Monthly Archives: May 2021

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Further info on HMRC performance

Further to our bulletin last week to provide some further points about the poor performance levels of HMRC and how it affects us in trying to deal with your affairs.

In March, there was a mass data breach where thousands of accountants received Late Filing Penalty Notices intended for clients of other accountants.

Our priority access line as tax agents was withdrawn by HMRC which means that we have to wait up to 40 minutes to an hour when we need HMRC’s assistance but very often the calls are cut completely before they are answered.

There are some significant issues with VAT at the moment as well. In the past year, we have ourselves received a late filing penalty for not paying VAT when we were allowed to defer the payment. HMRC eventually apologised.

We are now trying to arrange paying for deferred VAT by Direct Debit and have separate communications from VAT showing how much we owe and another saying we owe nothing at all. Amounts we have paid are not correctly recorded on HMRC’s own ledger.

It begs the question as to the state of the public finances if even basic transactions are not recorded properly and different information about the same transaction is recorded in different places.

The moral of the tale is, if you receive information from HMRC, please do not necessarily regard it as being accurate. Please contact us and we will do our best, within the constraints outlined above, to solve the problem.

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Good news – Corporation tax loss relief improved

As a result of the pandemic, companies incurring losses for tax purposes for accounting periods ending between 1 April 2020 and 31 March 2022 can now carry back these losses for up to three years rather than one year.

HMRC have advised that claims below £200,000 may be made outside of a corporation tax return via letter. Claims greater than £200,000 need to be made via the appropriate corporation tax return.

For all those clients that have losses, we will be making sure that your position is optimised and welcome this extension to the loss relief carry back period.

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SEISS Grant 4

HMRC opened their portal for the self employed to claim their fourth grant at the end of the April 2021.  Some sole traders who were ineligible for the previous three grant payments can now make a claim if they started their self-employment after 6 April 2019. There is still no relief of course for people who operate through limited companies.

If you have not yet claimed,  this is a reminder that you must apply by the 01 June 2021.

HMRC Guidance states to be eligible for the fourth grant you must be a self-employed individual or a member of a partnership. You cannot claim the grant if you trade through a limited company or a trust.

You must have traded in both tax years:

  • 2019 to 2020 and submitted your tax return on or before 2 March 2021
  • 2020 to 2021

You must either:

  • be currently trading but are impacted by reduced demand due to coronavirus
  • have been trading but are temporarily unable to do so due to coronavirus

You must also declare that you:

  • intend to continue to trade
  • reasonably believe there will be a significant reduction in your trading profits

If you require any assistance with a grant application then please do not hesitate to contact us.

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We’ve got your back!

No one can deny that 2020 has brought everybody huge challenges on many fronts. However, the service provided by the Tax Authorities and also the  major banks is so woeful that it is not acceptable for them to continue to hide behind the coronavirus crisis.

As a result, so many members of our professional body, the Institute of Chartered Accountants in England and Wales have  reported numerous service issues and delays, the Institute has now made representations to the Tax Authorities to advise amongst other matters that taxpayers have been waiting up to three months just for a reference number to be issued for self-employment registrations, five months for VAT registrations to be completed, six months for Research & Development Relief Claims to be processed and more than six months for Corporation Tax losses to be actioned.

We have several cases ourselves where we have appealed against incorrectly issued Corporation Tax Penalty Notices which are taking up to five months to be dealt with. In the meantime, HMRC are instructing bailiffs to collect the penalties which were not due on the first place.

Whilst appreciating the pressure on HMRC’s resources and its achievement in delivering support in many cases, the ICAEW has pressed for an improvement of service standards.

We hope that HMRC will listen to these representations but in the meantime we would urge all clients to expect continued delays with all dealings with HMRC and to exercise as much patience as possible when waiting for matters to be dealt with. We are doing what we can to bring these matters to the attention of the authorities.

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Coronavirus Job Retention Scheme (furlough scheme)

The Coronavirus Job Retention Scheme (furlough scheme) has been extended until 30 September 2021 and the level of grant available to employers under the scheme will stay the same until 30 June 2021.

1. Changes to the level of grant from 1 July 2021

From 1 July 2021, the level of grant will be reduced and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

The table below shows the level of government contribution available in the coming months, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.

Wage caps are proportional to the hours not worked.

Government contribution: wages for hours not worked80% up to £2,50080% up to £2,50070% up to £2,187.5060% up to £1,87560% up to £1,875
Employer contribution: employer National Insurance contributions and pension contributionsYesYesYesYesYes
Employer contribution wages for hours not workedNoNo10% up to £312.5020% up to £62520% up to £625
For hours not worked employee receives80% up to £2,500 per month80% up to £2,500 per month80% up to £2,500 per month80% up to £2,500 per month80% up to £2,500 per month

You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense.

In other words, if you have started the long furlough from July onwards, the employer is going to have to meet some of the costs as the amount paid by the government will reduce.

If you have any queries about how you might be affected or how the scheme will operate from 1 July onwards, please do not hesitate to contact us.

Contact Us

The Martlet Partnership LLP
Martlet House
E1 Yeoman Gate
Yeoman Way
West Sussex
BN13 3QZ

Tel.: +44 (0) 1903 600555
Fax.: +44 (0) 1903 600828