Tax Benefits For Employees That Are Work From Home

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

No VAT For Certain Healthcare Professionals

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.

Five Things To Plan And Do Now

Here is a list of five things that you. As a business owner, need to be aware of and plan right now!

  1. Control over cash flow / Arrangements with a lender
    Be sure that you look after your cash flow and if you anticipate problems. Arrange with lenders that would be able to help you with financing.
  2. Supply chain availability
    Due to COVID 19 supply chains across the world are disturbed for most of the products and services. Make sure you are aware of any impact on your business and can put alternative supply chains in place if needed.
  3. Health & safety
    You need to ensure that your business has new health & safety policies and procedures in place. Also, be mindful that this could be at an additional cost that you have not included in your budget.
  4. Working from home
    Since most of the staff would be working from home for the foreseeable future; the businesses should ensure they have good & reliable systems is in place to make this happen. Working from home for a more extended period ultimately means that the staff should receive training and support to work independently. Ensuring they have the software and equipment they need might also influence your budget.
  5. Tax and Business Cost efficiency:
    As we are expecting to a severe downturn in the economy; it is crucial for the success of a business that they have achieved tax and cost efficiency to gain maximum profits.

These are Five things Need

To help businesses, we are providing a service to review if they are an optimum level of cost and tax level.

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

Bad Debt Relief For VAT Filers

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

Financial Assistance By Local Council – Grants

e Financial Assistance By Local Council – Grants

The government has announced two major incentives for local businesses affected by the coronavirus: a business rates holiday for the year 2020-21 and cash grants for small businesses. Local Councils or Authorities will deliver the grants to eligible businesses within their boroughs.

There are two types of grants funding schemes:

• the Small Business Grant Fund (SBGF)
• the Retail, Hospitality and Leisure Grant Fund (RHLG).

Summary of available Grants:

Scheme Small Business Grant Fund (SBGF) Retail, Hospitality and Leisure Grant Fund (RHLG)
Available to:
All businesses in England in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR) in the business rates system Businesses in England in receipt of the Expanded Retail Discount (which covers retail, hospitality and leisure) with a rateable value of less than £51,000
How much
£10,000 £10,000

for premises with a rateable value of up to £15,000

£25,000

for premises with a rateable value of over £15,000 and less than £51,000

Eligibility criteria
Premises which on the 11 March 2020 were eligible for relief under the business rate Small Business Rate Relief Scheme (including those with a Rateable Value between £12,000 and

£15,000 which receive tapered relief)

Premises which on the 11 March 2020 had a rateable value of less than £51,000 and would have been eligible for a discount under the business rates Expanded Retail Discount Scheme
Premises which on 11 March 2020 were eligible for relief under the rural rate relief scheme
Exclusions
Premises that were not eligible for percentage SBRR relief (including those eligible for the Small Business Rate Multiplier) Premises with a rateable value of over £51,000
 

Premises occupied for personal uses, e.g. private stables and loose boxes, beach huts and moorings

 

These aroccupied for personal uses, e.g. private stables and loose boxes, beach huts and moorings

Car parks and parking spaces Car parks and parking spaces
Businesses which as of the 11 March were in liquation or were dissolved Businesses which as of the 11 March were in liquation or were dissolved

This post contains information published by the ACCA and the UK Government.

Coronavirus Job Retention Scheme

Coronavirus Job Retention Scheme

How much you’ll get
Your employer will get a grant to cover 80% of your monthly earnings, up to a maximum of £2,500.
Firms will be eligible for the grant once you have been furloughed, from 1 March.

Your employer

  • will pay you at least 80% of your usual monthly earnings, up to a maximum of £2,500, as your wage
  • can claim for a minimum of 3 weeks and for up to 3 months – but this may be extended
  • can choose to pay you more than the grant – but they do not have to

You’ll still pay Income Tax, National Insurance contributions and any other deductions from your wage.

If you are concerned that your employer is not paying you what you are entitled to, then you should raise this with your employer in the first instance, then with Acas (Advisory, Conciliation and Arbitration Service).

How your monthly earnings are calculated

If you’ve been employed (or engaged by an employment business in the case of agency workers) for a full year, employers will claim for the higher of either:

  • the amount you earned in the same month last year
  • an average of your monthly earnings from the last year

If you’ve been employed for less than a year, employers will claim for an average of your monthly earnings since you started work. The same arrangements apply if your monthly pay varies, such as if you are on a zero-hour contract.

If you started work in February 2020, your employer will pro-rata your earnings from that month.

Bonuses, commissions and fees are not included as part of your monthly earnings.

More information are available from the Government website about Coronavirus Job Retention Scheme

HMRC Phone Line For Help

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

 

What do HMRC deal with?
The term Her Majesty’s Revenue and Customs (HMRC) refers to the tax authority of the U.K. government. The agency, also known as Her Majesty’s Revenue Services, is responsible for collecting taxes, paying child benefits, enforcing tax and customs laws, and enforcing the payment of minimum wage by employers.

Self-Employment Income Support Scheme From HMRC

Self-Employment Income Support Scheme From HMRC

As per the Government’s announcement, the scheme will allow self-employed to claim a taxable grant worth 80% (the same percentage as announced for employees) of trading profits up to a maximum of £2,500 per month (same amount as announced for employees) for the next three months. This may be extended if needed.

Who is eligible:
The Self-employed individual or a member of a partnership and those:

  • Who has submitted Income Tax Self-Assessment tax return for the tax year 2018-19; (HMRC has given time to file a tax return to those who have not filed for 2018/19)
  • Traded in the tax year 2019-20
  • Are trading at the time of application or would be except for the COVID-19
  • Intend to continue to trade in the tax year 2020-21
  • Have lost trading/partnership trading profits due to the COVID-19

To be eligible self-employed trading profits must also be less than £50,000 and more than half of the income comes from self-employment.
This is determined by at least ONE of the following conditions being true:
Trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of the total taxable income
Average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
For those who have less than three years’ self-assessment, the average income will be calculated accordingly.

More information are available from the Government website

A Roadmap to COVID-19 Financial Relief

We are following all the guidance and advice issued and are maintaining our services with business as usual (which is continually under review as we monitor the situation).

Given this will be a time of need for many businesses and individuals, we are committed to the preservation of businesses/employment and keen to continue this support.

As expected, we are seeing a number of sectors being massively impacted already if you are one of them do not hesitate to get in touch. COVID-19 Summaries

COVID-19 – Emergency Economic Measures as of 18 March 2020

Key points: –

  • £350bn of Loan Guarantees
  • Business Rates Holidays
  • Business Grants
  • Time to Pay Schemes
  • SSP Relief
  • Business Interruption Insurance
  • Mortgage Payment Holiday

Loan Guarantees (The COVID-19 Business Interruption Loan Scheme) (‘CBILS’)

Much of the detail remains unclear,  the government is proposing to guarantee up to £350bn of loans made to UK companies, via the British Business Bank.

Companies big and small across the UK are under pressure, with cash-flow being a particular concern as a result of reductions in turnover.

CBILS

Nevertheless, CBILS is not a grant.  It is a loan, and companies will have increased debt as they (hopefully) emerge the other side.

The government has confirmed that they will limit the guarantee to 80% of the value of the loan, and there will be no charge to either businesses or banks for providing the guarantee.

The government has advised that CBILS will offer favorable interest rates, with the government covering the first six months of interest on the loan.

Business Rates Holidays

They have scrapped business rates on all commercial properties in the retail, leisure, and hospitality sectors.

The Chancellor explicitly stated that this would extend to all shops, pubs, theatres, music venues and restaurants. From this, we can infer that cinemas, clubs, leisure centers, hotels, and entertainment venues will also receive exemptions.

Business Grants

The Chancellor announced that retail, leisure, hospitality businesses will receive grants of £25k, having value between £15k and £51k.

The ‘smallest’ businesses in the country, across all sectors, will also be able to seek grants of £10k.

 

  • Small business rate relief applies to companies with a property with a rateables value of less than £15k. The rates ordinarily payable on these properties are reduced, with properties having a rateable value of £12k or less paying nil rates, and tapered rates applying between £12k and £15k.
  •  Rural rate relief applies in rural communities with a population below 3,000, and your business is either the only shop or post office (with a rateable value of up to £8.5k) or the only petrol station or pub (with a rateable value of up to £12.5k).  In these cases, no business rates are payable.

We should also expect that these grants will be subject to conditions, as otherwise, they will be open to abuse.

Time to Pay Schemes

There has been no official extension to TTP schemes, or any obvious relaxation of the criteria applied by HMRC.

SSP Relief

The legislation is to be brought forward to allow employers to recover COVID-19 related SSP from the government.

This will be limited to employers with fewer than 250 employees (as at 28 February 2020) and will cover up to two weeks’ SSP.

This will only apply once the new regulations are in force.

Mortgage Payment Holiday

The government has announced that there will be a 3 months’ holiday for residential and BTL properties.

Please don’t hesitate to contact us.

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