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In a world of social media and email, a world of instant contact and instant replies, a world that’s fast paced and often more careless than carefree, we shouldn’t be surprised that opportunities pass us by each day because we don’t stop and think about our customers and properly engage with them to understand their problems.

How many of you can honestly remember the last time you picked the phone up to speak to your customer to see how they were? Popped in to see one of your customers for a cuppa to ask them how they are doing and what’s changed for them?

Many of you may think you don’t need to, as sales are still coming in and life’s about doing less not more surely, automation is king I hear you say?

Well, yes that’s true … but then COVID came along like a lightening bolt and changed the world as we know it overnight, forever! There’s no going back to ‘normal’, the world has changed and it has changed for good. So what do we do now?

It’s time to pick up that phone and talk to those customers that are still there buying from you. You will be amazed what you learn…
  • Take some time don’t rush the call, once you have them make sure you get as much information out of the them as possible. Find out what you’ve done well, what you haven’t.  The latter are opportunities for you to upsell or to increase the scope of your products and services.
  • Speak to as many as you can and keep an eye out for trends, as these may give you confidence to start offering new services or products or on the other hand that you have some service issues that need fixing quickly.
  • Talk to your customers about the pandemic, how has their world changed and how do they think it will continue to change.
  • Try and work out where you fit into that new world does this mean more business or less business for you?

This exercise will certainly give you more questions than answers but it will give you a starting point and information that will begin to shape your business future. You know what industries to look for and which ones to avoid. You already have a good idea of their needs and their pains and you know the first thing to do when you meet them…. LISTEN!

To finish up we are going to leave you with our four value bombs for igniting your sales revenue for 2021 out of listening to your customers:
  1. Listen to understand what’s important to your customer and what challenges they are facing
  2. Find the opportunities that exist for you to UPSELL your services or products to solve these challenges
  3. What trends do you see across your customers that could open up new products or service lines
  4. Where else do the customers that you can upsell to and sell new products and services to also exist

If you haven’t already check out one of our latest Sempar Talks episodes here where Steve shares four questions you can ask your customers to unlock revenue and grow your business. By talking to your customers and listening to what they’ve got to say, you can identify trends and opportunities for offering new products or fixing issues before you lose business. Understand your customers’ needs and ignite your sales revenue for 2021.

Now get out there and start listening to your customers to grow your businesses.

We wanted to share with our Spring Budget 2021 review, highlighting the main areas the Chancellor touched on following last week’s briefing. With this probably been the most-watched budget in our lifetime there are certainly some key aspects to talk about.

Steve and Pete our Head of Tax have joined together to record a short informative video to discuss their thoughts on the changes announced.

The main points to takeaway

 

Covid-19 support measures

The Coronavirus Job Retention Scheme (CJRS) and the Self-employed Income Support Scheme (SEISS) have both been extended to September 2021. To reflect the fact that lockdown restrictions will be lifted some time before then, the value of the support will fall towards the end of the schemes. The CJRS will continue in its current form until July, at which point the employer will be asked to contribute towards the cost of unworked hours (10% for July and 20% for August and September). The employee will continue to receive at least 80% of their current salary for hours not worked.

A fourth and fifth grant will be paid under the Self-employed Income Support Scheme (SEISS). The eligibility criteria will remain the same except that the person must have submitted a tax return for 2019–20. This is a significant change as it should mean that around 600,000 individuals – mainly the newly self-employed – who were prevented from claiming grants one to three will now be eligible to claim grants four and five. The amount of each grant is equal to 80% of three times average monthly profit, capped at £7,500; however, there is an added complication for the fifth grant: where turnover has fallen by less than 30%, the grant will be capped at £2,850. The fourth grant may be claimed from late April and the fifth by late July. Grants four and five will be taxable in 2021–22.

Business taxes

The pre-Budget kite-flying exercise had suggested a staggered increase in the rate of corporation tax for all companies from 19% to 23%, beginning in September 2021. Instead, the rate will increase to 25% from April 2023. Importantly, the rate will remain at 19% for companies with profits up to £50,000, and a taper mechanism will apply where profits are between £50,000 and £250,000. However, even at 25% the UK’s corporation tax rate will remain the lowest in the G7, and a significant chunk of that cash will be returned to businesses by way of a new ‘super-deduction’ for capital investment.

Briefly, companies investing in qualifying plant and machinery between 1 April 2021 and 31 March 2023 will benefit from new first-year allowances (FYAs). For main-rate assets, there will be a 130% FYA and for special-rate assets, a 50% FYA. Finally, there will be a temporary extension to the period over which a business may carry-back trading losses, from one year to three years. This extension will apply to a maximum of £2m of unused trading losses made in each of 2020–21 and 2021–22.

Personal taxes

A number of allowances and thresholds will be frozen at the amounts applying for 2021–22 for all tax years up to and including the tax year 2025–26. This includes the income tax personal allowance and the basic rate limit, which will be set at £12,570 and £37,700 respectively from 6 April 2021 to 5 April 2026. This is a significant revenue raiser for the Government: freezing the personal allowance and basic rate allowance alone are expected to bring in roughly £19bn.

It will also widen the tax base considerably, meaning that more people will pay income tax than before, and it will significantly increase the number of individuals who pay tax at the higher rate. The Chancellor can expect some hissing here, particularly in light of the manifesto commitment not to raise the rate of income tax and before that, the Prime Minister’s aspiration to increase the point at which the higher rate kicks in to £80,000 (the higher rate threshold is £50,270 for 2021–22).

Other allowances and thresholds to be frozen include the pensions lifetime allowance (£1,073,100) and the capital gains annual exempt amount (£12,300). The Class 1 NICs upper earnings limit and the Class 4 NICs upper profits limit will remain aligned to the higher rate threshold.

Other announcements include:

• the temporary increase in the residential SDLT nil rate band to £500,000 in England and Northern Ireland will be extended to 30 June 2021. The nil rate band will reduce to £250,000 from 1 July 2021 and will return to £125,000 on 1 October 2021;

• the extension of the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. A rate of 12.5% will apply between 1 October 2021 and 31 March 2022;

• the extension of the business rates holiday for businesses in the retail, hospitality and leisure sectors in England to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022;

• the payment of restart grants in England of up to £6,000 per premises for non-essential retail businesses, and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses; and

• a new Recovery Loan Scheme under which the Government will provide an 80% guarantee on eligible loans between £25,000 and £10m. The scheme will be open to all businesses, including those who have already received support under the existing Covid-19 guaranteed loan schemes.

• To combat fraud relating to Covid-19 support measures, in particular the CJRS and SEISS, and including the Bounce Back Loan Scheme, the Government will invest over £100m in a Taxpayer Protection Taskforce of some 1,265 HMRC staff.

Next Steps

We will ensure we keep you up to date as further information is released, in the meantime, if you wish to discuss any of the above, contact us today on 0330 22 33 660 to speak to a member of our team who would be happy to assist.

HMRC has announced that Self assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April 2021.

The self assessment payment deadline is 31 January and interest is then charged from 1 February on any amounts outstanding.

Normally, a 5% late payment penalty is also changed on any unpaid tax that is still outstanding on 3 March. However this year, due to the impact of the COVID-19 pandemic, HMRC is allowing taxpayers more time to pay or set up a payment plan.

Taxpayers can pay their tax bill or set up monthly installments via a payment plan online at GOV.UK. This will need to be done by midnight on 1 April to prevent being charged a late payment penalty.

The online Time to Pay facility allows taxpayers to spread the cost of their self assessment tax bill into monthly installments up until January 2022.

Taxpayers who are required to make payments on account and are expecting their 2020/21 tax bill is going to be lower than the previous year; for example where loss of earnings are down because of the pandemic, can make a claim to reduce these payments.

Finally, self assessment taxpayers who have yet to file their 2019-20 tax return should file by 28 Feburary to prevent being charged a late filing penalty of £100.

For more information and support on self-assessment please contact us if you wish to speak to a member of our expert team on 0330 22 33 660 and we will be happy to help.

The deadline for claiming the third SEISS grant is fast approaching. If eligible, you must make your claim on or before 29 January 2021.

As with the first and second SEISS grants, the third grant will be subject to Income Tax and self-employed National Insurance and must also be reported on your 2020-21 Self Assessment tax return.

Confirming a significant reduction in trading profits

Before you make a claim for the third grant, you must decide if the impact on your business will cause a significant reduction in your trading profits for the tax year you report them in.

HMRC cannot make this decision on your behalf because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.

Please note
You do not have to consider any other coronavirus scheme support payments you have already received when deciding whether you reasonably believe that you will suffer a significant reduction in trading profits due to reduced activity, capacity, demand or inability to trade due to coronavirus during 1 November 2020 to 29 January 2021 (period covered by the third grant).

The third SEISS grant and working parents

If you are unable to work because you have additional caring responsibilities due to school closures, and you meet all other conditions, you are also eligible to claim, provided you reasonably believe that the impact of taking this time off will significantly reduce your trading profits for the year that you report them in.

Details of the eligibility criteria can be found here

Important to note

Due to the impacts of coronavirus, we know that some individuals who are usually self-employed are also seeking other forms of work.

If you receive the grant you can:
  • Continue to work.
  • Start a new trade or take on other work including voluntary work and duties as a military reservist.

You must however declare that you intend to continue to trade.

What’s next?

For more information and support on the above contact us on 0330 22 33 660 to speak to a member of our expert team.

We will also ensure we keep you up to date as and when new information is released.

In years gone by we’d be brushing off those Christmas jumpers and sharing a glass with our fellow colleagues on an annual Christmas party. This year is going to be different and many firms are looking at ways to still bring the Christmas cheer to their employees but in a safe and secure way.

We have taken this opportunity to look at the tax considerations for your virtual Christmas party and despite concerns HMRC have given us some good news and stated all the costs relating to a virtual party will be exempt under the annual function exemption.

Let’s take a closer look at the exemptions available:

Annual function exemption

In the UK employers can take advantage of the annual function exemption, which means no tax or national insurance contributions are payable on costs relating to annual social events organised for employees.

There is a limit on this of £150 per attendee (including non-employee guests) each year and if this limit is breached, the employer must cover the tax and NIC for all of the costs, not just the breach. The exemption considers all end-to-end costs for the event including VAT.

For an event to be eligible for the exemption, it must be open to all employees, or alternatively, if there are several events in multiple locations or offices, all employees should be able to attend one.

HMRC have now confirmed that the exemption will apply to the costs associated with virtual parties in the same way that it would for traditionally held, parties.

Therefore, the cost of providing food, entertainment, equipment and other expenses which may be incurred in hosting a virtual event, will be exempt, subject to the normal conditions of the exemption being met.

Trivial benefits rule

A simpler alternative in the current circumstances may be for employers to provide staff with a gift to enjoy the festivities.

Under the trivial benefits rule employers can provide a gift up to the value of £50 including VAT without paying tax on the item. To qualify the gift cannot be cash (or a voucher that can be exchanged for cash) and it cannot be in exchange for work or performance.

Employers could provide a hamper or a voucher for food and drink, for example. In this instance the trivial benefits exemption should apply, but in the absence of the elements of a Christmas party, the annual functions exemption will not be available.

What about both?

The two exemptions can work alongside each other, so employees can be invited to a Christmas party, allowable under the annual function exemption and also be given £50 of, say, gift vouchers, covered by the trivial benefits exemption.

Want to know more?

If you would like to know more information on the above, please contact a member of our expert team on 0330 22 33 660 and we will be happy to assist.

With so many changes over the last few months, it is no wonder we are all aware of the current stresses and demands we hold.

But there’s a difference between being genuinely overwhelmed and just feeling out of control. Once you take control of your time, that feeling of overwhelm starts to disappear.

We wanted to share three simple actions that will change your mindset and put you back in charge.

Clear your mind

The feeling of being overwhelmed happens when your brain cannot trust that everything is in hand. Instead of focusing on what you should be doing, whether it’s working on an important project, taking some time out with family, or even sleeping, it will keep going over and reminding you of all the things you have to do.

We are all aware of the feeling: I must remember this, I mustn’t forget that and so on, it is clear that we don’t ever switch off, simply because there is too much to remember.

With this in mind, it is important to have a trusted system in place to ensure all of those things are being dealt with. It can be as simple as a pen and paper by your bedside or a message recording function on your phone.

Log everything that comes into your head as it happens and create a system to put it into your diary in the morning or when you are back at your desk. Keep on top of this and your mind will start to clear straightaway.

Structure your day

When you have a genuine plan each morning, you will find you do more of the things that really count and waste less time on the small stuff.

In a typical day, there will usually be some small tasks to do, some of medium importance and some really big, important jobs. Most of us are at our best in the morning, when we have clearer minds and more energy, so schedule your most important jobs for the morning.

If something is likely to take longer than that, finish it over a few days. In the early afternoon, work on your medium tasks and then in the late afternoon do the small things that will not take you long to complete.

Towards the end of the day, as you tick off all those little jobs you will really feel you are making progress.

Be more productive

Did you know that when you start a task it takes an average of 11 minutes to reach your peak productivity level? And that an interruption of just 2.5 seconds sets you right back to zero?

That is one of the reasons it is so hard to get things done. We get interruptions all the time: phone calls, emails, colleagues all disrupt our focus and lower our productivity.

It’s really important to find a way to work undisturbed. You will no doubt say that you are too busy to set aside hours at a time without any interruptions, but you do not have to do that.

In fact, we cannot maintain our focus for that long anyway. We can only properly focus for short periods; after that our concentration wavers and we get distracted by other things.

But you can still achieve a huge amount in short bursts. The Pomodoro Technique is a very effective way to manage this and it is simple to follow. You focus on one task for 25 minutes, without being distracted or moving between different jobs.

At the end of the 25 minutes, you have a five-minute break – you can use it to make a drink or do any small tasks that will not take up more than a few minutes. Then it is back to another 25 minutes fully focused on your work, repeating as often as you want. It is amazing how much you can get done by following this system.

Feeling overwhelmed may be a natural response to the turbulent times we are in, but remaining that way is ultimately bad for your mental health. Making these changes will not stop you from being busy, but they will help you prioritise and put you in control of what you do each day.

As the new ‘normal’ sees more and more individuals working from home, we wanted to share with you the tax implications of buying a garden office through your limited company; for both you and the company:

Company Position

VAT
The business will be able to reclaim all the VAT when it is solely used for business use; where there is an element of private use the VAT reclaim will need to be restricted.

Capital Allowances
The business should be able claim capital allowances on items such as heating or lighting as well as office furniture.

Business property Rates
HMRC state you do not usually have to pay business rates if you use a small part of your home for business such as an office and you only sell goods via post. They state you may need to pay business rates in circumstances where you sell goods or provide services at home, other people who don’t live in the property work at the premises or you make changes to your home for your business, for example, you change your garage into a hairdressers.

Where there is no private use, you solely use the office yourself and have no client meetings there is a strong argument the office will not attract business property rates.

Where there is private use, we consider this to be similar as using a room in your house and therefore no business rate should apply; however other factors could have a bearing on this outcome as described in above scenario.

All opinions are however subjective and can change from one local council to another.

 

Individual

Income tax
Where there is no private use, there would be no benefit in kind and therefore no income tax liability. As the asset would be at your home you would need strong evidence that there was no more than incidental private use for the office in order to satisfy HMRC if they were challenge the stance.

Where there is a private use there would be a benefit in kind based on 20% of the original cost.

Capital Gains Tax on Sale of your home
If the office has been used solely for business use, some of the gain from the sale of the property would not be exempted form capital gains tax through principal private residence (PPR) relief and therefore would be chargeable to capital gains tax. Providing this element is not above your available CGT annual exemption (currently £12,300 per person) no tax would be due.

Where there has been an element of private use and therefore no element has been solely used for business use, the whole of the gain will be exempt from capital gains tax due to PPR.

Here to support you

If you are thinking of purchasing a garden office, please give our expert team a call on 0330 22 33 660 and we would be happy to help you decide how best to buy and structure your new garden office.

The government has now published its official guidance for the Coronavirus Job Retention Scheme (CJRS), which has been extended until 31 March 2021.

The guidance has confirmed many of the details surrounding the extended furlough scheme for employers, as well as explaining the further restrictions on its usage that we have not seen before;

Maternity leave

There has been a significant change confirmed for staff who wish to return from maternity leave early to be instead placed on the Job Retention Scheme and therefore receive more money.

They now need to provide at least eight weeks’ notice of their intention to do this, and their employer cannot place them on furlough until these eight weeks are up. This provides less freedom for staff in this position, and employers will need to make sure that all employees seeking to return off maternity leave early are aware of this.

Depending on their situation, it may be more advisable for them to remain on leave as planned.

Annual leave

On a more positive note, the government have clarified that rules on taking annual leave while furloughed are to remain the same; those who do take it must be paid in full for this time.

Sick leave

They have also provided further guidance for furloughed staff who fall ill, suggesting that, it will be down to employers if they keep them furloughed or class them as on sick leave and therefore start paying them SSP if they qualify.

However, future amendments to the guidance will hopefully clarify this further, and employers should approach this situation with caution for now.

Furloughed staff serving a notice period

Another key aspect is the situation regarding making claims for furloughed staff who are serving their notice period. As previously there were no restrictions on this, and staff could be made redundant even if they were currently on furlough.

It seems the government are going to be a bit stricter in this regard, suggesting that from December they may prohibit claims for those who are serving notice periods.

While this has yet to be confirmed, it would be consistent with previous government plans for the furlough scheme’s planned replacement, the Job Support Scheme before it was indefinitely postponed; claims were not to be permitted for those serving a notice period.

TUPE staff

Finally, another point to consider is guidance on whether staff that has transferred over to a business under TUPE can be furloughed. As before, it seems that this will depend on when the transfer took place.

Going forward, it should be remembered that the furlough scheme has seen numerous amendments since it was originally implemented, a trend that does seem likely to continue over the next few months.

You have our support

As further information is released we will ensure we keep you up to date, and as always please contact us if you wish to speak to a member of our expert team on 0330 22 33 660 or info@sempar.co.uk

In this ever changing landscape of uncertainty the second week of lockdown presents challenges for us all.

Government support is constantly changing and we are here to help keep you informed.

Despite all the chaos this year the Self-Assessment Tax Return filing deadline remains unchanged and online returns for the year to 5th April 2020 must but be submitted to HMRC by Midnight on 31st January 2021 to avoid late filing penalties.

If you haven’t already done so why not take the opportunity during lockdown to send us your personal tax information.

Avoiding the last minute rush will let us give you certainty regarding your Self-Assessment liability and buy back time to focus on the future as we begin to come out of lockdown.

Did you know, If you prefer to have your Self-Assessment liability collected through your PAYE tax code you must submit your online return by 30th December 2020.

To be eligible you must meet all 3 of the following criteria:

  • you owe less than £3,000 on your tax bill
  • you already pay tax through PAYE, for example you’re an employee or you get a company pension
  • you submitted your online tax return online by 30 December 2020

There are a limited number of circumstances when HMRC  may not be able to accommodate your wishes but in the majority of cases the tax you owe will be taken from your salary or pension in equal instalments over 12 months, along with your usual tax deductions.

For more information and support on self-assessment please contact us if you wish to speak to a member of our expert team on 0330 22 33 660 or info@sempar.co.uk.

Chancellor Rishi Sunak has today announced workers across the UK will benefit from increased support with a five-month extension of the furlough scheme. The scheme will now be extended until the end of March.

The furlough scheme was initially extended until 2 December. However, the government is now going further so that support can be put in place for long enough to help businesses recover and get back on their feet – as well as giving them the certainty they need in the coming months.

Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked.

The extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.

Further announcements 

  • The Job Retention Bonus (JRB) has now been suspended and will be reintroduced at a later date.
  • The furlough extension is just one element taken from the package of support the government has set out for businesses including;
    – more than £65 billion in government-backed loans, which have now been extended until 31st  January
    – deferral of VAT payments
    – business rates holidays
    – generous grants for hospitality, leisure and retail businesses
    – a moratorium on eviction for commercial tenants
    – The Statutory Sick Pay Rebate Scheme

You have our support

As further information is released we will ensure we keep you up to date, and as always please contact us if you wish to speak to a member of our expert team on 0330 22 33 660 or info@sempar.co.uk