Following the raft of economic support measures that were announced last week, we are hoping that the Government will deliver further details this week which will prove vital in how you and your business navigate this difficult time.
Self-Employment Income Support Scheme (SEISS)
While we await the scheme to get up and running, we want to ensure that our clients are aware of the following:
- You cannot yet apply for SEISS.
- HMRC will contact you if you are eligible and invite you to apply online.
- You will access this scheme ONLY through GOV.UK.
- If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and then asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
- Once HMRC has received your claim and you are eligible for the grant, they will contact you to inform you of much you will receive and the relevant payment details.
- If you claim tax credits, you will need to include the grant in your claim as income.
As soon as we have more detail on how HMRC will execute SEISS, we will be in touch again with another update. But in the meantime, please be mindful and keep your banking information safe and out of reach of fraudsters.
Changes to insolvency rules to help companies trade
In response to the Coronavirus outbreak, business secretary, Alok Sharma, has announced changes to the insolvency rules.
Reforms are to be introduced to enable UK companies undergoing a rescue or restructure to continue trading, helping them avoid insolvency.
These will include enabling them to buy supplies while attempting a rescue. The new rules will also temporarily suspend wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors, so that they can keep their business afloat without the threat of personal liability.
The measures aim to reduce the burden on business, allowing much-needed breathing space with this proposed moratorium.
Remember that Champion is always here to support you with any concerns about your company.
As a UK VAT registered business with a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:
- Defer the payment until a later date
- Pay the VAT due as normal
Your business still needs to submit its VAT Return to HMRC on time.
HMRC will continue to process VAT reclaims and refunds as normal.
HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.
We have already alerted our clients to this, but if you normally pay by Direct Debit then you should contact your bank to cancel your Direct Debit as soon as you can, or you can cancel online if you’re registered for online banking.
VAT payments due following the end of the deferral period will have to be paid as normal and further information about how this will work is to be released soon by HMRC.
Those who are self-employed have the option to defer their Self-Assessment payment on account of tax, which would be due on 31 July 2020.
This is an automatic deferral and no application to HMRC is required. No interest or late payment penalties will be charged.
Do, however, speak with your Champion advisor for support, as deferring could leave you facing an even bigger tax bill on 31 January 2021.
Can a Director be furloughed?
This is a question that has been raised by many of our clients, particularly by those who are the sole Director of their company.
Following our enquiries, we understand that Directors can furlough themselves in line with the Government scheme.
A salaried owner-manager can continue to act as a Director and fulfil their statutory and administrative obligations, such as filing accounts, and will still be furloughed under the scheme if that is the only duties in which they undertake.
In such instances, a Director should consider the need to furlough when the business is unable to provide services to its customers during the COVID-19 outbreak.
For more information, please contact your Champion advisor or your local Champion office.