Category: Business Support

Protecting Your Business Since the time COVID has started business owners specially in vulnerable sectors predominantly retailers, leisure and entertainment trades, will have seen their hard-won capital all but exhausted by the needs to meet fixed costs when income generation has been restricted or eliminated by lock-down directives. The situation is more or less the same for the rest of the business sectors.

And this is in spite of the valiant attempts by the Treasury to provide financial support to those businesses in the COVID firing-line.

Even with a gradual taming of COVID infections as the vaccines start to do their work, we probably have at least another six months of disruption to cope with before its back to business as usual.

Protecting Your Business In the face of these challenges, what can beleaguered business owners do to protect their capital base and be in a position step back into the ring as and when consumers start to edge out of their front doors and start spending?

I suggest the businesses should look at their business in the following way:

• List all of your fixed costs, those that you have to pay even if you have no income coming in and cancel as many as you can that can be re-established when markets open up again. Obviously, many will be tied to contracts that cannot be broken. In which case:
  • Contact suppliers, landlords, service providers etc., and see if you can negotiate a moratorium on payments for a period, a reduction in payments or the cancellation of contracts.
  • When this work is done rework your business plan for the next year and speak to your bank or other sources to secure any cash required to meet the likely dips in cash resources.
• Start to think about waking up your business when consumer interest in spending starts to increase demand for your goods or services.

Finally, speak to us.

There is no substitute for sharing this planning process with your professional adviser. We know your business.

We can, and we want to help. Contact us now so we can start to unravel your options.

Landlords – Tax Year End Planning Tips A few housekeeping tips for landlords of buy to let or holiday let properties to think about and action – if applicable – before the end of the current tax year on 5^th April 2021.

Buy-to-let Properties:

Have you experienced a drop in rental income since April 2020? If yes, make sure you let us have estimates of your buy-to-let income and expenses to say 31 December 2020 (covering the nine months from 1 April 2020) and we will see if an election to reduce tax payments on account is possible.

If you are contemplating repairs to your property(ies) consider the timing of expenditure. Incurring costs before or after 5 April 2021 will affect your tax payments.

Have a look at our Tax planning page.

If you have improved your rental property during 2020-21, please keep details as we will need those if and when you come to sell the property.

In 2023, you may need to computerise your record keeping meeting HMRC’s Making Tax Digital regulations. There are a number of cloud based software packages you could use.

Holiday Let Properties:

To retain the tax advantages you enjoy – holiday let property businesses are treated as trades – you must meet certain occupancy rules. As it is likely occupancy has dropped during 2020-21 due to lock-down periods, a review is critical.

Please contact us if you would like to discuss your options.

HMRC are slowly rolling out their Making Tax Digital (MTD) scheme through Digital Approach. Eventually, selected landlords submitting their rental income and outgoings via self-assessment will need to embrace this new MTD requirement.

https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital#helping-businesses-self-employed-people-and-landlords-get-it-right-first-time

What will it involve?

Self-employed landlords with property income above £10,000 will need to follow the MTD for Income Tax rules from their next accounting period starting on or after 6 April 2023.

Essentially, affected landlords will need to upload quarterly figures – kept electronically – from their accounting software directly to HMRC’s servers. Most accounting software providers will provide this functionality.

Have a look at our Tax planning page for details.

And therein lies the rub. If your property business has income above £10,000, from April 2023, you need to be using accounting software that complies with MTD.

Many landlords still record their income and outgoings manually or use spreadsheets. Unless the spreadsheets can be adapted to provide the necessary upload functionality a more digitally responsive approach will be necessary.

Time to embrace a digital approach?

Although the MTD requirement is still some two years away, converting manual systems to a computerised approach takes time. We can help you select and convert your present accounting records to a software solution that can cope with MTD.

And there are real benefits. With a click of your computer mouse, you can access reports that give you real time information about your property business as well as satisfying the needs for MTD digital uploads to HMRC.

Please Contact Us if you would like to discuss your options.

Any business that has overclaimed a Coronavirus Job Retention Scheme (CJRS) grant must pay back the overclaim repayment to HMRC.

The rules outlined below for paying HMRC back an overclaim also applies to businesses that would like to make a voluntary repayment because they do not want or need the CJRS grant. The CJRS is currently due to continue until 30 April 2021.

Any overpayments can be corrected in your next claim. If you confirm that your business has been overpaid, the new claim amount will be reduced to reflect this overpayment. You will need to keep a record of this adjustment for six years.

https://www.gov.uk/guidance/pay-coronavirus-job-retention-scheme-grants-back#how-to-pay

Alternatively, if you are not making another claim under the CJRS then you can request a payment reference number and pay HMRC back within 30 days. This request needs to be made online.

HMRC’s guidance states that if you have overclaimed a grant and have not repaid it, you must notify HMRC by the latest of either:

• 90 days after the date you received the grant you were not entitled to;
• 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances changed.

Late notifications of overclaimed grants could see the imposition of penalties. Any claims based on inaccurate information can be recovered by HMRC. However, HMRC has stated that they will not be actively looking for innocent errors in their compliance approach.

Having to repay HMRC is unlikely to be a cost that employers will have thought about, so it is important to ensure that all claims made for furloughed employees are accurate. Employers are required to keep full records relating to any CJRS claims (including adjustments) for a period of six years.

Feel free to contact us to book an appointment if you are looking to know more about this news.

Recover CJRS overclaims Those businesses who have over claimed a Coronavirus Job Retention Scheme (CJRS) grant must pay back the overpayment to HMRC.

The rules outlined below for paying HMRC back an overclaim also apply to businesses that would like to make a voluntary repayment because they do not want or need the CJRS grant. The CJRS is currently due to continuing until 30 April 2021.

https://www.gov.uk/government/publications/penalties-for-not-telling-hmrc-about-coronavirus-job-retention-scheme-grant-overpayments-ccfs48

Any overpayments can be corrected in your next claim. If you confirm that your business has been overpaid, the new claim amount will be reduced to reflect this overpayment. You will need to keep a record of this adjustment for six years.

The assessment can include:

• any amounts not used to pay furloughed employees’ wages;
• related costs within a reasonable period.

Employers must pay the amount due within 30 days of the assessment. HMRC can charge interest on any late payments and may also charge late payment penalties if the amount is still not paid 31 days after the due date.

If a company is insolvent and HMRC cannot recover the tax it owes, company officers can become personally liable to pay the tax charged on their companies’ overclaimed CJRS grants. Recover CJRS overclaims

Feel free to contact us to book an appointment if you are looking to know more about this news.

As we expect the coming year/s will be tough for the business. It is really crucial that businesses should plan their activities very carefully and prudently.

If you have managed to retain profits in your business this fat-on-the-bone will help to see you through loss making periods as we endeavor to emerge from COVID disruption, hopefully, later this year.

How long these reserves may last depends on how effectively you manage the process.

If you are impacted by COVID disruption, you will need to ensure that you avail yourself of any Government funded grants via your local authority and wage costs can be 80% covered by the extended furlough scheme. But these will not cover all your fixed costs.

Accordingly, planning is absolutely vital.

You need to figure what your short-term prospects for trading are likely to be and then quantify the minimum level of costs that you will need to carry in order to meet:

Existing fixed commitments, rent for example, and

Other variable costs to deliver any future trade.

If these calculations reveal that you will be trading at a loss for an extended period the only way your business can survive is if:

Your retained profits and personal capital introduced cover these losses, and or

If reserves are exhausted, are you prepared to borrow funds – Government bounce-back loans for example – to fund the excess losses?

We are helping business in devising a business strategy that will ensure that thee business survive during this crises times.

Feel free to contact us to book an appointment.

Following a rapid rise in COVID infections, from today 5th January 2021, England has been placed into a new lockdown. Following this the Chancellor has announced £4.6 billion lockdown grants of new lockdown grants to help support businesses forced to close. The lockdown in England is expected to last until March with a review not due to take place until the February half-term. There are also similar lockdowns across Scotland, Wales and Northern Ireland.

https://www.gov.uk/government/news/46-billion-in-new-lockdown-grants-to-support-businesses-and-protect-jobs

The new financial support announced sees the introduction of a new one-off top-up grant for retail, hospitality and leisure businesses worth up to £9,000 per property. The intention is to help businesses keep afloat until the Spring. This means that some 600,000 business premises across all nations of the UK will receive the one-off cash payment.

The amount businesses in England will be able to claim from their Local Authority for one-off top-ups depends on their rateable value:

• Small businesses with a rateable value of or below £15,000 will be able to claim £4,000.
• Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £6,000.
• Larger businesses with a rateable value over £51,000 will be able to claim £9,000.

£4.6 Billion Lockdown Grants Announced and The Chancellor also announced that another £594million will be added to a discretionary fund to help support other firms affected. The money will be allocated to Local Authorities and the Devolved Administrations to support other businesses not eligible for the grants outlined above.

The Chancellor, Rishi Sunak said:

‘The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further. Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.

This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.’

The previously announced grants package for businesses is still available and the above measures are in addition to this.

Feel free to contact us to book an appointment if you are looking to know more about this news.

What Is A Reasonable Excuse For Making A Late Furlough Claim? HMRC may accept a claim made after the deadline if you had a reasonable excuse for failing to make a claim in time.

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

HMRC’s list of example excuses is as follows:

• your partner or another close relative died shortly before the claim deadline
• you had an unexpected stay in hospital that prevented you from dealing with your claim
• you had a serious or life-threatening illness, including Coronavirus related illnesses, which prevented you from making your claim (and no one else could claim for you)
• a period of self-isolation prevented you from making your claim (and no one else could make the claim for you)
• your computer or software failed just before or while you were preparing your online claim
• service issues with HMRC online services prevented you from making your claim
• a fire, flood or theft prevented you from making your claim
• postal delays that you could not have predicted prevented you from making your claim
• delays related to a disability you have prevented you from making your Furlough Claim
• an HMRC error prevented you from making your claim

If you are looking to know more about this, feel free to contact us.

People use different vehicles for investment for example building a pension fund, a portfolio of shares or deposits with our bank or building society. Most of these investment options reward us for our participation by offering income (usually in the form of interest or dividends) or by demonstrating capital growth (share prices increasing).

Accordingly, there are three components to our investments: the capital sum we invest, any growth in the value of the capital sum invested or rewards (interest or dividends) paid by banks or companies in which we hold shares.

What we do with these rewards, particularly interest and dividends, is key to the speed with which our investments grow.

The reason for this is the impact of compound interest.

If the average return on your investments is say 3%, paid as dividends or interest, if you withdraw these payments your investments will maintain their capital value and over time inflation may reduce the purchasing power of this capital value as the value of money decreases.

Whereas, if you reinvest rewards, future returns will compound, and you are more likely to counter the effects of inflation.

Over short term periods these effects are small, but over longer periods the impact of compounding can be dramatic.

If you are looking to know more about this, feel free to contact us.

EU Importers/Exporters Would Need A Customs Agent?

The businesses which only buy and sell goods from and to the EU but not from any non-EU country probably would have no experience of dealing with the raft of red tape involved in clearing goods through customs and settling any duties or VAT payable.

The businesses will need to abide by the new regulatory situation from 1 January 2021 which is only a matter of weeks from now. They will need to employ someone or appoint a customs agent to undertake the necessary chores.

For most businesses, the latter option may be preferred. The Government has anticipated this need and there is a list of UK customs agent available.

https://www.gov.uk/guidance/list-of-customs-agents-and-fast-parcel-operators#list-of-customs-agents

If you transport goods on behalf of EU or UK businesses, back and forth across the English Channel, the regulations your drivers will need to comply with from 1 January 2021 are significant.

Government has again stepped up and provided detailed guidance. You can Google and download a PDF copy of their Transporting goods between the UK and EU in a no-deal Brexit: guidance for hauliers on the GOV.UK website.

The outcome of current trade talks with the EU is still uncertain. However, whatever the outcome of these talks, UK firms involved in the acquisition and/or transport of goods to and from the EU will need to abide by the new regulations imposed as a result of our exit from the European Union.

If you would like to know more about it, feel free to contact us.