SEISS - Scheme Extension
The Self Employed Scheme Extension starts from 1st November and will run through to the end of April 2021. The Government are going to pay out 20% of your net monthly wages, for the six month period, in two separate installments (we would imagine payments will land in November and February). There is still to be formal confirmation that the second payment will definitely be paid at 20%. We will confirm this as soon as we know more. If you would like to work out what exactly you will receive in this payment, it will be based on the first two grants, so if you were in receipt of the first grant, you can take this amount, divide it by 8 and then multiply it by 2, this will be the amount payable for the 3 month period. If you only received the 2nd grant, take this amount, divide it by 7 and then multiply by 2 - this is the amount you will receive. We expect the application process to be similar to the last 2 applications, and if there is any change to this we will send out an update.
Self Assessment Payments
Payments on account for Self Employed individuals which were due in July 2020, had been extended to January 2021 - this has now been extended further, any liabilities due in Jan 2021, have now been extended to January 2022.
NO TAX DUE TO BE PAID THIS JANUARY, BUT SELF ASSESSMENTS STILL NEED TO BE SUBMITTED ON TIME, AND PENALTIES WILL STILL BE CHARGED FOR LATE SUBMISSION!
VAT Reductions and Payments
The VAT cut to 5% for Hospitality and Tourism has been extended, and this will run til the end of March 2021. The deferral of VAT payments from earlier this year, was scheduled to end in March 2021, but the Government have now included the option of making 11 interest free installments to pay for any outstanding VAT liability as opposed to one lump sum payment next year
Furlough Scheme being replaced by Job Support Scheme
If you still haven't been able to return to working at your full capacity, after the end of the Furlough Scheme, there has to be the introduction of the Job Support Scheme.
So long as the employee is working on average 1/3 (33%) of their usual working week/month, the government will pay 1/3 of any hours that they haven't been able to work, so long as the employer matches this 1/3 payment. This scheme will clearly be more costly for employer than the furlough scheme. This scheme does not only apply to employees who have been furloughed in the past, it is open to any employee employed after 23rd September. The cap on payments is £697.92 per month and the application process for payment will be similar to the Furlough application. Please contact us to discuss your individual situation.
Bounceback Loan Extension
Many businesses will be under pressure when the Bounceback loan repayments start in May/June next year, if your business is still not back to the usual level of trade, or still trying to recover from the damage this period of reduced trade has had, you will be able to request an extension to the terms of the Bounceback Loan. Your payments can now be spread over a 10 year period as opposed to a 6 year period, which will almost half the agreed monthly repayment. Contact your bank to ask for this to be amended from your original agreement.
VAT Changes to the Construction Industry
There are big changes ahead for the VAT Registered businesses within the Construction Industry. From 1st March 2021 there will be a change in the reporting and payment of your VAT invoices. These changes will affect you, if the following is true;
- You work on any main contract covered by CIS
- Both you and the main contractor/subcontractor are VAT registered
So for anyone that pays you, that would usually deduct CIS, they will now deduct the CIS and the VAT and pay both of these totals over to HMRC on your behalf. For anyone that you pay, that would usually be VAT registered, you not only deduct their CIS now, but you will also be deducting the VAT and paying this over to HMRC on their behalf. This is known as the VAT Reverse Charge for the Construction Industry, and was actually supposed to be live last year, but HMRC fell short on letting people know about the introduction and implementation of the scheme and for that reason extended the introduction to 1st March 2021.
We will be updating the accounting systems for any clients who will be affected as soon as the software changes have been updated, and we are happy to speak to any of you individually to ensure you are clear on how this new system will be operating.
WE WILL ISSUE ANOTHER UPDATE IN DUE COURSE