Category: COVID-19

Where possible staff members are work from home during COVID 19 and businesses are providing them with necessary equipment and tools to do their work. There is a confusion as to if this equipment give rise to taxable benefit for employee.

An employee “fringe benefit” is a form of pay other than money for the performance of services by employees. Any fringe benefit provided to an employee is taxable income for that person unless the tax law specifically excludes it from taxation.

Where an employer, in consultation with their employee, judges an employee can carry out their normal duties from home they should do so. Public sector employees working in essential services, including education settings, should continue to go into work where necessary.

Anyone else who cannot work from home should go to their place of work. Following COVID-19 secure guidelines closely can substantially reduce the risk of transmission. Give extra consideration to people at higher risk.

Below is a summary of the key expenses:

Mobile phones and SIM cards

• One mobile phone and a SIM card does not bring a taxable benefit for an employee.

Broadband

• If the employee already pays for broadband, that is taxable benefit for employee.

Laptops, tablets, computers, and office supplies

• If these are mainly used for business purposes and not major private use, these are non-taxable benefit for employee.

You can look at the UK Government guidance by clicking here

If you have any questions; feel free to contact us or Telephone: 020 3883 4777

or Rana Zubair at Apex Accountants and Tax Advisors

HMRC has recently announced that from 1st April 2020, services provided by certain healthcare professionals will be treated at zero rate for VAT. The list of “relevant practitioners” now includes qualified prescribers and practitioners.

Just to further clarify, the “relevant practitioners” also include:

• community practitioner nurse prescribers
• nurse independent prescribers
• optometrists
• independent prescribers
• The pharmacist independent prescribers
• The physiotherapist independent prescribers
• The podiatrist independent prescribers
• supplementary prescribers, as defined in article 1(2) of the Prescription Only Medicines (Human Use) Order 1997(a)
• EA health professionals as defined in section 213 of the Human Medicines Regulations 2012

The Services that are not exempt from VAT

The following services are taxable at the standard rate:

• health services not performed by an appropriately qualified and registered health professional, except when either directly supervised by such a person or provided within a hospital or within other state-regulated institutions providing healthcare
• services not aimed at the prevention, diagnosis, treatment or cure of a disease or the  health disorder, such as paternity testing and the writing of articles for journals
• services directly supervised by a pharmacist
• general administrative services such as countersigning passport applications and providing character references
• Health professional staff supplies are subject to VAT, except when they are exempt under the nursing agencies’ concession.

If you are a health professional registered on the appropriate statutory register, such as a medical practitioner, dentist, nurse, osteopath, dietitian, etc., and ALL of the services that you provide to your patients pass HMRC’s second test for medical services, you are exempt from registration for VAT.

Next Step:

If you are looking to know more about VAT exemptions, please feel free to Book a free consultation now.

Bad Debt Relief For VAT Filers

While we are under a severe economic condition and there is a risk that some businesses might not pay their suppliers.

There are rules available where a business can claim relief where a customer does not pay.

Background:

The bad debt relief rules are intended to ensure that VAT is not a cost to a business that suffers a bad debt following non-payment by customers.

Those businesses which are under the Cash Accounting Scheme, they avail bad debt relief automatically.

At the same time, such businesses have a disadvantage that they can’t claim input on purchase invoices until they have paid to suppliers.

How it works:

A business can claim bad debt relief on a VAT return (positive entry in Box 4) when ALL the following conditions are met:

• The sales invoice in question is more than six months overdue for payment;
• The invoice has been written off in the business’s accounting records;
• Output tax must have been paid to HMRC on a past VAT return;
• The debt must not have been sold, factored or paid under a valid legal assignment.

The latest time a claim can be made in four years and six months after the later of:

• The time of supply (usually the invoice date); or
• The due date for payment.

If an invoice is written off and bad debt relief has been claimed, then output tax must be declared on any payment subsequently received from the customer (HMRC notice 700/18 para 2.2).

If you have any question on the VAT issues; feel free to contact us

For those who are unable to pay due to corona-virus, HMRC will discuss your specific circumstances to explore, including the following:

• agreeing on an installment arrangement
• suspending debt collection proceedings
• cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

The helpline number is 0800 024 1222 – and is an addition to other phone contact numbers.

Opening hours are Monday to Friday from 8 am to 4 pm.

We are the UK’s tax, payments and customs authority, and we have a vital purpose. We collect the money that pays for the UK’s public services and help families and individuals with targeted financial support.

Apex Accountants do this by being impartial and increasingly effective and efficient in our administration. We help the honest majority to get their tax right and make it hard for the dishonest minority to cheat the system.

HMRC is a non-ministerial department, supported by 2 agencies and public bodies.

More information is available on the HMRC website