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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

The government is increasing its support to the self-employed over the coming months and ensuring people get paid faster than previously planned.

It has been announced over the past week, that the Government has increased support under the third instalment of the Self-Employment Income Support Scheme (SEISS), with people receiving 80% of average trading profits for November.

As SEISS grants are calculated over three months, the uplift for November to 80%, along with the 40% level of trading profits for December and January, increases the total level of the third grant to 55% of trading profits. The maximum grant will increase to £5,160.

It has been stated that grants will also be paid faster than previously planned – with the claims window opening being brought forward from 14 December to 30 November.

These changes will ensure that self-employed individuals who temporarily cannot carry out their business or have suffered reduced demand due to the outbreak are supported over winter.

In September, the Chancellor announced an extension of the SEISS to provide support throughout the Winter period, with two grants to cover the period until April.

The SEISS continues to be just one element of a comprehensive package of support for the self-employed. In addition to this they can also access other elements of the package which includes Bounce Back Loans, tax deferrals, rental support, mortgage holidays, and other business support grants.

Eligbility for the Grant Extension

Self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
    – are currently actively trading but are impacted by reduced demand due to coronavirus
    – were previously trading but are temporarily unable to do so due to coronavirus

We are here to support you

If you require further information on the SEISS please contact us and speak to one of our expert team on 03302233660 or info@sempar.co.uk.

Here’s the latest information, following the weekend’s announcements as we prepare for our second lockdown.  We want to ensure you, that you are not alone and as always we are here to support you.

As part of the announcement, the Prime minster stated a number of business support packages have been made available including;

Job Retention Scheme

The Coronavirus Job Retention Scheme has been extended for a month with employees receiving 80% of their current salary for hours not worked and further economic support announced.

Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ended in October. This means the extended furlough scheme is more generous for employers than it was in October. This means the extended furlough scheme will give support to the levels given in August.

Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

Eligibility 

Employers
All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
Employees 
Employees are now eligible providing they were on the employer’s PAYE payroll which has been processed by 30th October 2020.

What support is being provided and employer costs:
  • For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
  • Employers will pay employer NICs and pension contributions and should continue to pay the employee for hours worked in the normal way.
  • As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
  • The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, however, there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
We are here to support you

We will ensure we keep you up to date as further announcements are made. If you need any support or wish to ask us a question, please call a member of our expert team on 0330 22 33 660, we are here to support you.

Applications for the second grant are now open. If you’re eligible and your business has been adversely affected on or after 14 July 2020, you must make your claim for the second grant on or before 19 October 2020.

How the grant works

If you receive the grant you can:

  • continue to work
  • start a new trade or take on other employment including voluntary work and duties as a military reservist.

The grant does not need to be repaid if you’re eligible, but will be subject to Income Tax and self-employed national insurance.

HMRC will work out if you’re eligible and how much grant you may get. But you can follow these steps to help you understand how they will do this and what you can do now.

Who can claim

You can claim a grant if you’re a self-employed individual or a member of a partnership and your business has been adversley affected due to COVID-19.

To make a claim for the second grant your business must have been affected on or after 14 July 2020.

All of the following must also apply:

  • you traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
  • you traded in the tax year 2019 to 2020
  • you intend to continue to trade in the tax year 2020 to 2021

You cannot claim the grant if you trade through a limited company or a trust.

If you claim Maternity Allowance this will not affect your eligibility for the grant.

There are also a number of circumstances that can affect the scheme, these being;

  • if your return is late, amended or under enquiry
  • if you’re a member of a partnership
  • if you had a new child
  • if you have loans covered by the loan charge
  • if you claim averaging relief
  • if you’re a military reservist
  • if you’re non-resident or chose the remittance basis
  • state aid

You can check how these circustamnces and how they will affect your eligibity here

How much you’ll get

You’ll get a taxable grant based on your average trading profit over the 3 tax years:

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then we will divide by 3.

The second grant is worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.

How you can claim

The online service for the second grant is now available and you can access this here

To make your claim you will need to use the date HMRC has given you.

We are here to help

If you need to ask our expert team a question on any of the above please call us on 0330 2233660 we will be happy to assist. We will ensure we keep you updated as and when other annoucements are made.