Category Archives: COVID-19

New COVID financial support announced

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Following the impact on businesses in England of the current ‘Plan B’ covid measures and the impact of Omicron on trade in the hospitality sector in particular, the Government has announced a new support package.

The package comprises three elements:

  • Dedicated support for the hospitality and leisure sectors in the form of one-off grants worth up to £6,000 per premises. There will also be more than £100 million in discretionary funding for local authorities to support other businesses.
  • The reintroduction of the Statutory Sick Pay Rebate Scheme (SSPRS) for employers with fewer than 250 employees. This will apply to up to two weeks’ COVID-related absence and is effective immediately, with employers able to make retrospective claims from mid-January.
  • £30 million for cultural organisations through the Culture Recovery Fund.

There will also be £154 million in funding to the devolved administrations in Wales, Scotland and Northern Ireland to provide similar support.

The grants for the hospitality and leisure sectors will be administered by local authorities and the Treasury says they will be available “in the coming weeks”.

For advice, contact us today.

Take advantage of the extension to the Recovery Loan Scheme

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Find out how your businesses can benefit from this Government-backed funding

Although much of the COVID-19 financial support has been withdrawn, the Government still wants businesses to access funding to aid their recovery.

That is why the Chancellor, Rishi Sunak, has extended the Recovery Loan Scheme until 30 June 2022 – instead of it ending on 31 December this year.

Intended to bridge the gap between the previous Coronavirus loans and regular credit conditions, the Recovery Loan could be worth up to £10 million per business, or up to £30 million across a business group.

However, as part of the extension to this scheme, certain criteria will change from 1 January 2022, including:

  • The scheme will only remain open to small and medium-sized enterprises
  • The maximum amount of finance available will decrease to £2 million, per business
  • The Government guarantee offered to lenders will fall from 80 per cent to 70 per cent.

To apply for the Recovery Loan Scheme, businesses need to check the list of accredited lenders on the British Business Bank’s website here.

Not sure if you are eligible or need help making an application?

Speak to us for assistance

HMRC auto-correcting 2020-21 SEISS tax returns

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Where grants claimed under the self-employment income support scheme (SEISS) do not correspond with records held by HM Revenue & Customs (HMRC), it will auto-correct 2020-21 tax returns and issue a new SA302 calculation to both taxpayer and acting agent.

Corrections may be necessitated if:

  • The grant amount was omitted;
  • The amount received appears in the wrong box on the return; or
  • Where HMRC believes a taxpayer was not eligible for the SEISS because of missing self-employment or partnership pages.

If your return is auto-corrected to include details of an SEISS grant, but you did not receive a grant, you should speak with your agent or HMRC immediately as this could point to fraudulent activity.

2020-21 self-assessment tax returns should accurately report the first three SEISS grants, as the grants are taxable in the tax year that they are received.

HMRC has only been auto-correcting returns since 19 June, meaning that any received before this date will still require manual input and so the wait time for processing these may be longer.

If you receive notification that your tax return has been auto-corrected, you may choose to either accept the correction and amend the return, if appropriate, or dispute it.

If you intend to dispute a correction, you should ensure this is notified to HMRC within 30 days of the correction notice and in writing, where possible.

A careful review of your records, and the right professional advice where necessary, should enable you to determine the applicable response.

Where you have received any SEISS or other taxable grants, your accountant or adviser should be made aware of these to enable them to accurately prepare your tax returns.

Link: Tax returns auto-corrected for SEISS grants

The fifth round of the Self-Employment Income Support Scheme (SEISS) is now open

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HM Revenue & Customs (HMRC) has announced that the portal for the fifth round of the Self-Employment Income Support Scheme (SEISS) is now open.

In recent weeks, the tax authority has been directly contacting taxpayers that it believes are eligible for the fifth round of the scheme, providing them with their personal claim date.

These individuals can now make a claim from this date using the link below:

Make a claim via the SEISS claims portal

Taxpayers can claim from their personal claim date up until the claims service closes on 30 September 2021.

Earlier this month HMRC published detailed guidance for the fifth round of the Self-Employment Income Support Scheme (SEISS), which confirmed the following:

Eligibility

To be eligible for the grant, an individual’s trading profits in 2019 to 2020 must have been no more than £50,000 and must have been at least equal to income from other sources.

Self-employed individuals must also confirm that they:

  • Intend to continue to trade in 2021 to 2022; and
  • Reasonably believe there has been a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to Coronavirus from May 2021 to September 2021.

They will also need to keep records of evidence that supports their declaration.

Turnover

Unlike previous rounds of the scheme, the fifth round of the SEISS will offer two levels of grant, depending on the impact Coronavirus has had on a self-employed individual’s turnover in a 12-month period beginning between 1 and 6 April 2020.

Those whose turnover fell by 30 per cent or more will once again be able to claim a grant worth 80 per cent of three months’ average trading profits, capped at £7,500 in total.

Meanwhile, those whose turnover fell by less than 30 per cent will be able to claim a grant worth 30 per cent of three months’ average trading profits, capped at £2,850 in total.

Self-employed individuals who have already completed their 2020 to 2021 Self-Assessment Tax Returns can find their turnover figures there, although they should not include anything reported as ‘other income’.

They should also be aware that this figure will only apply to a 12-month figure beginning on 6 April 2020 and turnover for a period beginning earlier in April 2020 could be different.

Previous SEISS grants, Eat Out to Help Out payments and local authority or devolved administration grants should not be counted towards turnover figures for the purposes of the scheme.

However, with 2020 to 2021 Self-Assessment Tax Returns not due until 31 January 2022, many self-employed individuals will not yet have completed a return. In these circumstances, HMRC advises that individuals should:

  • Check their accounting software
  • Go through bookkeeping or spreadsheet records that cover self-employment invoices and payments received
  • Check the bank account they use for their business to account for money coming in from customers

This turnover figure should then be compared with the figure reported on a 2019 to 2020 Self-Assessment Tax Return to calculate the percentage fall in turnover during the year to April 2021 and reported to HMRC. Self-employed individuals can access their previous returns by accessing their personal tax account online.

Where 2019 to 2020 was not a normal trading year for a self-employed individual, they may use the turnover reported in their 2018 to 2019 Self-Assessment Tax Return. However, they must show how 2019 to 2020 was not a normal year.

HMRC gives the following examples of circumstances that might have meant 2019 to 2020 was not a normal year:

  • Being on carers leave, long-term sick leave or having a new child
  • Carried out reservist duties
  • Lost a large contract
  • Did not submit a 2019 to 2020 return for reasons that mean you are still eligible for a grant, such as having a new child.

Self-employed individuals who began trading in 2019 to 2020 and did not trade in any of 2018 to 2019, 2017 to 2018 or 2016 to 2017, may claim 80 per cent of three months average trading profits, capped at £7,500 in total, as long as they meet the other eligibility criteria.

In a slight change to the earlier guidance, for the purposes of the turnover test partners making a claim should use turnover for the partnership as a whole, except if they have another business (either a sole trade or partnership), in which case they use their share of partnership turnover when making the comparison.

The clarifies that the profit share rules apply only when the partner has multiple trades in either 2019/20 or the pandemic period.

Taxable treatment of the grant

SEISS grants are subject to Income Tax and National Insurance Contributions and must be included on a 2021 to 2022 Self-Assessment Tax Return. Grants are also counted toward annual allowances for pension contributions.

For help and advice, please contact us.