Month: August 2020

Banks Stand Up To Be Counted

Posted on by Rana Zubair

The banks have released the fifth publication ranking the service quality league table of personal and business current account providers.

Personal and small business customers can clearly see how the quality of services compares across different dimensions in the survey, including service quality, online and mobile offerings, overdrafts, in-branch experience, and, for small business customers, the quality of their relationship or account management services. The CMA requires banks and buildings societies to display the survey results prominently online and in-branch so that customers can see whether they can get a better deal elsewhere.

The top three places for overall service quality providing personal accounts are:

  1. Monzo
  2. Starling Bank, and
  3. First Direct

Customers with personal current accounts were asked how likely they would be to recommend their provider. Their provider’s online and mobile banking services, services in branches and overdraft services to friends and family. The results show the proportion of customers, among those who took part in the survey. Each provider who said they were extremely likely or very likely to recommend each service.

It is interesting that these smaller banks are ahead of the big four banks and other larger institutions in the UK.

Source: Other Wed, 19 Aug 2020 05:00:00 +0100

Connected Persons CGT And Other Taxes

Posted on by Rana Zubair

The definition of a connected persons for tax purposes can be complex and varies depending on the circumstances.

Section 839 of the Income and the Corporation Taxes Act (ICTA) 1988 sets out a statutory definition of “connected persons” for tax purposes.

The general situation in Section 839(2) of ICTA 1988 states:

Section 839(8) of ICTA 1988 states that, in this context, “‘relative’ means brother, sister, ancestor or lineal descendant.” Married partners are connected with each other.

The term ‘relative’ does not cover all family relationships. In particular it does not include nephews, nieces, uncles and aunts.

The definition of these people extends for Inheritance Tax to include the individual’s uncle/aunt, nephew/nieces, and their spouse, spouse’s uncle/aunt, and spouse’s nephew and niece.

There are further categories of connected the persons in respect of the trustees, acquisitions and disposals of partnership assets and in relation to companies.

Source: HM Revenue & Customs Wed, 19 Aug 2020 05:00:00 +0100

Companies House Strike-Off Resumes – Avoid Dissolution

Posted on by Rana Zubair

Companies House has confirmed that the temporary measure to suspend compulsory strike-off action will be lifted from 10 October 2020. The temporary measure to pause compulsory strike-offs started in April 2020 in response to the coronavirus pandemic.

When a company is struck off, the company’s legal existence is removed from the Companies House register. The strike-off can be voluntary or compulsory.

From 10 October 2020, Companies Houses will resume the compulsory process to remove a company from the register if there’s reasonable cause to believe it’s no longer carrying on business or in operation.

This includes:

  • company documents are outstanding, and Companies House have had no response to their letters
  • letters sent by Companies Houses are returned undelivered
  • the company has no directors

Companies that do not file their annual accounts or confirmation statement will normally receive two letters from Companies House. A notice is then published in the Gazette to tell the public that the registrar intends to strike-off the company.

From 10th October onwards, when compulsory strike-off action resumes, a company will face dissolution if there are no objections and the two-month period from the publication of the Gazette notice expires. Subsequently, authorities will strike off the company shortly thereafter.

If a company is in default and wants to remain on the register then action should be taken before 10 October 2020 to remain registered.

 

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Implementation Of The Loan Charge

Posted on by Rana Zubair

HMRC has published further guidance on the implementation of the loan charge and has made clear there will be no special settlement terms.

This follows an independent review earlier this year into whether the loan charges was an appropriate way of dealing with loans schemes (also known as disguised remuneration tax avoidance schemes) that have been used by some employers and individuals in order to try and avoid paying Income Tax and National Insurance Contributions (NICs).

The government agreed a series of changes to the loan charges following the review. The amendments went before Parliament in July 2020 and became law following Royal Assent. One of the main changes following the review was confirmation that the loan charge would not apply to users of disguised remuneration avoidance schemes between 6 April 1999 and 5 April 2016 who settled the tax due with HMRC on or after 16 March 2016 and before 11 March 2020.

Most people who have used disguised remuneration schemes will fall into one of 5 main groups, depending on their circumstances.

This will determine what they need to do next, although taxpayers with more complex affairs may fall into several different categories. These groups are:

  1. Taxpayers who have settled with HMRC and are not due a refund
  2. Taxpayers still settling with HMRC
  3. Taxpayers who have not settled and will pay the loan charge
  4. Taxpayers who have settled and are due a refund or waiver following the independent review
  5. Taxpayers who no longer have to pay some, or all, of the loan charge but have not settled all of their use of DR schemes

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.

Source: HM Revenue & Customs Wed, 19 Aug 2020 05:00:00 +0100

Applications Open For Second Round Of Self-Employed Scheme

Posted on by Rana Zubair

The second round of the Self-employment Income Support Scheme (SEISS) opened for applications open on Monday 17th August. The second and final grant covers the quarter to 31 August 2020. The second grant will provide up to £6,570 for the quarter (£2,190 per month) paid in a single instalment. These figures are based on 70% of eligible earnings (previous quarter 80%). Claims for the first grant have now been closed.

The following are some of the most important eligibility criteria for the scheme:

  • The applicant must have been adversely affected by coronavirus on or after 14 July 2020.
  • Applicants must be self-employed or a member of a trading partnership, voluntary work, or duties as an armed forces reservist.
  • Have filed a tax return for 2018-19.
  • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020-21,
  • Have trading profits of less than £50,000 and more than half of total income from self-employment.
  • Individuals can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.

It is possible for a qualifying self-employed person to qualify and claim for the second grant even if they had not claimed / qualified for the first grant.

If you are eligible, you should have been contacted by HMRC via letter, text or email and given a date on which to make your claim. Those who are eligible to use the scheme will have been given a randomly allocated date when they can apply for their grant. Whilst you cannot apply before the allocated day, there is no issue submitting a claim after that day. The applications open process will close on 19 October 2020. Claims are expected to be paid within six working days of submission of a claim.

Over 2.7 million benefited from the first stage of the SEISS – with the government handing out £7.8 billion of grants to help them through the crisis.

More than 3 million people are thought to be eligible for the second grant although some self-employed workers have fallen through the cracks such as the newly self-employed and some freelance workers who have been unable to claim. There are concerns for many self-employed workers when the scheme comes to an end, especially if we see a second wave of the pandemic.

Source: HM Revenue & Customs Wed, 19 Aug 2020 05:00:00 +0100

Myths And Student Loans

Posted on by Rana Zubair

Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying. The Student Loans Company (SLC) is a non-profit making government-owned organisation that administers loans and grants to students in universities and colleges in the UK.

As many students have started securing a university or college place, the SLC has published a press release aimed at helping dispel some common myths on student finance and Clearing 2020. Clearing is the process by which universities and colleges fill any remaining places they still have on their courses by matching students looking for a university place with unfilled places. This represents the last opportunity to apply for a place at university before the start of the academic year.

The press release ‘busts’ the following myths:

  • Myth: If I get a place through Clearing it’s too late to apply for student finance.
  • Myth: If I’ve already applied for student finance and my course changes through Clearing, I don’t have to do anything.
  • Myth: I need to send my Passport and a signed terms and conditions to receive my student finance.
  • Myth: It takes ages to apply for student finance because my parents or partner need to send paper forms and evidence.
  • Myth: There’s no information available on student finance and Clearing.

For more information on any of these issues search for the press release on the GOV.UK website.

Source: HM Revenue & Customs Wed, 19 Aug 2020 05:00:00 +0100

Green Homes Grant Scheme

Posted on by Rana Zubair

One of the measures announced by the Chancellor, Rishi Sunak in his Summer Economic update on 8 July 2020 was the launch of the new £2 billion Green Homes Grant scheme.

From September 2020, home owners and landlords in England will be able to apply for a grant to make their home more energy efficient. The Green Homes Grant scheme will cover at least two-thirds of the cost up to £5,000 per household. For low income households these grants will cover all costs up to £10,000. The scheme will run until 31 March 2021.

The Green Homes Grants will give homeowners, including owner occupiers and social/private landlords, vouchers to install one or more of the following primary measures:

  • solid wall, under-floor, cavity wall or roof insulation
  • air source or ground source heat pump
  • solar thermal

In addition, households can apply for a further voucher to install secondary measures for additional energy saving. Households will need to install at least one of the primary measures above to qualify for further funding for secondary measures. These secondary measures include the following:

  • double or triple glazing/secondary glazing, when replacing single glazing
  • upgrading to energy efficient doors
  • hot water tank/appliance tank thermostats/heating controls

Secondary measures can only be subsidised up to the amount of subsidy provided for primary measures. (e.g. if a household receives £1,000 for primary measures, they can only receive a maximum of £1,000 towards secondary measures).

The government is urging suppliers of the above-mentioned improvements to sign up for TrustMark or Microgeneration Certification Scheme (MCS) accreditation in order to take part in this scheme.

Homeowners and landlords will need to apply for a voucher online. Once the works are agreed, vouchers will start to be issued from the end of September.

Source: HM Revenue & Customs Wed, 19 Aug 2020 05:00:00 +0100

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