PAYE and the NIC deductions due for month ended 5 October 2020. (If you pay your tax electronically the due date is 22 October 2020.)

19 October 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2020.

19 October 2020 – The CIS tax deducted for the month ended 5 October 2020 is payable by today.

31 October 2020 – Latest date you can file a paper version of your 2020 self-assessment tax return.

Tax Diary September/October 2020

Source: HM Revenue & Customs Thu, 27 Aug 2020 05:00:00 +0100

Did You Benefit From The Eat Out Campaign?

The Eat Out Campaign to Help Out scheme to encourage the struggling restaurant sector was announced as part of the Chancellor’s Summer Economic announcements. The scheme was designed to help restaurants recover from the effects of the lockdown and has been a great success.

The scheme was launched on 3 August 2020 and was available every Monday, Tuesday and Wednesday. The last day you can benefit from the scheme is 31 August 2020. In the first two weeks of the scheme over 35 million meals were enjoyed across the country with over 85,000 restaurants taking part.

Meals that were eaten in at any participating restaurant on the designated days were discounted by 50% up to a maximum discount of £10 per head including children. The discount also applied to non-alcoholic drinks but could not be claimed on alcoholic drinks or service charges.

One restaurateur commented that:

‘The response to Eat Out Campaign to Help Out has been phenomenal. Even though venues are operating at reduced capacity and with smaller teams following more thorough safety measures, we’re still managing to serve a similar number of customers on Mondays – Wednesdays that we were this time last year. That makes a huge difference to independents like us.’

The scheme aimed to help protect the jobs of the hospitality industry’s 1.8 million employees by encouraging people to safely return to their local restaurants, cafes and pubs where social-distancing rules allow. Around 80% of hospitality firms stopped trading in April, with 1.4 million workers furloughed, the highest of any sector.

It will be interesting to see if any further measures are announced to help this sector once the scheme closes.

Source: HM Treasury Wed, 26 Aug 2020 05:00:00 +0100

Teenagers To Get Access To Child Trust Funds

Children born after 31 August 2002 and before 3 January 2011 were entitled to a Child Trust Funds (CTF) account provided they met the necessary conditions. These funds were long-term saving accounts for newly born children. The first of these children will begin turning 18 from 1 September 2020.

HMRC has confirmed that millions of teenagers are set to benefit as their accounts mature. Approximately 6.3 million Child Trust Funds (CTF) accounts have been set up since the scheme was launched in 2002, roughly 4.5 million by parents or guardians and a further 1.8 million set up by HMRC where parents or guardians did not open an account.

From September, an estimated 55,000 accounts will mature each month and HMRC has created a simple online tool to help young people find out where their account is held.

Economic Secretary to the Treasury, John Glen, said:

We want to make sure all young people can access the money which has been set aside for them, to invest in their future and continue a savings habit, as they turn 18.’

If you’re unsure if you have an account or where it may be, it’s easy to track down your provider online.

The actual CTF accounts are not held by HMRC, but by a number of CTF providers who are financial services firms. Anyone can pay into the account, with an annual limit of £9,000, and there’s no tax to pay on the CTF savings interest or profit.

Source: HM Treasury Wed, 26 Aug 2020 05:00:00 +0100

Agent Update August 2020

HMRC has released the latest bi-monthly issue of the ‘Agent Update’ publication which includes summaries of recent changes and agent update that have been announced. The document, that is aimed at taxation and accountancy practitioners, includes links to more detailed information on each of the topics covered.

The topics covered in the latest edition include the following:

  • COVID-19. A reminder that the GOV.UK portal includes details of all the various financial support and other measures available to employers, businesses and employees.
  • VAT payment deferrals period. The option to defer your VAT payments ended on 30 June 2020. The Coronavirus VAT payment holiday gave businesses the chance to defer the payment of any VAT liabilities between 20 March 2020 and 30 June 2020. VAT payments now need to be made as normal.
  • Confirmation of Payee process. Some UK banks have introduced Confirmation of Payee (COP) as a new way of giving individuals or businesses greater assurance that they are sending payments to the intended recipient. When you request a repayment from HMRC you must ensure that the details you provide match the details of the recipients account.
  • Top Slicing Relief (TSR) on life insurance policy gains. New legislation has been introduced that changes how reduced personal allowances interact with the calculation for top slicing relief. It will provide additional relief for taxpayers whose entitlement to the personal allowance has reduced because a gain is included as part of their income. The new legislation to TSR cases will apply from tax year 2018-2019.
  • Disguised Remuneration Loan Charge. Taxpayers that have outstanding disguised remuneration loans that are subject to the loan charge need to file their 2018-19 Self-Assessment tax return by 30 September 2020, including a report of any loan balances subject to the loan charge, and put in place any arrangements they need to pay the charge due on that date. Taxpayers can now elect to spread the loan balance over 3 tax years.
  • Links to new Revenue & Customs Briefs.
Source: HM Revenue & Customs Wed, 26 Aug 2020 05:00:00 +0100

Settlement Legislation

The settlement legislation rules are intended to prevent an individual from gaining a tax advantage by entering into arrangements which divert his or her income to another person who is liable at a lower rate of tax or is not liable to Income Tax.

Where a settlor has retained an interest in a property, the income arising is treated as the settlor’s income for all tax purposes. A settlor can be said to have retained an interest if the property or income may be applied for the benefit of the settlor, a spouse or civil partner.

In general, the anti-avoidance settlement legislation can apply where an individual enters into an arrangement to divert income to someone else and in the process, tax is saved.

These arrangements must be:

  • bounteous, or
  • not commercial, or
  • not at arm’s length, or
  • in the case of a gift between spouses or civil partners, wholly or substantially a right to income.

However, there are a number of everyday scenarios where the settlements legislation does not apply. In fact, after much case law in this area, HMRC has confirmed that if there is no ‘bounty‘ or if the gift to a spouse or civil partner is an outright gift which is not wholly, or substantially, a right to income, then the legislation will not apply.

The settlements legislation is tax law that aims to prevent high earning taxpayers from making use of the tax allowance of a lower earning spouse, partner, family member or friend. … HMRC lost the case, which provided contractors with certainty about the settlements legislation’s exemption for spouses and civil partners.

Source: HM Revenue & Customs Wed, 26 Aug 2020 05:00:00 +0100

Support Clients With Grant Aid

At the end of July, the government announced £20m of new grant funding was to be allocated to Growth Hubs, specifically to help smaller businesses that have been negatively impacted by the COVID-19 pandemic to access much needed professional support.

These grants will provide businesses between £1,000 and £5,000 to help them access or adapt new technology and other equipment as well as to pay for professional, legal, financial or other advice to help them get back on track. The grants could be used, for example, to cover certain support services provided by accountants.

The exact amount of the grants will be decided at a local level but are expected to typically be up to £3,000. Under certain circumstances the maximum grant of £5,000 may be awarded.

The support will be delivered from the England European Regional Development Fund. The funding has been allocated to Growth Hubs within each Local Enterprise Partnership and the scheme is expected to open shortly. It should be noted that this funding is extremely limited and available on a first come, first served basis. There will be no obligation for businesses to contribute financially as the grant will be fully funded by the government.

To establish a viable grant programme, the government has set a minimum of £250,000 for all Local Enterprise Partnership areas. The allocation of resources will be reviewed as the grant funding is delivered. The funding is being provided to address immediate needs and all grants must be awarded by 28 February 2021 and all activity fully completed by 31 March 2021.

Source: HM Government Wed, 26 Aug 2020 05:00:00 +0100

Problems Booking A Driving Test?

The driving test online booking service reopened on Friday 21 August and then crashed due to the unexpected demand for places. By 8pm that evening the site had been visited seven million times.

In a recent announcement the Drivers and Vehicles Standards Agency (DVSA) said:

Coronavirus has severely impacted our business as usual operations, including by stopping driving tests in March. Since then DVSA have only been dealing with applications for emergency driving tests for critical workers.

Following unprecedented demand for the driving tests booking system with almost 7 million attempts to book a test when it opened, we need to carry out urgent maintenance so people can book tests.
We have to close the booking service.

Accordingly, until 8am on Wednesday 26 August 2020, the booking site will remain off-line. This essential maintenance should enable DVSA to cope with the increased demand from the public.

The services that will be unavailable during this period are:

  • booking your driving tests
  • changing your driving tests appointment
  • checking your driving test appointment details
  • cancelling your driving test

It is also worth underlining that the DVSA is only taking bookings for a six week period. On which basis it is unlikely that demand will reduce. Let’s hope that DVSA improvements in their online systems are effective.

Source: Other Wed, 26 Aug 2020 05:00:00 +0100

Property Not Let At Commercial Rates

There are special rules that apply when a property is let at less than a commercial rate or is not let on commercial rates or terms. These rules also apply if a property is occupied rent free or at less than a commercial rates, for example, a property is occupied by a family member at a reduced or nil rent.

In these circumstances, HMRC can take the view that unless the landlord charges a full market rent for a property and imposes normal market lease conditions, it is unlikely that the expenses of the property are incurred ‘wholly and exclusively’ for business purposes.  Problems may also arise when considering the deduction of expenses during periods when the property is lived in by ‘house sitters’ who do not make any payment whilst staying at the property.

HMRC generally accepts that if a property is let at below the market rate (as opposed to providing it rent-free), the landlord can deduct the expenses of that property up to the rent they receive from letting the property. This means that the affected property produces neither a profit nor a loss. Any excess expenses cannot be carried forward to be used in a later year.

If the landlord is actively seeking a tenant and a relative house sits while it is empty, relief will not be restricted as long as the property remains genuinely available for letting. Relief for capital expenditure on uncommercial lettings may also be restricted.

Source: HM Revenue & Customs Wed, 26 Aug 2020 05:00:00 +0100

Eviction Ban Extended By 4 Weeks

The government has announced a further four-week extension to the eviction ban for tenants affected by the Coronavirus pandemic. This means that landlords in England and Wales will be banned from eviction ban tenants until at least 20 September 2020. This takes the total ban to 6 months.

The government has also announced plans to give tenants greater protection from eviction over the winter by requiring landlords to provide tenants with a new 6 months’ notice period (extended from 3 months’) in all bar those cases raising other serious issues such as those involving anti-social behaviour and domestic abuse perpetrators, until at least 31 March 2021. The Scottish government has also introduced a ban on evictions until March 2021 and there is currently an extended 12-week notice period in Northern Ireland.

The government has said it will keep these measures under review with decisions guided by the latest public health advice.

When courts do resume eviction hearings they will carefully prioritise the most egregious cases, ensuring landlords are able to progress the most serious cases, such as those involving anti-social behaviour and other crimes, as well as cases where landlords have not received rent for over a year and would otherwise face unmanageable debts.

According to independent research, 87% of tenants have continued to pay full rent since the start of the pandemic, with a further 8% agreeing reduced fees with their landlords. However, landlords and tenants continue to face situations where tenants are unable to pay their bills resulting in lost rental income.

Source: HM Revenue & Customs Wed, 26 Aug 2020 05:00:00 +0100

COVID Measures – Tougher Fines Announced

The Home Office has announced tougher fines COVID measures targeting the most serious breaches of social distancing restrictions.

In most cases they will be effective from Friday 28 August 2020.

In their announcement issued 23 August, the Home Office said:

Those facilitating or organising illegal raves, unlicensed music events, or any other unlawful gathering of 30 people or more may face a £10,000 fine – placing a new deterrent on the breaches that put the public most at risk.

Fines of £100 can continue to be issued to those who participate in illegal gatherings and those who have already received a fine will see the amount of doubled on each offence, up to a maximum of £3,200.

But the Covid measures extend beyond large gatherings. There are also to be increases in fines for not wearing face masks when mandated to do so.

Also, from 28 August, fines for not wearing face coverings where it is mandated will also double for repeat offences, starting at £100 and doubling to a maximum of £3,200 for each repeat offence, mirroring fixed penalty notices for breaches for other restrictions.

It is mandatory to wear a face covering on public transport, and in many enclosed public spaces including shops, supermarkets and high street outlets unless you are exempt, including on the grounds of age, health or disability.

Source: Other Tue, 25 Aug 2020 05:00:00 +0100
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