Welcome to our round up of the latest business and Covid-19 news for clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you through these tough times.
Latest economic news
UK gross domestic product (GDP) is estimated to have grown by 2.3% in April 2021, the fastest monthly growth since July 2020, as government restrictions affecting economic activity continued to ease. The service sector grew by 3.4% in April 2021, with consumer-facing services re-opening in line with the easing of coronavirus restrictions and more pupils returning to onsite lessons. April’s GDP remains 3.7% below the pre-pandemic levels seen in February 2020, however it is now 1.2% above its initial recovery peak in October 2020.
The latest Office for National statistics Economic activity and social change report, Economic activity and social change in the UK, real-time indicators – Office for National Statistics (ons.gov.uk) shows that
- In the week to Monday 31 May 2021, the seven-day average estimate of UK seated diners was at 173% of its level in the same week of 2019, an increase of 41 percentage points from the previous week; this follows the reopening of indoor dining across all four home nations in May and continues the rebound in seated diner estimates observed since the first reopening of pubs and restaurants in April.
- The percentage of businesses currently trading has increased to 87% in late May (17 to 30 May 2021), the highest proportion since comparable estimates began in June 2020, with a further 3% of businesses intending to restart trading in the next two weeks.
- In the week to 29 May 2021, UK retail footfall saw a weekly increase of 7% and was at 73% of its level in the equivalent week of 2019; footfall at retail parks remained strongest as a proportion of its level in the same week of 2019 when compared with other retail locations at 92%, whereas the equivalent figures for shopping centres and high streets were 68% and 67%, respectively.
Reminder – P11D Forms due by 6 July
Despite the coronavirus lockdowns, HMRC still expect P11D forms reporting expenses and benefits to be submitted by the normal 6 July deadline. Employers need to submit a P11D form to HMRC for each employee you’ve provided with expenses or benefits.
Employers also need to submit a P11D(b) form if:
- You have submitted any P11D forms
- You have paid employees’ expenses or benefits through your payroll
- HMRC have asked you to – either by sending you a form or an email
Form P11D(b) tells HMRC how much Class 1A National Insurance (at 13.8%) you need to pay on all the expenses and benefits you’ve provided. The National Insurance on benefits is due by 19 July.
If HMRC have asked you to submit a P11D(b), you can tell them you do not owe Class 1A National Insurance by completing a declaration.
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, although HMRC would expect internal controls to be in place.
Note also that trivial benefits of no more than £50 provided to employees need not be reported. This typically covers gifts to employees at Christmas and on their birthdays.
Paying tax on benefits through your payroll
Employers can deduct and pay tax on most employee expenses through your payroll (sometimes called ‘payrolling’) as long as you have registered with HMRC before the start of the tax year (6 April). This can be particularly beneficial in the first year that a company car is provided to an employee as it means that they won’t get a big tax bill at the end of the year.
Employers do not need to submit a P11D form for an employee if you’re paying tax on all their benefits through your payroll. However, they still need to submit a P11D(b) form so they can pay any Class 1A National Insurance they owe.
Please contact us if you require any assistance.
Taxable benefit charge – returning office equipment
Employer provided equipment
If you have supplied your employees with office equipment to allow them to work from home, without a transfer of ownership, there is no tax charge when they return the equipment back to you. If you transfer the ownership of the equipment to the employee at any stage of their employment, a benefit charge generally arises on the market value of the equipment at the time of the transfer less any amount made good by the employee. There is an alternative method for calculating the chargeable benefit when equipment is transferred, more information on this method can be found in Employment Income Manual EIM21650.
Employer reimbursed equipment
If your employee has agreed to purchase their own home office equipment for use whilst working at home as a result of coronavirus and you reimburse the exact expense, unless you have specified to your employee that they must transfer ownership to you, the ownership of the equipment rests with your employee.
There is no benefit charge on the reimbursement. There is also no benefit charge if you allow your employee to keep the equipment as it is something that they already own. Further information and to check which expenses are taxable if your employee works from home due to coronavirus is available.
Please contact us if you need any help in this area.
New tool launched to support organisations achieve Cyber Essentials certification
The Cyber Essentials Readiness Tool, which has been developed by IASME on behalf of the National Cyber Security Centre – a part of Government Communication Head Quarters – asks organisations a series of questions related to the main Cyber Essentials criteria to help prepare them for certification.
Through the Cyber Essentials scheme, businesses can learn how to defend themselves by securing internet connections and devices, controlling access to data, and understanding how to protect against malware.
Scams warning for tax credits customers
Tax credits customers should be vigilant and alert to potential scams, HM Revenue and Customs (HMRC) has warned.
Anyone doing their tax credits renewal who has received a tax or benefits scam email, or text might be tricked into thinking it was from HMRC and share their personal details with criminals, or even transfer money for a bogus overpayment.
Many scams mimic government messages to appear authentic and reassuring. HMRC is a familiar brand, which criminals abuse to add credibility to their scams.
If customers cannot verify the identity of a caller, HMRC recommends that you do not speak to them. Customers can check GOV.UK for HMRC’s scams checklist to find out how to report tax scams and for information on how to recognise genuine HMRC contact.
Customers have until 31 July 2021 to notify HMRC of any change in circumstances that could affect their claims. If customers haven’t received their renewal pack by 4 June 2021, they will need to contact HMRC.
Small Biz 100 2021
This year Small Business Saturday is once again highlighting 100 small businesses, one a day for the 100 days leading up to Small Business Saturday 4 December 2021.
For the last 8 years, the 100 have not only received exposure on Small Business Saturday’s social media channels and in the local and national press, but also joined the Small Business Saturday team in London at receptions in both Downing Street and The Treasury Drum with the Chancellor of the Exchequer. Applications close on 30 June 2021.
For further information please visit the Small Business Saturday website.
Covid 19 Government Support News
Below is our weekly roundup of changes to government support information generally and for businesses, employers and the self-employed.
Changes to the Coronavirus Job Retention Scheme (CJRS) from July
The UK Government will continue to pay 80% of your furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.
In July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
You will need to pay the 10% difference in July, and 20% in August and September, so that you continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
For the hours not worked you can choose to top up your employees’ wages above the 80% level or cap for each month if you wish, at your own expense.
You can claim before, during or after you process your payroll. If you can, it is best to make a claim once you are sure of the exact number of hours your employees worked, so you don’t have to amend your claim later.
Conditions of claiming CJRS grants
You must pay the associated employee tax and National Insurance contributions to HMRC. This is a condition of claiming the grant, and not doing so will mean you will need to repay the whole of the CJRS grant and you may not be able to claim future CJRS grants.
Flexibly furloughing employees
If your business continues to be affected by coronavirus, you do not need to place all your employees on full furlough. You can also use the CJRS flexibly if you bring your employees back to work for some of their usual hours. You can claim a portion of your employee’s usual wage costs for the hours spent on furlough only.
As a reminder, you must not claim under the CJRS for any hours that your employees work. HMRC are carrying out compliance checks to identify error and fraud in claims.
Claims for furlough days in May 2021 must be made by 14 June 2021.
If you need help in planning ahead for future claim periods, please contact us.
If you are making your own CJRS claims the template with the details of the employees, you are claiming for (on or after 27 May 2021) has been updated by HMRC.
VAT Deferral Reminder– join online by 21 June
The VAT deferral new payment scheme is open for all businesses who deferred paying VAT due between 20 March and 30 June 2020 and were unable to pay in full by 31 March 2021.
21 June is the last day you can join this scheme. If you join by this date you can apply to spread these payments across up to eight instalments.
You can join online here: Pay VAT deferred due to coronavirus (COVID-19) – GOV.UK (www.gov.uk)
If you have deferred paying VAT, you may be charged a 5% penalty and/or interest if you do not join the VAT deferral new payment scheme by the deadline of 21 June, pay in full by 30 June, or get in touch with HMRC to make an alternative arrangement to pay by 30 June 2021.
Industrial Energy Transformation Fund
The UK Government’s Department for Business Energy and Industrial Strategy (BEIS) recently announced the first tranche of winners from the Industrial Energy Transformation Fund (IETF) Phase 1: Summer 2020 competition. The full list of projects and winners receiving the £16.5 million in IETF funding can be seen here.
The second tranche of winners from the Phase 1 Summer 2020 competition will be announced later this year.
Industrial Energy Transformation Fund (IETF) Phase 1: Spring 2021
The IETF Phase 1: Spring 2021 competition is now open and runs to 14 July. Up to £40 million of grant funding is available for energy efficiency projects and studies. Guidance on how to apply is available here.
IETF stakeholder clinics
BEIS and Innovate UK are hosting a series of stakeholder clinics throughout the competition window to help and support businesses interested in applying for IETF funding.
The stakeholder clinics help businesses planning on bidding for IETF funding by enabling them to speak directly to BEIS and Innovate UK and ask questions around potential bids, competition scope, eligibility criteria, how to apply for funding, and IETF support and information services available.
The next stakeholder clinic takes place on 29 June 2021. You can register to attend here.