James Bool. Director of Accounting Equations Limited
Accounting Equations Limited provides a pro-active service for the small business (sole trader, partnerships and limited companies). The combination of services on offer include book-keeping, VAT, Payroll and Self Assessment. “ I do not expect my clients to do their own book-keeping. They provide receipts, invoices, bank statements, cheque and paying in books, and I do the rest.” The payroll service provided is quite unique. James gets his clients to phone or email their employee hours before Thursday of each week, and the wage slips are personally delivered that evening. “I like to think I offer a personal service to my clients. If they need information or have any questions, I am always available day or night to speak with them.” Other services offered include budgeting, management accounting, business incorporation and tax planning. “I am a great believer in Continuous Professional Development and subscribe to professional institutions such as Mercia who offer training and support to accountants. “ If any local business is interested in contacting James Bool they can do so via his website at www.accountingequations.co.uk or by telephone on 01493 656781.
COVID-19: Employee Job Retention Scheme
How to make a claim
The online portal for making claims is expected to be available by 20 April according to HMRC.
If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf, so please speak to them now.
Claims are expected to be allowed to be made every 3 weeks.
To make a claim you will need the following information:
Employer PAYE reference number
The number of employees being furloughed
The claim period (start and end date, the start date cannot be before 1 March 2020)
Amount claimed the minimum length of furloughing is 3 weeks)
Your bank account number and sort code
Your contact details
You must calculate the amount to claim, HMRC will not do it for you. HMRC have said that they will retain the right to retrospectively audit all aspects of your claims.
Coronavirus: relaxation of the statutory annual leave rules
Regulations have taken effect which amend the Working Time Regulations 1998 to relax the current restriction on carrying forward untaken annual leave. What’s been amended and why?
Under the Working Time Regulations 1998 (WTR), workers have a statutory right to 5.6 weeks’ paid annual leave. The WTR require that at least four of these weeks must be taken in the holiday year in which they accrue, as they prevent them being carried forward into the next holiday year (although case law has carved out exceptions here relating to long-term sick leave and maternity leave). The additional 1.6 weeks can be carried over by agreement in writing, e.g. in the employment contract, as can any further contractual annual leave.
The Working Time (Coronavirus) (Amendment) Regulations 2020 came into force on 26 March 2020. They have now amended the WTR to insert an exception to this bar on carrying forward untaken annual leave. They provide that where, at the end of the holiday year, it was “not reasonably practicable” for the worker to take some or all of their leave as a result of the effects of coronavirus (including the effects on the worker, the employer, or the wider economy or society), they can now carry forward that annual leave and take it in the following two holiday years. This new rule applies to the four weeks of annual leave. It does not apply to the additional 1.6 weeks but, as stated above, those weeks can already be carried forward one holiday year by agreement.
The aim of this measure is to ensure that key industries are not left short-staffed in the battle against coronavirus.
The WTR also include a provision governing payment in lieu of any untaken annual leave where a worker’s employment terminates. This has now been amended to provide that where a worker’s employment subsequently terminates and, on their termination date, they remain entitled to this coronavirus-related carried-forward annual leave, you must make a payment in lieu to them for the period of that untaken leave. This ensures the worker doesn’t lose out if they still haven’t taken the carried-forward annual leave by the time their employment ends.
Finally, there is a new restriction on your current statutory right to turn down a worker’s request for annual leave. In future, you will only be able to require a worker not to take this carried-forward annual leave on particular days where you have “good reason” to do so.
So that key industries aren’t being left short-staffed during the coronavirus pandemic by workers having to take their unused annual leave entitlement before their holiday year ends, the government has amended the legislation to provide that workers can now carry forward up to four weeks of their unused statutory annual leave where it wasn’t reasonably practicable for them to take it as a result of the effects of coronavirus.
Are your self-employed clients eligible for the 80% grant
The government has confirmed that the self-employed will receive financial support if their business has been affected by coronavirus. Are your clients eligible and how can you help them?
Who can get the grant? Self-employed individuals or members of a partnership are eligible for a grant representing up to 80% of their average profits if they meet the following criteria:
they submitted a tax return for 2018/19
their business traded during 2019/20
their business is continuing to trade, or would be except for coronavirus
they intend to continue trading in 2020/21
they have lost trading/partnership trading profits due to coronavirus
their trading profits are less than £50,000 and represents more than half of their taxable income.
How is the £50,000 threshold applied? First, you should check the trading profits declared on your client’s 2018/19 tax return. If the amount is less than £50,000 and it makes up more than half of their taxable income, then this condition is met. If not, you should check whether their average profits for tax years 2016/17 to 2018/19 is less than £50,000 and accounts for more than half of their average taxable income during this time. If it does, then they meet this requirement.
How much will they be paid? Individuals will get a taxable grant which will be 80% of the average profits from the tax years 2016/17 to 2018/19. If they became self-employed during those years, HMRC will use the average for the years they submitted tax returns for. The maximum amount is £2,500 per month for three months, so to get the full amount your client would need to have average profits of £37,500 per annum.
How do you apply? HMRC will contact your client if they are eligible for the scheme and invite them to apply online using GOV.UK. In the meantime, your clients are likely to need help checking whether they are eligible for this scheme and calculating the amount they should receive.
COVID-19: Company Directors & Shareholders
Last Updated: 27 March 2020
COVID-19: Company Directors & Shareholders: Many small companies are run by just one or two directors and have no other employees. What government financial support is available to director/shareholders during the Coronavirus crisis?
A director or company officer is an employee for PAYE purposes.
A director cannot claim the COVID-19 Grant for the Self Employed by virtue of holding the office of a director.
Although it may be possible for a company to furlough a director under the COVID-19 Job Retention Scheme there are potential issues for small companies to consider.
Company law dictates that director should be engaged under the terms of a service contract with their company.
A service contract does not automatically create an employment contract.
Many director/shareholders are remunerated in the most cost efficient method for their company: a mixture of low salary topped up by dividends.
If the director’s company is adversely affected by COVID-19, the director has the following options, depending on the circumstances:
If the company becomes insolvent: the director must immediately take advice from a qualified insolvency practitioner.
As a director you should not allow the company to continue to trade on whilst you are knowingly insolvent: you potentially become liable for your company’s debts, including amounts due to HMRC.
Furloughing for normally employee type duties:
If, as a director you were on the payroll, engaged under an existing written or verbal employment contract on 28 February 2020, and your services, in performing the duties expected of you as an employee or director are not required due to the affects of the ongoing crisis, the company may furlough you.
Can you furlough a sole director?
In deciding whether to furlough a director in respect of their duties as a company officer, it is assumed that the director will not be furloughed in respect of their duties as an officer of the company. This is because a company cannot operate without its director and all directors have ongoing fiduciary duties to their companies.
We (this website) take a view that most companies will need to have someone on hand, to handle on-going administration, such as post, bookkeeping, tax filings and banking. We see no reason why a company cannot go into a ‘COVID-19 hibernation’ meaning that the director would have no day to day duties during that period but we are uneasy recommending that a sole director is laid off completely. Perhaps part-furloughing is possible and duties in working as a company officer could be agreed at say 1 day per week. Duties as an employee would then by furloughed. This would be evidenced by two contracts: a service contract and an employment contact.
HMRC states that ‘If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.’
HMRC statement is at odds with the idea that a company could go into a period of hibernation. However, it is for the employer to agree the terms of any modification to an employment contact and for the directors to act in the best interests of the company.
Salary or dividends?
There is no scheme in place for the government to provide financial support to shareholders where the amount of their dividend is affected by the COVID-19 crisis.
If a company can no longer afford to pay dividends, it may be insolvent, directors should take appropriate advice.
If the company decides to change the terms of the contract in order to pay a salary instead of a dividend, this must be agreed contractually between the company and its director. As suggested above, we would normally expect to see a service contact which details the duties of a director as a company officer and an employment contract which covers duties as an employee.
Above all it needs to be remembered that a furloughed employee is not allowed to work for the employer during the furlough period. Depending on the type of business, a company director may well need to work in some capacity during even a period of closure of the business.
Additional support for small companies
Employee job retention scheme: if you have other employees
Grant funding: if you have a business premises
Small business rate relief: if you have a business premises
VAT payment deferral
Emergency bank loans
Extension of Companies House filing deadline
COVID-19: Statutory self-employment pay scheme
Last Updated: 26 March 2020
The Coronavirus Bill includes provisions for a proposed scheme of statutory pay for the self-employed. Those measures have been changed: the chancellor announced the following new measures on 26 March 2020:
Support for the self employed:
A taxable grant of 80% of average monthly profits over the past three years.
Capped at £2,500 per month.
For 3 months initially.
Applies to self-employed individuals with trading profits up to £50,000 per year whose majority of income comes from being self-employed.
You must be registered as self employed and have filed a 2019 tax return.
For those who missed the 31 January 2020 return deadline there is now a 4 week period in which to file one.
The scheme is expected to commencing paying out in June 2020.
HMRC will contact registered taxpayers, ask you to fill in a simple online form and the grant will be paid directly into your bank account.
The comparable Employee Job Retention scheme for employees will apply to furloughed workers laid off during the crisis and has a cap of £2,500 per month.
Updated 25 March 2020
The Government has stated that “Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis”
The GOV.UK website https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses states:
(HMRC states that..) You will need to:
designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
(HMRC states that..) HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
Please be aware that we are not provided with any additional information about how this scheme will work (i.e. which employees will be eligible, how much employees should be paid, how business can claim these payments back in the future etc). We only have access to the same information as everybody else, as published on GOV.UK website https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses . You should check that website frequently for updated information provided by the Government.
COVID 19: Statutory self-employment pay scheme (proposed)
Last Updated: 24 March 2020
The Coronavirus Bill includes provisions for a proposed scheme of statutory pay for the self-employed which would if enacted as written, be similar to the Job Retention support scheme already introduced for employees.
The Bill is currently going through the House of Lords with the final stages expected to take place on 25 March 2020. It should be noted that this is a work in progress as amendments to the Bill remain possible during the House of Lords committee stage.
As currently written the Bill includes provision for payments to be made by the government to the self-employed and freelancers so that their net monthly earnings do not fall below the lower of:
80% of their monthly net earnings, averaged over the last three years and
Payments would be capped at £2,917 per month.
The comparable Job Retention scheme for employees will apply to furloughed workers laid off during the crisis and has a cap of £2,500 per month. There are not, as yet, any details available as to exactly how this would work for the self-employed. More details are expected by 25 March.
Last Updated: 17 April 2020
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.
Measures are being announced and this tracker is updated on a daily basis.
The Corona Virus bill gives the government emergency powers to deal with the crisis in any way it needs. The bill includes some SSP measures. Further tax legislation enabling the other measures is being announced as the government devises it.
At a glance
Announcements cover the following topics:
• Coronavirus Job Retention Scheme - updated 16/4
o Guidance for employee-directors - updated 16/4
• Statutory Self-Employment Pay Scheme - updated 14/4
• Deferring Income Tax payments
o Deferring VAT
o Postponement of MTD VAT Digital links
• Statutory Sick Pay (SSP): employees
• IR35: off-payroll working & SSP
• Universal credit: Self-employed and low earners
• Business rates: Expanded Retail Discount for business in:
o Retail, hospitality and leisure sectors
o Nurseries (children)
• Cash grants
o Arts Council funding - added 7/4
• SMEs: Coronavirus Business Interruption Loan Scheme
• Larger business: COVID-19 Corporate Financing Facility - updated 17/4
• Business taxes: Time to Pay
• Hardship Fund: Social housing and homeless
• Statutory Residence Test (SRT) - updated 9/4
• HMRC late payment interest rate cut
• Landlords & Tenants
• Companies: 3 month filing extension
• CGT: soft landing on penalties under new 30 day reporting regime - added16/4
Overview of the measures
Coronavirus Job Retention Scheme
• Employers may claim a grant of up to 80% of past salaries of employees who would have been laid off during this crisis. This is subject to a cap of £2,500 per month.
• Employers must designate affected employees as ‘furloughed workers' and notify the employees of this change.
• To qualify for this scheme: workers should not undertake work while furloughed.
See Employer guide to the Job Retention Scheme
COVID-19: issues for directors and shareholders
• Furloughing does not need not cover director's statutory duties.
• Company law wrongful trading provisions are suspended.
• Salary for furloughing is based on past salary payments made via the payroll.
See COVID-19: Company Directors & Shareholders
Statutory Self-Employment Pay Scheme
The chancellor announced new measures on 26 March 2020. These replace the measures that were included in the Coronavirus Bill.
• A taxable grant of 80% of average monthly taxable profits over the past three years.
• Capped at £2,500 per month.
• Initially available for 3 months. Payable as a lump sum in June 2020 and administered by HMRC.
See Statutory Self-Employment Pay Scheme
Deferring Income Tax payments
Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Self assessment payments on account due on the 31 July 2020 may be deferred.
• Payment will be deferred until the 31 January 2021.
• This is an automatic offer with no applications required.
• No penalties or interest for late payment will be charged in the deferral period.
• Originally this was badged as applying to the self-employed only, the government has since amended their guidance and it now includes all taxpayers due to make self assessment payments on 31 July 2020.
We note that businesses may still make claims to reduce payments on account: if you know that your profits for the current or next tax year are down,.
VAT payments may be deferred for 3 months.
A payment deferral applies from 20 March 2020 to 30 June 2020 for VAT registered business.
This is a deferral of tax and not an exemption: effectively, this is a fast way to provide business with emergency funding.
• This is an automatic offer with no applications required.
• VAT refunds and reclaims will be paid by the government as normal.
• Direct debits need to be cancelled as soon as possible if you wish to take advantage of the deferral.
See COVID-19 VAT deferral
VAT: Making Tax Digital (MTD) Digital links
• HMRC has deferred the start date for the introduction of digital links into MTD for VAT functional compatible software.
• Digital links will now not be required until your first VAT return period starting on or after 1 April 2021.
IR35 & off-payroll working
• HM Treasury have said they intend to postpone the introduction of the Off-payroll working rules to the private sector.
• The extension of the off-payroll working rules was due to commence on 6 April 2020. The start date is now be deferred to 6 April 2021.
See COVID-19: IR35 & Off-payroll working
Statutory Sick Pay (SSP)
• SSP is paid to eligible employees by their employers.
• SSP is not available to those earning below the Lower Earnings Limit of £118 per week (£120 per week from 6 April), see Sick Pay (below).
The government said that it will bring forward legislation to allow small and medium-sized businesses and employers to reclaim SSP paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
• SSP will be payable from day one instead of day four for affected individuals.
o HMRC's SSP calculator does not appear to have been yet updated.
• SMEs may reclaim up to two weeks’ SSP expenditure per eligible employee who has been off work because of COVID-19.
• The rate of SSP, for working a five-day week is £95.85 per week from 6 April 2020 (£94.25 to 5 April 2020).
Key essentials for employers
• An SME is an employer with fewer than 250 employees, The size of an employer will be determined by the number of people they employed as of 28 February 2020.
• Employers should maintain records of staff absences and payments of SSP.
• Employees will not need to provide a GP fit note.
o People who are advised to self-isolate for COVID-19 will soon be able to obtain an alternative to the fit note to cover this by contacting NHS 111, rather than visiting a doctor.
o This can be used by employees where their employers require evidence.
o Further details will be confirmed shortly.
• The eligible period for the scheme commenced on 13 March 2020 as the day after the regulations on the extension of Statutory Sick Pay to those staying at home/self-isolating came into force. Anyone self isolating before that date will only be eligible for SSP from day four.
The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.
IR35: Off-payroll working & SSP
• Following the government's announcement to postpone the introduction of the off-payroll working rules to the private sector, all workers providing their labour via their own Personal Service Companies (PSCs) to private sector end clients, will be entitled, as they are currently in 2019-20 above to claim SSP under the current rules, via their own PSC.
• The extension of the off-payroll working rules was due to commence on 6 April 2020. The start date will now be deferred to 6 April 2021.
See COVID-19: IR35 & Off-payroll working
Self-employed and low earners
• Self-employed individuals and people earning below the Lower Earnings Limit of £118 per week (£120 from 6 April) are not eligible for SSP.
• These individuals can make a claim for Universal Credit or Contributory Employment and Support Allowance
• Special measures apply for the duration of the virus outbreak.
o The requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice. This is to ensure self-employed claimants will receive support.
o People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate.
o A contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25. This may be claimed by eligible people affected by COVID-19 or self-isolating in line with advice from Day one of sickness, rather than Day eight.
• More details are expected from the government on eligibility criteria. We assume that you may self-certify perhaps after receiving advice by ringing NHS 111,
Small business rates scheme
• The existing small business rate relief continues to apply, this provides full relief for any type of businesses using a single property with a rateable value of £12,000 or less.
Business Rates: Expanded Retail Discount
• 100% discount on business rates.
• To apply to occupied retail, leisure and hospitality properties in the year 2020/21.
• There is no rateable value limit on the relief.
See Business Rates Expanded Retail Discount
Support for nursery businesses that pay business rates
• There will be a business rates holiday for nurseries in England for the 2020-21 tax year.
You are eligible for the business rates holiday if:
• Your business is based in England.
• Your property is:
o occupied by providers on Ofsted’s Early Years Register and
o wholly or mainly used for the provision of the Early Years Foundation Stage
• There is no action required, it will apply to your next council tax bill in April 2020.
• You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
Cash grants are available to support businesses during the COVID-19 crisis.
• The Small Business Grant Fund (SBGF) provides grant funding for businesses eligible for Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR).
• A Retail, Hospitality and Leisure Grant (RHLG) is provided to businesses in England. This is in addition to the rates Expanded Retail Discount with a rateable value of less than £51,000.
See Cash grants for small business, retail, hospitality and leisure.
Arts Council funding
Cash grants are available: there is a tight deadline for applications.
• £90 million for National Portfolio Organisations (NPOs).
• £50 million for organisations outside of the National Portfolio.
• £20 million for creative practitioners and cultural workers.
See COVID-19: Arts Council Funding
SMEs: Coronavirus Business Interruption Loan Scheme (CBILS)
• A new Coronavirus Business Interruption Loan Scheme will be delivered by the British Business Bank.
• This is aimed at small and medium-sized businesses to access bank lending and overdrafts. It initially only applied to businesses unable to obtain regular commercial financing but on 3 April was extended to all businesses affected by COVID-19.
• The scheme is covered by the government and will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
• The government will not charge businesses or banks for this guarantee and the Scheme will support loans of up to £5 million in value.
• On 3 April the government announced that lenders must not ask for personal guarantees for loans below £250,000.
o For loans above this level personal guarantees may be required, at the lender’s discretion, but they must exclude the Principal Private Residence and cap recoveries to 20% of the outstanding balance of the loan facility after the proceeds of business assets have been applied to it.
• The scheme will be open for six months with loan terms of up to 3 years.
• Businesses are liable for 100% of the loans they receive, the government are providing a guarantee for 80%.
• Businesses can access the first twelve months of that finance interest-free, as the government will cover the first twelve months of interest payments.
• To be eligible businesses must:
o Be UK based with annual turnover of up to £45 million.
o Generate more than 50% of their turnover from trading activity.
o Have a borrowing proposal which would, were it not for COVID-19, be considered viable by the lender to enable your business to trade out of any short-to-medium term difficulties.
The scheme became available from 23 March 2020. Details of the first set of lenders providing access to the scheme can be found here. Terms are being set by individual lenders.
Businesses are advised to approach their existing lender and to apply through the lender's own website in the first instance. They can then try other lenders if their own lender cannnot help.
Large business: Extension of Business Interruption Loan scheme to larger businesses
On 16 April the government announced that the £500m turnover cap does not apply, this scheme now applies to businesses with a turnover of more than £45m. Additionally, firms with turnover of more than £250 million can borrow up to £50 million from lenders.
On 3 April the government announced that the scheme was being extended to larger businesses with turnover of between £45m and £500m. This is expected to be available by the end of April 2020.
• Loans of up to £50m (previously £25m) can be made under the extended scheme.
• The same criteria and rules apply as for the SME CBILS. Banks, building societies,insurers and reinsurers (but not insurance brokers) and public-sector organisations, including state-funded primary and secondary schools are all excluded from the scheme.
Larger business: COVID-19 Corporate Financing Facility
• The Bank of England has announced a new lending facility for larger businesses to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
• The minimum amount is £1 million. The facility will be available for at least twelve month.
• This will support companies who can show they were in 'sound financial health' prior to the COVID-19 shock, to enable them to continue financing their short-term liabilities.
o 'Sound financial health' means a short-term credit rating of A3/P3/F3/R3 or above, or a long-term rating above BBB-/Baa3/BBB- by at least one of the major credit ratings agencies.
o If firms do not have an existing credit rating from one of the major credit ratings agencies, they or their bank should get in touch with one of the major credit rating agencies to seek one. This should be in a form that can be shared with the Bank of England and HM Treasury, and note that the reason for seeking the rating is so that the firm may use the CCFF.
• The Bank will also support corporate finance markets overall and ease the supply of credit to all firms.
• Businesses should start with their own banks. If they are not able to issue commercial paper there is a list of other banks who do with contact details on the UK Finance website.
Further details, including on how to access this funding will follow in the coming days, and the scheme will be available from the week commencing 23 March.
Business taxes: Time to Pay
• All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
• These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
• It is essential to contact HMRC and make a Time To Pay agreement before the tax debt becomes due.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 024 1222. Phone number updated 26/03/2020.
See COVID-19: Time to Pay
Standard business interruption policies are unlikely to cover a pandemic. You need to check your policy wording and contact your insurer.
Hardship Fund: Social housing and homeless
• The government has announced a new £500 million Hardship Fund so Local Authorities can support economically vulnerable people and households.
• The government expects most of this funding to be used to provide more council tax relief, either through existing Local Council Tax Support schemes or through similar measures.
• The Ministry of Housing, Communities and Local Government will set out more detail on this funding, including allocations, shortly.
Other immediate changes applicable for direct and indirect taxes
Statutory Residence Test (SRT)
• For the purposes of day counting for SRT. If you:
o are quarantined or advised by a health professional to self-isolate in the UK as a result of the virus
o find yourself in a ‘lockdown’ situation as a result of the virus
o are unable to leave the UK due to the closure of international borders
o are asked by your employer to return to the UK temporarily as a result of the virus
HMRC consider that the circumstances are 'exceptional'.
• On 9 April the Chancellor confirmed that time spent by individuals in the UK between 1 March 2020 and 1 June 2020 working on COVID-19 related activities will not count towards the residence test and this will be included in Finance Bill 2020 accordingly.
See COVID-19: Statutory Residence Test
HMRC late payment interest rate cut
HMRC interest rates for late payments will be revised after the Bank of England interest rate reduction to 0.1%.
These changes will come into effect on:
• 30 March 2020 for quarterly instalment payments
• 7 April 2020 for non-quarterly instalments payments
Repayment interest rates remain unchanged. Added 20/3/2020
The rate for underpayments of quarterly instalments is reduced to 1.25% from 23 March 2020. Added 24/03/2020.
See COVID-19: HMRC reduce late payment interest rate
Landlords & Tenants
Private or social accommodation.
• Landlords will not be able to start proceedings to evict tenants for at least a 3 month period.
• Landlords whose tenants are experiencing financial difficulties due to coronavirus will receive a 3 month mortgage payment holiday.
• At the end of this period, landlords and tenants are expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
• Coronavirus Bill provides that no business will be forced out of their premises if they miss a payment in the next 3 months.
• All commercial tenants in England, Wales and Northern Ireland are eligible.
See Press release: Extra protection for businesses with ban on evictions for commercial tenants who miss rent payments
A three month filing extension was annouced from 25 March 2020.
• Companies may apply for a 3-month extension for filing their accounts.
• Those citing issues around COVID-19 will be automatically and immediately granted an extension.
• Companies that have already extended their filing deadline, or shortened their accounting reference period may be ineligible for an extension.
• Applications can be made through a fast-tracked online system.
See Companies House: apply for more time to file
CGT: soft landing on penalties under new 30 day reporting regime
• HMRC have announced that they will not charge any penalties for failure to report Capital Gains on UK residential property within the new 30-day deadline until after July 2020.
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