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The Chancellor, Rishi Sunak, announced the following changes to the Self-Employed Income Support (SEISS) and Coronavirus Job Retention Schemes (CJRS) at the close of business last week.

SEISS changes

In response to lobbying by interested business groups this scheme has been extended for a final three-month period (June – August 2020). The amount being offered is reduced, as compared with support provided for the first quarter (March – May 2020).

The eligibility criteria remains unchanged. In particular, claimants will still need to confirm that during the June to August period their businesses have been adversely affected by the coronavirus outbreak.

The amount that can be claimed is reduced to 70% of eligible earnings (previously 80%) and the maximum grant that can be claimed for the June – August quarter will be capped at £6,570 (previously £7,500).

As before, claimants will have to wait until the final month of the claim period, August 2020, to make a claim. Details on the claims process will be revealed 12 June 2020.

Please note, that self-employed persons claiming for the first claim period (March-May 2020) need to apply for their claim on or before 13 July 2020.

CJRS changes

The CJRS, more commonly described as the furlough scheme, is to close 31 October 2020.

From this date employers will reassume full financial responsibility for their employees.

Between July and October 2020, the support provided will reduce in two fundamental ways:

• Employers can bring-back employees on a part-time basis and
• Employers will need to make incremental contributions to the CJRS support costs.

Part-time working

If employees are invited back to work part-time from 1 July 2020, employers will need to meet the full costs of employing them for this part-time activity.

Furlough grants will still be available from government during the July – October 2020 period, but the amounts that employers can claim will gradually reduce as employers make increasing contributions.

A month by month summary of CJRS changes follows:

June 2020

No changes to government support this month but employers should note that the furlough scheme will close to new entrants on 30 June 2020. Effectively, the final date that employers can furlough staff for the first time will be 10 June 2020.

July 2020

From 1 July 2020, government will only provide support for hours not worked. The full cost of part-time working will have to be met by employers.

For time not worked, the scheme will provide 80% of furloughed costs up to £2,500 cap.

August 2020

From 1 August, employers will have to cover employers’ NIC and pension costs for furloughed workers. For many smaller businesses this will not dramatically increase costs as employers NIC is covered by the NIC Employment Allowance.

For time not worked, the scheme will continue to provide 80% of furloughed wages up to £2,500 cap.

September 2020

From 1 September, employers will, in addition to previous changes, have to start contributing towards the furlough scheme costs. For September 2020, this will amount to 10% of furloughed wage costs for time not worked.

For time not worked, government support will reduce to 70% of furloughed wages up to a revised £2,187.50 cap.

October 2020

From 1 October, employers will pay an increased contribution to the furlough scheme costs. For October 2020, this will amount to 20% of furloughed wage costs for time not worked.

For time not worked, government support will reduce to 60% of furloughed wages up to a revised £1,875 cap.

Unwinding the furlough scheme

From 1 November 2020, employers will be faced with two choices: to bring all furloughed workers back to full-time working or consider redundancies.

This outcome should be considered as soon as possible and if possible by considering quite detailed planning and forecasting considerations. We can help. Please contact us if you are presently claiming under the CJRS and are undecided how to unwind the support from the furlough scheme when it ceases on 31 October.

We are moving closer to the end of the current tax year – 2017-18 – and as we have mentioned in previous posts on this blog, the opportunity to take advantage of perfectly legal tax planning opportunities expires once the year end date passes: 5 April 2018.

To capitalise on these opportunities, we need to know if your circumstances have changed since our last conversation on these matters. The sort of information we need to know includes:

If you are in business

• Are your profits increasing or decreasing as compared to the previous trading period?
• Have you recently committed to, or undertaken a significant investment in new or second-hand plant of other equipment?
• Have you disposed of existing plant or other equipment?
• If you run a property business have you purchased or sold property this year?
• If your property business is intended to benefit from the tax advantages of a Furnished Holiday Lets business, have you checked that your occupancy is on track to qualify for this tax year?
• Have you, or will you be, acquiring or selling a business during 2017-18?

If you are a higher rate tax payer

• Is your income approaching £100,000 for the first time?
• What pension arrangements have you committed to this year?
• Have you made, or will you be making significant charitable contributions?
• Has your marital status changed?
• Have you bought or sold a property in addition to your main residence?
• Have you bought or sold any other assets that are subject to capital gains tax?

Estate planning:

• Has the taxable value of your estate increased this year?
• Do you need to reconsider your Will due to family changes?
• Do you need to reconsider any existing trust arrangements?
• Have you made any significant gifts? Should you provide for the possible IHT consequences?
• Have you taken advantage of the various IHT reliefs available for 2017-18?

Essentially, we need to know what has changed, or is likely to change before 5 April 2018, so that we can assess your options to mitigate any tax consequences. Occasionally, we can also advise on a change in your future intentions to give you a more effective tax result. The purpose of this post is to invite you to keep in touch; if we know what your intentions are, we can advise accordingly.

Last week we discussed in this blog, how to recover VAT paid prior to registering for VAT.

This week we are going to sketch out the reverse position: how to reclaim VAT after you have deregistered.

According to HMRC, you can make a claim for relief from VAT charged to you on certain services (not goods) supplied after your registration was cancelled and when you were no longer a registered person. You can only claim relief from VAT on those services which, although supplied to you after your registration was cancelled, related to your taxable activities prior to deregistration.

The most usual costs you could claim for are accountants’ and solicitors’ services where the supply could not be made to you until after your registration was cancelled.

There is no relief from VAT on goods supplied to you after the date of cancellation or on services that are not attributable to taxable supplies.

When you claim relief from VAT, you must produce the relevant invoice(s) (originals only) and satisfy HMRC that the services supplied to you were for the purpose of the business carried on by you before the date on which your registration was cancelled. If, when you were registered, your input tax claims were restricted because you had non-business activities, you must apply the same restriction to this claim. You may not claim any relief on VAT incurred for exempt activities.

The deadline for reclaiming VAT under this option is no more than four years after the date it was incurred.

You can also reclaim VAT paid on your invoices issued to customers before deregistration, that subsequently became bad debts after deregistration – to qualify, you will need to have accounted for VAT on the supplies and can meet all the requirements of the bad debt relief scheme.

If you feel that you may be eligible to make a claim under these provisions, please call, we would be delighted to help.

The following change in Companies House (CH) filing requirements will apply from the end of June 2016. The following post sets out the changes that will apply:

From 30 June 2016, the annual return is being replaced. Instead, you’ll now file a confirmation statement at least once a year. You need to check and confirm the company information CH hold for you and let them know if there are any changes.

To complete the confirmation statement, you will need to:

• check the information CH hold on your registered office, directors and location of registers – if there’s been any changes, you’ll need to complete a separate form before filing your confirmation statement
• check and if necessary update your shareholder information, statement of capital and your standard industry classification (SIC code)
• check and confirm your record is up to date
• pay the £13 fee to file online or £40 by paper

You can update your record as many times as you need to, but you’ll only be charged once a year. For most companies, this will also be the first time you will notify CH of your people with significant control (PSC). New companies will provide this information on their incorporation documents.

CH will send you an email alert or a reminder letter to your company’s registered office when your confirmation statement is due.

The due date is usually a year after the incorporation of your company or the date you filed your last annual return. You can file your confirmation statement up to 14 days after the due date.

If your made up date is between now and 30 June 2016, you’ll still need to file an annual return. For example, if your made up date is 20 June 2016, you’ll have until 18 July 2016 to file your annual return (due to the annual return’s 28-day grace period).

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