June Newsletter

June Newsletter

June Newsletter

JOB RETENTION “FURLOUGH” SCHEME EXTENDED TO OCTOBER

Chancellor Rishi Sunak announced on 12 May that the CJRS scheme will be extended until the end of October. The scheme will continue in its current form until the end of July with the Government paying 80% of employees’ wages up to £2,500 a month. For accounts purposes the amounts received should be credited to a “grants received” account, and this will therefore increase taxable profits of the business.

From 1‌‌ August to the end of October, HMRC will introduce more flexibility so employers will be able to bring their furloughed employees back to work part-time and contribute to paying employees' wages while still receiving support from the scheme.

On Friday 29 May the Chancellor announced that the Government will stop reimbursing NICs and pension contributions from 1 August 2020. From 1 September 2020 the amount reimbursed by the Government will be reduced to 70%, limited to £2,190. There will be a further reduction to 60% from 1 October 2020, limited to £1,875.

We will of course continue to assist you in making furlough claims.

SELF-EMPLOYED INCOME SUPPORT GRANTS ALSO EXTENDED

Sole traders and members of partnerships started making claims under the Self-Employed Income Support Scheme on Wednesday 13 May and many have already received their grant.

Unfortunately, unlike the CJRS furlough scheme, claims could not be made by agents on behalf of clients although we can of course check that you have received the correct amount and request a review if the amount is incorrect.

In order to be eligible your self-employed profits in 2018/19 must not exceed £50,000 and must be more than 50% of your total income. If that test is not met, then the same £50,000 and 50% tests are applied to average profits and total income over the three years (or shorter period) to 5 April 2019.

The amount of the grant that can be claimed is 80% of average profits for the three years to 5 April 2019. The grant is capped at £2,500 a month and the maximum amount is £7,500 for the initial 3 month period. The Chancellor has now announced that this scheme would be extended for 3 months from 1 June but reduced to 70% of average profits, limited to £6,570.

There are a number of anomalies, for example if the trade commenced 6 October 2017 the profits for 2017/18 and 2018/19 are divided by 2 to establish an annual profit figure rather than divided by 18 months which we consider to be unfair.

Like the CJRS furlough payments the amounts receivedare included in your trading profits and thus subject to income tax and national insurance.

P11D FORMS STILL DUE BY 6 JULY

Despite the coronavirus lockdown HMRC have announced that they will still expect P11d forms reporting expenses and benefits to be submitted by the normal 6 July deadline.

Remember that reimbursed expenses no longer need to be reported where they are incurred wholly, exclusively and necessarily in the performance of the employee's duties. Dispensations from reporting are no longer required.

Note also that trivial benefits of no more than £50 provided to employees need not be reported.

DIARY OF MAIN TAX EVENTS

June/July 2020

Date

What’s Due

01/06

Corporation tax for year to 31/8/19 (unless pay quarterly)

19/06

PAYE & NIC deductions, and CIS return and tax, for month to 5/6/20 (due 22/06 if you pay electronically)

01/07

Corporation tax for year to 30/9/19 (unless pay quarterly)

05/07

Last date for agreeing PAYE settlement agreements for 2019/20 employee benefits


Will Covid-19 Accelerate Remote Working Practices?

The coronavirus lockdown has forced businesses to adopt remote working across the board. Will employees want to continue working from home post covid-19?

In the past 10 years or so, the number of people working remotely has increased significantly.

Major contributors to this shift include technology related advancements, cultural changes to work-life integration and family commitments.

The Covid 19 lockdown has forced firms to rethink the way they do business. Most firms have rolled out new approaches to business continuity, cyber security and, of course, remote working.

Here at Fletcher Thompson have been working from home since the 23 of March, the day that lockdown started. Whilst working from home, we have been using Zoom as a tool to have our weekly catch up that we usually had in our meeting room. Work has continued well as if we have been at the office. Fortunately, we have a capable team who are able to adjust to the situation we are currently in and continue with the same work ethic and work rate as if we were in the office.

 Regardless of what happens next, it is unlikely that working practices will return to the way they were. Commuting from home to a central office where you have face-to-face interactions with colleagues could become a thing of the past.

 Firms that do not have flexible or work-from-home policies will struggle to retain employees and attract the best people.  Now that those working in industries such as technology, finance or service-based roles that can be performed online have shown that they can perform their role from home, they are less likely to see the need to go to the office. If businesses ask millennials and Generation-Z workers to return to the office, they are likely to be asked “Why?”

 The most successful businesses will be those who encourage their people to develop their communication skills, focus on collaboration and roll out the technology that enables their people to perform their job online. However, not everyone will be able to work from home, all the time and some people may prefer to work in the office.

In addition, those working in front line public services, retail, healthcare and the hospitality industry will still have to go to their place of work.

What we have learnt is that we can be more flexible in our working but we still work better as a team together in the office. It does however mean that when staff need to work from home, they no longer need to be treated as if they were out of the office and not contactable. We are looking forward to getting back to the office and catching up with everyone when it is safe to do so.