Why do we recommend Xero?

We at Premier Tax Solutions recommend the cloud accounting software Xero, but what is cloud accounting? Cloud accounting allows you to keep your business books online, which includes records of income and expenses, as well as assets and liabilities. All your information is encrypted so only people with the login can view the data. All you need to do is subscribe and move all your books to the cloud. From then on you can access your accounts from any web browser, or from an app on your phone.

Running your business accounts online with Xero has many advantages:

  • Data about your income and expenses can flow straight from your bank to your Xero account meaning you do not need to spend hours typing transactions out
  • You can see your current financial position at any time provided your book keeping is up to date
  • Multi-user access makes it easier for you to collaborate online with your team and accountant
  • Because it’s online there is no installing or updating, and all your data is backed up automatically
  • You can set up a dashboard to show important financial information e.g. who owes you money, what bills are due, and how your cash flow is looking

If you are thinking of moving to Xero or are a new start up looking to get straight onto Xero get in touch on 01782 479699

What If I Cannot Afford To Pay My Self Assessment Tax Bill?

If it is you are struggling to make a tax payment you should always seek help earlier instead of burying your head as it will not just go away. For those of you struggling to pay the tax due this week a time to pay arrangement may be an option.

HMRC offer a time to pay arrangement which is based on your specific financial circumstances and can cover all outstanding amounts overdue including penalties and interest. They make sure to look at what you can afford and then use that to work out how much time you will need to pay off your tax bill.

HMRC usually expects you to pay no more than 50% of your disposable income but can be higher if you have a very high disposable income. There is no upper limit on how much time you will have to pay.

It is designed to be flexible and is not a fixed, formal contract. It can be altered overtime, so it can be shortened if your earnings rise or you receive a windfall. More importantly it can also be lengthened should your essential expenses increase, or income decrease.

For Self-Assessment, you may be able to set up a payment plan online. This would allow you to pay your Self-Assessment tax bill in instalments without contacting HMRC.

You can set up a payment plan to spread the cost of your Self-Assessment bill if:

  • You owe £30,000 or less
  • You do not have any other payment plans or debts with HMRC
  • Your tax returns are up to date
  • It’s less than 60 days before the payment deadline

For any extra information on time to pay arrangements or to set up a time to play arrangement online visit the gov.uk guidance here.

What Support Is Available For The National Lockdown 5 November 2020?

Following on from the government announcements we thought we would reach out about what support is available so far, as we go into the national lockdown on Thursday:

Coronavirus Job Retention Scheme

  • CJRS (furlough) scheme extended to December paying 80% of employees wages up to £2,500.
  • Employers will be required to cover national insurance and pension contributions.
  • Full time and flexible furlough will continue to be available.
  • Neither the employer nor the employee needs to have previously accessed the Furlough scheme.
  • All employees on the employer’s PAYE payroll by 23:59 30 October 2020 will be eligible.

Mortgage payment holidays extended

Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

Business grants available

Businesses required to close in England due to local or national restrictions will be eligible for the following through their local authority:

– For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;

– For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;

– For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

 

Self Employed Income Support Scheme

  • Claims window being brought forward from 14 December to 30 November which will cover the period November to January
  • For November it is worth 80% of average trading profits and for December it is worth 40% of average trading profits meaning the total level of the third grant is 55 per cent of trading profits. The maximum grant will increase to £5,160.
  • Claims must be done by individuals, accountants cannot do these

To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
  • are currently actively trading but are impacted by reduced demand due to coronavirus
  • were previously trading but are temporarily unable to do so due to coronavirus

 

Bounceback Loans & CBILS

 

Self Assessment Tax Deferrals

The July 2020 payment on account that was deferred to 31 January 2021 and amounts due by 31 January 2021 can be payable over a further 12 month period under a time to pay arrangement. This can be set up online by individuals here: https://www.gov.uk/difficulties-paying-hmrc

 

VAT Deferrals

Businesses that deferred their VAT during the period 20 March to 30 June 2020 to 31 March 2021 can now make smaller payments interest free up to 31 March 2022. You have to opt into this, you will find more info here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

 

We hope that you find this round up useful. Things are changing daily so please always check the up to date guidance.

Self-Employment Income Support Scheme Grant Extension

Self-Employment Income Support Scheme Grant Extension

Due to the ongoing impact that Covid-19 has had on the self-employed the UK government has taken action to provide support. The Self-Employment Income Support Scheme (SEISS) Grant Extension will provide critical support to the self-employed in the form of two grants, which will both be available for 2 three month periods, the first covering November 2020 to January 2021 and the second covering February 2021 to April 2021.

Who can claim?

To be eligible for the extension self-employed individuals, including members of partnerships, must:

  • have previously been eligible for the SEISS first and second grant (but don’t have to have claimed the previous grant)
  • declare they intend to continue trade and either:
    • are currently trading but are impacted by reduced demand due to Covid-19
    • were previously trading but temporarily unable to do so due to Covid-19

What does it cover?

This extension lasts for six months, November 2020 to April 2021. The grants will be paid in two lump sums each covering a three-month period. The first grant covers the period from 1 November 2020 until 31 January 2021. The government will provide a taxable grant covering 40% of average monthly trading profits, paid in a single instalment covering three months’ worth of profits, but capped at £3,750 in total.

The government are providing the same level of support for the self-employed as is being provided for employees through the Job Support Scheme.

The second grant covers the period from 1 February 2021 until 30 April 2021. The government will review the level of the second grant and set this in due course. Both grants are taxable income and are subject to National Insurance contributions.

HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course. Please see the SEISS page for latest updates.

What Is The Job Support Scheme?

The JSS (Job Support Scheme) has been put in place to aid those employers facing lower demand over the winter months due to Covid-19 and who will no longer be able to use the Coronavirus Job Retention Scheme. The JSS will apply from 1 November 2020 to 30 April 2021.

Under this scheme the state will contribute towards employees’ wages who are working fewer hours than normal. Employers will continue to pay staff wages for the hours they work, but for hours not worked the government and the employer will pay one third of this each. This means that employees who must work shorter hours will still be paid two thirds of the hours they don’t work. Employees must be working at least one third of their usual hours and will receive at least 77% of their normal pay (after three months the government will consider increasing the minimum hour threshold).

Government contributions will be capped at £697.92 per month and employers will be reimbursed in arrears for the government contribution. The grant will not cover Class 1 employer NICs or pension contributions which will remain payable by the employer.

 

Who qualifies for the scheme?

Employees must be on an employer’s PAYE payroll on or before 23 September 2020, however employees can cycle on and off the scheme and do not have to work the same pattern each month. There will be no requirement that they were furloughed under the CJRS. All small and medium businesses are eligible, however larger businesses will need to demonstrate they have been adversely affected by Covid-19.

Under the Job Support Scheme Employees cannot be made redundant or given notice of redundancy during the period for which their employer is claiming the JSS grant for them.

 

For more information please see the Job Support Scheme Factsheet 

Self Employed Income Support Scheme Extended

The original Self Employed Income Support Scheme (SEISS) covered March – May and most people received their payments during May. Individuals can continue to apply for the first SEISS grant until 13 July. An extension has now been announced where the self employed can apply for a further grant in August if they have been adversely affected by the coronavirus crisis. The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

If you’re eligible for the second and final grant, and your business has been adversely affected on or after 14 July 2020 you’ll be able to make a claim in August 2020. You can claim for the second grant even if you did not make a claim for the first grant.

Recent guidance released goes through how different scenarios can affect whether you should claim the grants.

For example if you worked on a building site and it closed during March & April so you couldn’t work but then went back to work as normal from May you would be adversely affected for the first Grant period but not for the second so should not claim the second grant.

Please read the guidance here before making your claims: https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme?fbclid=IwAR0UuJ_JRC4Q6L1qnow6GFSCnvNH8VrXvKdJoLsnYzC0eMMu5VbqmmTkth0#adversely-affected-examples

It is likely that HMRC will seek to examine claims down the line so it is important that when you make the claim you are eligible.

 

 

Am I Eligible For The Self Employed Income Support Grant?

HMRC have released an eligibility checker today which you can use to check if you are eligible to claim the grant in June. Some people are able to put applications in from as early as 13th May 2020. In order to check eligibility please ensure you have to hand your UTR and National Insurance Number and click on the following link: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#eligible

How to create the perfect business plan in 10 steps

Follow these ten steps to create a clear plan you can share with your Accountant.

Every business needs a plan, and creating the right one can sometimes feel like a challenge. But the benefits are definitely worth it.

A business plan helps you get your ducks in a row and also lets us know how we can best advise you.

So, how do you create a good business plan?

These ten steps will help you get started:

1. Create an executive summary

2. Define your customers

3. Evaluate the target audience

4. Identify your opportunities

5. Understand the competition

6. Build a simple financial plan

7. Include an outline marketing plan

8. Plan your operations

9. Get the right people, advice from your Accountant and maybe getting a mentor would be great

10. Keep it simple, it doesn’t need to be over complicated

Remember, clarifying your ideas by writing them down gives them substance and structure. Feedback from others is also crucial in business planning, and advice from the right people is the key to success.

Read more on Xero’s ten steps to a perfect business plan and start planning your business around your strengths.

What sort of accountants services do I need if I’m a Sole Trader?

We offer the following services for sole traders:

  • Accounts preparation
  • Self assessment tax return preparation
  • Payroll for employees
  • VAT returns preparation
  • CIS contractor returns
  • CIS subcontractor statements
  • Help with HMRC enquiries
  • Tax investigations insurance
  • PIID preparation for employees
  • Tax efficiency reviews
  • Child benefit higher income cha

What is subsistence?

Subsistence is the accounting term used to describe food & drink and other incidental costs of travel such as accommodation. It is an allowable deduction when incurred by an employee or office holder in conjunction with a qualifying business journey such as business travel & overnight stays.

All claims must be backed up by receipts, unless you have agreed a scale rate system with HMRC.

From April 2019 there are some changes due in the area of subsistence for employees which we will take a look at along with some of the questions we most frequently get asked. Please note that the rule for employees are different than the self employed and so people can fall foul of this.

What is changing on 6th April 2019:

  • The employer will have to have a system in place to check the employee has undertaken a qualifying journey.
  • Employers will no longer need to check receipts where HMRC scale rates are used both in terms of UK and overseas scale rates

The Finance Act 2019 will put all of HMRC’s benchmark scale rates on a statutory footing.

Can I reimburse my employee for their lunch?

When they are travelling on business, entertaining customers, or when lunch is provided at a conference or meeting to ensure continuity of work it is ok to do so. For example if you have a training day and order pizza in for the staff then that would be deductible as it will ensure continuity of work.

How much can I reimburse for subsistence?

There is no upper limit however an employer can only reimburse expenses if there are actual expenses incurred. It can reimburse round sum amounts using scale rate payments

Can I claim VAT back on subsistence?

Yes provided the employee gives you a VAT receipt

If you are unsure about subsistence payments and would like more advice please call us on 01782 479699.