Category Archives: The Self Employment Income Support Scheme

COVID-19: Accounting for grants and loans

COVID-19: Accounting for grants and loans

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COVID-19: Befuddled? We are tax agents

COVID-19: Befuddled? We are tax agents who can guide you through the Coronavirus Job Retention Scheme (CJRS) and Self Employed Income Support grants.

HMRC has recently reached out to Canalitix Accountants and other UK tax agents to assist businesses with their claims for furloughed staff wages under CJRS.

The CJRS dedicated online claims system is expected to go live on 20 April 2020 and we would welcome the opportunity to assist businesses including company directors and contractors on PAYE with their claims.

HMRC Step by Step Guide for submitting CJRS claims

COVID-19: Befuddled? We are tax agents

Payroll bureau and HMRC file only agents

Payroll bureau and HMRC file only agents cannot access the CJRS dedicated online services.

However, file only agents can assist business with their CJRS claims because they hold information on furloughed staff, such as national insurance (NI) number, salary, employer’s NI and pension contributions.

HMRC Money Laundering Regulations

Money laundering supervision for accountancy service providers

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RECAP – Coronavirus Job Retention Scheme

Applying for % of furloughed staff wages

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COVID-19: HMRC Job Retention Scheme Video+

The COVID-19: HMRC Job Retention Scheme Video by HMRC is very comprehensive and worth listening to.

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COVID-19: HMRC Job Retention Scheme Video+

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COVID-19: The forgotten self-employed

COVID-19: The forgotten self-employed are individuals who have started their self-employment businesses since 5th April 2019 and, as a consequence are excluded from claiming grants through the self-employment Income Support Scheme.

Being self-employed is like walking a tightrope and trying to balance the demands of creditors, staff and bank overdrafts on the one hand while using the other hand to extract payments from customers while driving new sales. This is on top of satisfying your own physiological needs. Even without a pandemic, walking the walk can be hazardous with the slightest jolt capable of disrupting the balancing act.

Then along comes the news that the government’s coronavirus self-employment Income support scheme excludes individuals who started their businesses as sole traders and/or partnerships after 5th April 2019.

Who can claim a grant for Self-Employment Income Support?

The Self-Employment Income Support Scheme provides a taxable grant worth 80% of self employment trading profits up to a maximum of £2,500 per month for the next 3 months starting 1 March 2020 with the possibility of being extended.

COVID-19: The forgotten self-employed

To be eligible to apply, the application must be a self-employed individual or a member of a partnership satisfying the following conditions:

  • have submitted a Self Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when they apply, or would have been except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading profits due to COVID-19
  • self-employed trading profits must be less than £50,000
  • more than half of the individual’s income must come from self-employment

Further, the averaging process will only apply to those years between 2016 and 2019 where a Self Assessment tax return has been submitted to HMRC.

Allowance for late submission of 2018/19 SA tax return

HMRC has agreed to allow late submissions of Income Tax return for the tax year 2018-19 by 23 April 2020. However, late returns will be risk assessed.

Why not allow the early submission of 2019/20 SA tax return

Considering the 2019/20 tax year comes to an end on 5th April 2020 and the grants are not going to be paid for several months until June 2020, why can’t the government ask the newly self employed to get their 2019/20 SA tax returns submitted online before the end of May 2020.

This is indeed a strange anomaly because the same computer logic that’s required to check whether or not the self-employed is still trading in 2019/20 could easily be applied to process the tax returns of newly created self employment business for 2019/20.

In order to save these new entrepreneurs from the growing food bank and universal credit queues, the government should request all self employed businesses to submit their 2019/20 tax returns before 31 May 2020.

No doubt HMRC are keen to mitigate the risk of fraud from false claims. However, the same risk assessment process being applied to late 2018/19 tax returns could be applied to early returns for 2019/20.

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