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Practical Business Advice CoronaVirus

25 - 03 - 2020

 

Advice Note

 

Practical Business Advice – Coronavirus

25 March 2020

 

The Government is continuing to issue advice and guidance for businesses. Whilst there is a lot of speculation in the media we are still awaiting clarification on how some of the measures are to be implemented. Foremans will continue to update our clients as and when information is received from the Government. We have noted below some measures which we believe may affect our clients.

 

 

Employers

 

A Coronavirus Job Retention Scheme has been announced. All UK employers with a PAYE scheme will be able to access support to continue paying some of their employees’ salary whilst they are unable to work during the crisis. The suggested amounts are the lower of 80% of salary and £2,500 per month. The payment will be a grant rather than a loan. We believe the salary will be paid through the normal business payroll under the Real Time Information (RTI) system.

 

 

VAT

 

All VAT registered UK businesses will be eligible to defer any VAT payments due between the 20 March 2020 and the 30 June 2020. VAT payments due to be paid in this period will need to be paid by the end of the 2020/21 tax year. For example - VAT payments due in this period may be as follows:

 

Quarter End	Normal Payment Due Date if paid by bank transfer:
29.02.2020	07.04.2020	Defer
31.03.2020	07.05.2020	Defer
30.04.2020	07.06.2020	Defer

 

If you pay by Direct Debit we would advise cancelling your direct debit immediately.

 

VAT refunds and reclaims will be paid by the Government as normal.

 

VAT returns should still be filed by the due date.

 

 

Self Employment

 

If you are self employed and are due to make a self assessment payment on account on 31 July 2020 you can defer making the payment until 31 January 2021. We are not yet aware if this will need to be applied for or if it will be automatically applied.

 

 

 

Time to Pay

 

HMRC have also upgraded their time to pay service for businesses. If you have missed or are worried about missing a tax payment due to Coronavirus you should contact HMRC to discuss being allowed additional time to make payments. The HMRC helpline number is 0800 0159 559

 

Please be aware that the advice and proposals regarding coronavirus are constantly changing and before acting on any of the above you should check the current situation with:

 

www.gov.uk

 

 

If you would like to discuss any of the issues noted above please contact us on:

 

01244 625 500 or 01978 364 000

contactus@foremansllp.com

 

Whilst all due care and attention has been taken in the preparation of these notes no liability can be accepted for any omission or item contained therein.

 

Foremans LLP

25 March 2020

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Fixed Data

Assumptions

General                                                                                                                              

• The user is over 21 and subject to tax in the UK
• The user wishes to minimise their tax liability
• The user is subject to national insurance i.e.he/she is not over retirement age
• Only current tax rates and limits are applied
• No tax mitigation payments are made e.g. pension contributions
• Only 3 digit letter 'L' tax codes shown in the drop down list can be entered 
• The user does not have a turnover greater than £100,000 where fewer reliefs and or higher taxes may apply

Expenses

• All miles claimed as expenses are for business use using a personally owned car or van
• All other expenses claimed are wholly, necessarily and where appropriate exclusively for the benefit of the business

Foremans LLP Charges

• Foremans fees associated with Limited Company, Sole Trader or Umbrella are as per published rates
• Foremans current Service Costs are allowed for in all calculations.

Holiday Pay

• Holiday pay is accumulated week by week by Umbrella or Agency employer but paid out during the year

VAT

• Limited Company or Sole Trader will be VAT registered
• Limited Company or Sole Trader will take advantage of Flat rate VAT
• Flat rate applied includes the benefit of the additional 1% applicable to the first year of VAT registration

Limited Company Conditions

• One director / one shareholder in a Personal Service Company
• Director of Personal Service Company elects to vote for 100% dividend after salary, costs and expenses
• Director's salary is maximum salary to the primary threshold for NI
• The Limited Company is trading normally i.e it is not subject to IR35 and is not a Managed Service Company

NOTES

• The Current tax rates are taken from the Fixed Data Table
• The current Value Added Tax Rate is 20% and is applied to all invoices and expenses as appropriate
• The Director's Salary is fixed in relation to National Insurance thresholds. Higher Rate Taxpayers should consider the advantages and disadvantages of a larger annual salary or bonus
• Higher Rate Taxpayers may wish to consider the advantages and disadvantages of shared ownership of their business
• Users with a tax code other than three digits and letter "L" may telephone or email our Development Department to request a detailed calculation
• Generally the use of an Umbrella rather than an Agency payroll is only efficient if sufficient weekly expenses are allowable and claimed
• The expenses claimed under an Umbrella should not prevent the proper operation of National Minimum Wage