I hope you had a Good Easter and managed to take your mind off the situation we are in just a little bit.
There have been some tweaks to various schemes available that I would like to share with you.
Our clients are now seeing this rolling in – if you haven’t applied then, please do so ASAP. Income from these Grants should be recognised as Other Revenue in your accounts with No VAT – it’s not vatable but will be taxable.
Here is my guide to the grant schemes available: Our Guide To The Coronavirus Business Grant Scheme
Coronavirus Job Retention Scheme (CJRS) portal
HMRC announced plans this week to open the online CJRS portal:
- The scheme is due to go live on 20th April, with first payments being made 10 days later
- Future claims will be paid within four to six days
- The online CJRS service is now undergoing beta testing with a group of selected employers
- Applicants will access the system using their current government gateway login
The good news is that Agents will be able to access the portal for their clients so, if we run your payroll for you, we will be able to file your claims on your behalf.
Please be patient with us – this whole situation has meant an increased pressure on Payroll across the board. At the best of times, we cannot offer a same day payroll service, and these aren’t the best of times! Payrolls are taking much longer than normal, so please bear that in mind when providing your payroll info.
CJRS furlough cut-off date
When the scheme was first announced, individuals had to be employed by the firm furloughing them on 28 February, but the Government has extended the eligibility date to 19 March – the day before the scheme was announced.
However, there’s a technical caveat here – you need to have made a payroll submission about your new employee to HMRC on or before 19 March. Therefore, anyone paid monthly will more than likely not be reported to HMRC until after this date.
Why the 19th?
This is the date that the government announced the scheme and they obviously feared that millions of people rushed to add employees after this date.
Any monthly paid employees who started after 28th February are still not eligible for the scheme.
Coronavirus Business Interruption Loan (CBIL)
The pace of these loans is still low but is increasing. UK Finance said lenders had received 28,461 applications from businesses to the scheme, with 6,016 approved to date totalling £1.115bn in value.
Banks are still woefully slow in responding and asking a lot of business owners to get the loan approved.
We are hoping for further changes here to ease this funding.
Read our guide to the CBIL scheme here: Our Guide to the Business Interruption Loan Scheme
Business Interruption Insurance Claims
Many of our clients are finding out that they are not insured for this pandemic, even though they have business interruption clauses.
In a letter to the heads of insurance firms, the Financial Conduct Authority today said: ‘Based on our conversations with the industry to date, our estimate is that most policies have basic cover, do not cover pandemics and therefore would have no obligation to pay out in relation to the pandemic.’
Please read your policy carefully and do claim if you can. Insurance companies are reluctant to pay out but have been warned by the FCA that they must do more.
Tax Planning with shares
This crisis has seen a considerable drop in the value of shares; if you hold shares with any sort of value and were considering gifting these to a family member now might be a good time.
For example, let’s say you held shares worth £50,000 before the crash, but are now worth £25,000 and you gave them to your child – they would now only incur CGT on the gain up the current value above the annual £12,000 CGT allowance. If you thought these shares will eventually bounce back, then now would be a good time to do this.
This gift would also be a potentially exempt transfer for IHT with the value locked in at £25,000 if the giftor doesn’t survive 7 years.
The difficulty is knowing when the best time is to do this, in case the share value drops further.
Bed & Spousing
This is where one spouse sells equities to crystallise a loss (to be set off against future gains) and the other buys them back. HMRC could always challenge this by using their general anti-tax avoidance legislation. However, you could sell Barclays and buy Lloyds in order to maintain a portfolio’s exposure to a sector.
The 30-Day Rule
If you wish to repurchase an investment that you have recently sold, you must wait 30 days between the two transactions in order for you to utilise your CGT exemption, or create a loss to offset against other gains realised within the same tax year. If 30 days haven’t passed, the investment retains the original base price rather than resetting to the new purchase price.
Build your tax shelter
You can currently put £20,000 per annum into a Stocks and Shares ISA. If you want to retain existing shareholdings but would prefer them to be in the tax-efficient ISA wrapper, you can ‘Bed and ISA’ the holding(s). A ‘Bed and ISA’ transaction allows you to ‘transfer’ shares that you already own from outside a tax shelter into an ISA. Under HMRC rules, existing shares must be sold and repurchased using the funds available within your ISA.
Please seek independent financial advice before making changes to your share portfolio.
Our New Normal
Just a reassurance that we are still working to help your business get through this crisis. We have been helping with Grant Applications, Loan Applications, answering queries and doing lots of Accounts, Bookkeeping and Payroll.
I wanted to give you an insight into how we are working. We are working from home as much as possible – with the exception of Jonathan who much prefers the peace and quiet of the office.
We are still receiving books and records in the office – just please call before you come over.
There are very few upsides to this crisis, but the biggest ones are the car park near the office is empty and the tea round is considerably shorter!
I, like all of you, am looking forward to getting back to normality.