Key budget 2024 announcements from FBTC

Here are our main takeaways from the Autumn Statement.

Making Tax Digital

• Lower the threshold at which point an individual must submit information quarterly to HMRC from £30,000 to £20,000. Coming into force before the end of this parliament. More information to follow once available.  

Income Tax

• No change to tax rates,
• Personal Allowance frozen,
• Tax bands frozen until 28/29,

National Insurance

• Class 2 and 3 to increase based on CPI from 25/26,
• Class 1 and 2 thresholds to increase by CPI from 25/26,
• Employers NIC increased to 15% From April 2025.
• Secondary threshold lowered from £9,100 to £5,000 From April 2025
• Employers Allowance increase from £5,000 to £10,500

VAT

• No Change to VAT rate,
• No Change to Registration threshold,
• Private school now have to pay VAT on fees,

Corporation Tax 

• No Change to Rates,

Capital Gains Tax 

• Increase to main rate from 10% to 18%,
• Increase to higher rate from 20% to 24%,
• Tax on assets qualifying for Business Asset Disposal Relief to increase to 14% from April 2025 and 18% from April 2026,

Stamp Duty Land Tax

• Additional SDLT charge for additional dwelling increased from 3% to 5%,
• Increase to rate paid by companies and non-natural persons from 15% to 17%,

Furnished Holiday Let

• Furnished Holiday regime removed from April 2025,

Inheritance Tax

• No Change to Rate of thresholds,
• Unused pensions to be included in estate from April 2027,
• APR and BPR capped at £1 million at 100%, remaining at 50% relief.

Fuel Duty

• No change to fuel duty,
• 5p cut to remain in place until March 2026,

The more unusual stuff

• Air passenger duty on private Jets increase by 50%,
• Tobacco duty up,
• New duty on Vapes,
• Vehicle excise duty to increase with RPI,
• New Vehicle excise duty for low CO2 emission cars,
• No change to ISA limits,
• British ISA scrapped,
• All Benefits in Kind to be payrolled from April 26,
• High Income Child Benefit Charge to remain repayable on income over £50,000, although can now be collected through PAYE Code,
• HMRC late payment interest goes up by 1.5%.

FBTC Accountancy Services receives Feefo Platinum Trusted Service Award 2024

FBTC Accountancy Services has won the Feefo Platinum Trusted Service Award, an independent seal of excellence, which recognises businesses that consistently deliver a world-class customer experience.

Feefo established the Trusted Service Awards in 2014 to recognise brands that use the platform to collect verified reviews and receive exceptional feedback from their customers. The awards are unique because they truly reflect a business's dedication to providing outstanding customer service by analysing feedback from real customers.

Working with over 6,500 brands, Feefo is the world's largest provider of verified reviews, helping brands understand customers by analysing verified reviews and providing insight into trends, needs and habits. This award celebrates brands that are delivering standards that go above and beyond.  

Feefo has presented Platinum Trusted Service Awards to businesses that have achieved Gold standards for three consecutive years. To receive a Gold Trusted Service Award, businesses must have collected at least 50 reviews with a Feefo service rating of between 4.5 and 4.9 between 1^st January 2023 and 31^st December 2023.

Congratulating FBTC Accountancy Services on winning this year’s award, Tony Wheble, CEO at Feefo, said: “With customers continuing to build resilience in a time of economic uncertainty, we’re delighted to showcase thousands of our clients who are continuing to go above and beyond for each customer.  

“The Trusted Service Awards have always been about recognising companies that go way beyond the norm in customer service and in turn receive great feedback from delighted customers.

“A particular congratulations to FBTC Accountancy Services for winning a Platinum Trusted Service Award by providing great customer service consistently over a number of years. I look forward to seeing them continue to achieve next year and beyond.”   

About Feefo

Feefo is a leading global customer reviews and insights platform on a mission to empower its clients to fully understand how their customers experience their product or service.   

The Feefo suite of software, combined with its technical solutions expertise, enables its clients to gain a deeper understanding of customer sentiment, behaviour and intent, empowering them with insights to make better business decisions and improve their return on investment. With 96% of customers relying on reviews to purchase, Feefo also creates trust between consumers and businesses by adopting a unique approach to only collect verified reviews from real people.  

Please visit: www.feefo.com

Did you know that earning extra money through platforms such as Vinted, eBay, or Airbnb could potentially lead to an unexpected tax bill?

If you make more than £1,000 (before expenses) through these platforms, you should be declaring and paying tax on it. This £1,000 applies to all trading income, not just online platforms, and applies to property, which means that Airbnb hosts are affected as well. 

To reduce tax evasion, from the 1st January 2024, new rules are mandating that websites regularly collect their seller's transaction details and share them with HMRC. 

The UK government is treating online platforms more like normal businesses, with those using them subject to the same income tax rules as anyone else. A HMRC spokesperson said that the new rules would help online sellers get their taxes right the first time and detect any deliberate non-compliance, ensuring a level playing field for all taxpayers. 

If you're earning under the £1,000 tax threshold, you don’t need to declare it but should keep records of transactions in case HMRC asks for proof. It's always a good idea to keep track of your income and expenses to avoid any surprises come tax season.

Alan Gott, FBTC Manager, comments "HMRC have realised that there is a large proportion of the users of these sites that are not declaring their income and are now actively targeting them. It’s more than likely that HMRC will contact the sellers/landlords/creators and allow them to come forward and correct this omission. If you are one of the taxpayers that have accidentally omitted income then you must act on this quickly, before HMRC open a much more serious enquiry". 

Driving Instructors earnings topping £1000 per week

FBTC have compiled an independent and authoritative analysis on the health of the driver training industry.

At FBTC we have been providing accountancy and tax support to UK Driving Instructors for over 25 years and in that time, we have witnessed an enormous amount of change within the industry. Having seen a need to provide an independent and authoritative analysis on the health of the UK Driver Training sector, FBTC created and conducted the Annual Driving Instructor Review, which has been widely regarded as the definitive guide to Driving Instructor earnings throughout the UK for the last eight years.

Read the full report on earnings and job satisfaction here - https://www.fbtc.co.uk/content/files/fbtc_instructorguide_2023.pdf

FBTC receives Feefo Platinum Trusted Service Award 2023

FBTC Accountancy Services has won the Feefo Platinum Trusted Service Award, an independent seal of excellence, which recognises businesses that consistently deliver a world-class customer experience.

Feefo established the Trusted Service Awards in 2014 to recognise brands that use the platform to collect verified reviews and receive exceptional feedback from their customers. The awards are unique because they truly reflect a business's dedication to providing outstanding customer service by analysing feedback from real customers.

Working with over 6,000 brands, Feefo is the world's largest provider of verified reviews, helping brands understand customers by analysing verified reviews and providing insight into trends, needs and habits.

With consumer confidence at near historic lows due to rising inflation, as well as research from the Institute of Customer Service revealing that complaints rose to 17.3% in the second half of 2022, this award celebrates brands that are successfully navigating tough market conditions to deliver exceptional service.

Feefo has presented Platinum Trusted Service Awards to businesses that have achieved Gold standard for three consecutive years. To receive a Gold Trusted Service Award, businesses must have collected at least 50 reviews with a Feefo service rating of between 4.5 and 4.9 between 1^st January 2022 and 31^st December 2022.

Alan Gott, FBTC Accountancy Services commented: “We’re delighted to receive a Platinum Trusted Service Award from Feefo, again. Keeping our customers happy is our priority so the fact this award is based on feedback from real customers gives us confidence we are providing an exceptional level of service. The award also recognises just how hard our staff have worked under fresh challenges, with both rising inflation and the cost-of-living crisis affecting both consumers and businesses alike. As we enter a new year, we will continue to listen, understand and deliver.”

Congratulating FBTC, Tony Wheble, CEO at Feefo, said: “This year has been a difficult one for so many businesses. I’m delighted to recognise thousands of our clients that have overcome various challenges to provide such high levels of customer service and satisfaction.

“The Trusted Service Awards have always been about recognising companies that go way beyond the norm in customer service and in turn receive great feedback from delighted customers.

“A particular congratulations to FBTC for winning a Platinum Trusted Service Award by providing great customer service consistently over a number of years. I look forward to seeing them continue to achieve next year and beyond.”   

About Feefo

Feefo is a leading global customer reviews and insights platform on a mission to empower its clients to fully understand how their customers experience their product or service.   

The Feefo suite of software, combined with its technical solutions expertise, enables its clients to gain a deeper understanding of customer sentiment, behaviour and intent, empowering them with insights to make better business decisions and improve their return on investment. With 96% of customers relying on reviews to purchase, Feefo also creates trust between consumers and businesses by adopting a unique approach to only collect verified reviews from real people.  

Please visit: www.feefo.com 

Autumn Statement 2022

Chancellor Jeremy Hunt delivered his first full budget on the 17^th November 2022, this was the third fiscal statement of recent and as there has been some changes following previous announcements, we wanted to compile a collective overview.

This overview does include some previously announced changes, but we thought it would be beneficial to summarise everything in one place. 

Income Tax

• The income tax personal allowance and higher rate threshold were already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028. They will be £12,570 and £50,270 respectively.
• Basic rate of income tax remains at 20% indefinitely.
• The personal allowance and basic rate band for Income Tax were already frozen until 2025/26 but are now frozen until 2027/28.
• The 45% additional rate of income tax is retained and the point at which it starts is lowered from £150,000 to £125,140 from 6 April 2023.

Dividends

• The government has also confirmed that, from April 2023, the rates of taxation on dividend income will remain as follows:

  • the dividend ordinary rate - 8.75%

  • the dividend upper rate - 33.75%

  •  the dividend additional rate - 39.35%. As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%

• In addition, the government will reduce the Dividend Allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024. These changes will apply to the whole of the UK.

National Insurance

• National Insurance Contributions (NIC) extra temporary increase of 1.25% reversed (and the newish Health and Social Care Levy which was to follow on cancelled).

• NIC thresholds frozen from April 2023 until April 2028.

• The government will update the married couple’s allowance and blind person’s allowance by inflation for 2023/24.

• Following the principle detailed above, the changes to Class 4 NICs will again be averaged across 2022/23, so that the rates will be 9.73% and 2.73%.

Capital Taxes

• Capital Gains Tax annual exempt amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.

• Inheritance Tax nil-rate band frozen at £325,000 for a further two years until April 2028.

• Stamp Duty Land Tax (SDLT) changes made earlier this year by the mini-budget remain, but only until 31 March 2025.

Other measures

• Vehicle Excise Duty – from April 2025 electric cars, vans and motorcycles will begin to pay in the same way as petrol and diesel vehicles.

• Energy Profits Levy increased and extended.

• Cost of living payments – further payments in 2023/24.

• Increases in the National Living Wage and the National Minimum Wage rates.

Action needed - HMRC Letters

We have been made aware that a few clients have received a letter from HMRC informing them that they may have to repay the first three SEISS Grants as their 2019/20 Tax Return has not been submitted or did not include self-employed pages.

We have investigated this, and so far, these letters have been sent in error. We have contacted the HMRC Agent dedicated helpline and raised the issue as to why they have been sent but they are unable to tell us why and as there is no contact number for the issuing department on the letter, we cannot call them to discuss it directly.

We have been advised action does have to be taken, please DO NOT IGNORE the letter. If you get one, send it directly to us via email so we can review the situation and appeal against it on your behalf, where necessary.

Please contact us if you are unsure about any HMRC correspondence you have received. We recommend you send us an email info@fbtc.co.uk and a member of the team will help you.

FBTC Accountancy Services receives Feefo Platinum Trusted Service Award 2022

Since 2014, Feefo has recognised the businesses who deliver exceptional experiences, using feedback from real customers.

The Trusted Service Awards are unique as they are based purely on feedback from real customers. This means they are a true reflection of commitment to outstanding customer service. You can read FBTC’s client reviews here.

Feefo have given Platinum Trusted Service awards to businesses who have achieved gold standard for three consecutive years. To receive a Gold Trusted Service award, businesses must have collected at least 50 reviews with a Feefo service rating of between 4.5 and 4.9 between 1st January 2020 and 31st December 2021.

This award means even more following another difficult year. Online interactions have soared since the start of coronavirus. People are now 40% more likely to leave feedback after a purchase. This has made it very difficult for many businesses who struggled to respond effectively. 43% of people now believe that companies have become less effective at dealing with negative feedback in the last year. 

Congratulating FBTC Kim Burgess, Head of Customer Success at Feefo, said:

“The Trusted Service Awards recognise companies who go above and beyond to provide the very best customer experience. I’m so impressed by how our customers have overcome the challenges of the past two years. A particular congratulations to our Platinum Trusted Service winners. It’s an extremely tough challenge. I can’t wait to see what our customers achieve in 2022.” 

About Feefo

Feefo is a leading global customer reviews and insights platform on a mission to empower its clients to fully understand how their customers experience their product or service.   

The Feefo suite of software, combined with its technical solutions expertise, enables its clients to gain a deeper understanding of customer sentiment, behaviour and intent, empowering them with insights to make better business decisions and improve their return on investment. With 96% of customers relying on reviews to purchase, Feefo also creates trust between consumers and businesses by adopting a unique approach to only collect verified reviews from real people.  

Please visit: www.feefo.com

HMRC Update

HMRC published a press release on 6th January 2022, confirming self-assessment taxpayers will be given more time to submit their tax return and pay any tax due because of  COVID-19 pressures.

In summary:

• anyone who cannot file their return by the 31^st January deadline will not receive a late filing penalty if they file online by 28^th February; and
• anyone who cannot pay their Self-Assessment tax by the 31^st January deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1^st April 2022.

However, interest will be payable from 1^st February, as usual, so it is still better to pay on time if possible.

We would advise you to read the full press release to ensure you are fully aware of how this relates to you and your circumstances, a link to which is below

https://www.gov.uk/government/news/hmrc-gives-self-assessment-taxpayers-more-time-to-ease-covid-19-pressures 

FBTC are shortlisted to be Professional Support Provider of the Year

National Insurance to rise

Last week Parliament overwhelmingly voted to approve the Governments proposed National Insurance (NI) increase, to help fund health and social care. This will see an additional 1.25% added to Class 1 and Class 4 NI as well as a 1.25% Income Tax increase to dividends.

The change takes effect from 5th April 2022 and will affect working-age employees, employers and self-employed individuals. For self-employed individuals this will see Class 4 NI increase from 9% of profit to 10.25% of profit. This amount will be collected through your Tax Return and the first payment that will include this extra contribution, will be due in January 2024.

For every £10,000 worth of profit over the Lower Annual Profit limit, £9,568 in 2021/22, you will pay an additional £125. We recommend that you bear this rise in mind, in your tax planning, to ensure that you are putting enough to one side to cover your tax liabilities as they fall due.

From April 2023, NI will return to the current rate and the 1.25% increase will be stripped back out of the general NI rate and charged as a separate levy, specifically allocated to health and social care. From that point, those who are still working above the State Pension age will be liable to pay the levy on earned income. However, there is significantly less guidance currently available on this levy and we will update you as more is released.

Looking ahead, the Autumn Budget is due to take place on the 27th October and we suspect there will be further changes to come. More on this at the time of the Budget.

New Tax Year - New Personal Allowances

The 2021/2022 tax year brings an increase in personal allowances. The allowances in England and Wales are:

Once your taxable income goes above £100,000 your Personal Allowance is reduced down to zero and is completely gone for income over £125,140.

The Scottish Income Tax rates are:

Like England and Wales you do not get a Personal Allowance if you earn over £125,140. 

Once your taxable income goes above £100,000 your Personal Allowance is reduced down to zero and is completely gone for income over £125,140.

Budget: 3rd March 2021

The Chancellor, Rishi Sunak, has now delivered his second budget which brought a long-term recovery plan, further covid support and an encouragement on investment.

Here are the core tax announcements: 

• SEISS grant 4 will go live from the end of April with a 5th and final grant in July. The 19/20 tax return will now be taken into consideration, as long as it was submitted by midnight on the 2nd March 2021, further details on grant 4 can be found here; 
• Working Tax Credit claimants will also be given more support for the next six months, with a one-off payment of £500.The Universal Credit uplift of £20-a-week will continue for another six months;
• Fuel duty will be frozen;
• No rise to Income tax, National Insurance or VAT;
• Personal tax threshold frozen at £12,500 but will increase next year to £12,570, but it will be kept at this level until 2026;
• The stamp duty holiday on properties worth up to £500,000 will be extended until the end of June. With a new mortgage guarantee scheme so first-time buyers only need a 5% deposit;
• The furlough scheme will be extended until the end of September;
• Planned increases in duties for spirits, wine, cider and beer will be cancelled;
• Hospitality and tourism will continue to enjoy a 5% reduced rate of VAT for a further six months;
• Corporation tax will increase to 25% in 2023;
• Inheritance tax thresholds, the pensions lifetime allowance, the annual exempt amount in capital gains tax and the VAT threshold will remain at the same levels for two years from April 2022;
• For the next two years, when companies invest, they can reduce their tax bill by 130% of their capital expenditure in a super deduction.

The Chancellor also commented on the following;

• An extra £19m for domestic violence programmes, describing domestic violence as "one of the hidden tragedies of lockdown";
• Incentive for businesses to take on new hires is confirmed with an increased payment of £3,000;
• UK Infrastructure Bank, located in Leeds;
• A further £1.6bn in funding will be provided to continue rollout of coronavirus vaccines and improve future preparedness;
• 'Help To Grow' announced means helping small businesses develop digital skills by giving them free expert training and a 50% discount on new productivity-enhancing software, worth up to £5,000 each;
• Announcement of eight freeports that are "special economic zones with different rules to make it easier and cheaper to do business";
• Visa reforms aimed at highly skilled migrants, including an unsponsored points-based visa for talent in science, research and tech, with new improved visa processes for entrepreneurs;
• Funding for the devolved administrations will also increase by £1.2bn for the Scottish government; £740m for the Welsh government and £410m for the Northern Ireland executive,
• There will also be £1bn for 45 new town deals and a £150m fund to help communities take ownership of pubs, theatres, shops and sports clubs that are at risk of loss.

FBTC Accountancy Services receives Feefo Platinum Trusted Service Award 2021

FBTC have won the Feefo Platinum Trusted Service award, again! Feefo gives Platinum Trusted Service awards to businesses that have achieved the Feefo Gold standard for three consecutive years or more. FBTC are thrilled to have won platinum status once again. 

Steph Heasman, Director of Customer Success at Feefo, commented: “The Trusted Service award has always been about recognising companies that are outstanding in customer experience and generate great feedback from happy customers. 

Alan Gott, FBTC Manager stated: “This is brilliant news! The team work exceptionally hard, even more so through the challenges of 2020. We really do appreciate all client feedback as it helps us to continuously improve our service. Thank you to our clients for taking the time to leave Feefo reviews and thank you to the team for providing amazing service and support”.

Created by Feefo, Trusted Service is awarded only to businesses that use Feefo to collect genuine reviews and insights. Businesses who meet the high standard, based on the number of reviews they have collected and their average rating, receive the award. A highly valued badge of approval, this accreditation remains unique, as it is based purely on interactions with real customers. As all reviews are verified as genuine, the accreditation is a true reflection of a business’s commitment to outstanding service.

Feefo is a reviews and customer insights technology company that provides businesses with the tools to collect real, purchase-verified reviews and insights. Working with over 3,500 clients, Feefo ensures that all feedback is authentic, by matching it to a legitimate transaction, to increase consumer confidence and enable businesses to make smarter business decisions.

About Feefo

Feefo is a disruptive global technology company empowering brands to make smarter decisions and improve consumer experiences by leveraging the full potential of real customer reviews.

Feefo’s cutting-edge review platform is trusted by more than 3,500 brands including Next, Vauxhall, Iceland, Mazda, Expedia, Michael Page and JCB, who rely on it to supply smart insights that transform their ability to market, sell and build more rewarding relationships with customers.

A trusted partner of Google, Feefo’s technology and consultancy team possesses unique expertise and business insight, enabling brands to employ cutting-edge innovation that optimises the delivery of digital marketing and advertising.

Please visit: www.feefo.com

GoRoadie name FBTC as Industry Partner of the Year

At the end of 2020 GoRoadie named FBTC as their Industry Partner of the Year.

Go Roadie felt FBTC deserved this award because ‘For years FBTC have stood with instructors helping them with their year end accounts, offering a professional service from start to finish. With stellar reviews from instructors across the country, it's clear why they are trusted in this space’.

FBTC want to say thank you to all clients! Alan Gott, FBTC Manger said ‘After a very tough year, it is very nice to hear there have been such lovely comments made about our service’.

National Lockdown 3.0

A reminder of Government support available:

HMRC Time to Pay
As part of the Coronavirus support put in place by the government, HMRC have set up a Time to Pay service if you are unable to pay your tax bill. Your 2019/2020 tax return needs to have been submitted to HMRC before you are be able to use the online self-service option. You will then be able to set up a direct debit and pay any tax that is owed in monthly instalments over a maximum of 12-monthly payments. 
Full information can be found here.

SEISS Grant 4 
Further details on the 4th SEISS grant will be announced in due course. Applications for the 3rd grant can be made up until the 29th January 2021.
Here is the link to the GOV.UK webpage on SEISS Grants.

Universal Credit
If needed, you may wish to seek support through Universal Credit. Please be aware that whilst Universal Credit is not deemed to be taxable income, once in receipt of it, you will need to report any changes to your income, for example once you commence trading again following the relaxation of lockdown measures.
Click here to read more about Universal Credit.

Bounce Back Loans 
This loan is accessible to those that are based in the UK, have been adversely impacted by coronavirus and started trading before the 1st March 2020. The scheme is currently open until the 31st March 2021.
If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top the loan up, you must do this by the 31st January 2021. 
Full details are here.

Local Support
As everyone's situation is different, advice and guidance can vary. You can click here to use a helpful service to find out what other support you may be able to access if your business has been affected by coronavirus. This specific tool allows you to focus on your situation and what support is available in your local area.

HMRC Scams
HMRC have just announced that they are aware of fake texts circulating asking people to “click here” for a new grant. Do not reply to the SMS and do not open any links in the message. Anything relating to the government grants must be done through your Government Gateway account. 

How your trading conditions affect your eligibility for the SEISS

Applications are now live for the third SEISS grant and if you are going to apply you must do so by the 29th January 2021. HMRC have stated you must make an honest assessment of your business and you must be able to show you have experienced a significant reduction in profits. You must also meet all other eligibility criteria to make a claim.

We strongly recommend you refer to the examples provided by HMRC, their guidance can be accessed here, it is helpful for understanding what they mean by reduced demand or temporary closure. Here are a few examples;

Unable to trade and reasonable belief

A hairdresser has had to shut his shop due to government restrictions. He will not have any income due to the closure and reasonably believes the reduction in his trading profits will be significant. He is eligible to claim the third grant.

Reduced demand and no reasonable belief 

A café owner has fewer customers due to government restrictions on households mixing, which initially reduces her takings. She increases her prices and believes her trading profits will not reduce significantly, so she is not eligible to claim the third grant.

Unable to trade and no reasonable belief 

A builder has developed coronavirus symptoms and self isolates for 5 days before receiving a negative test result. During those 5 days he was unable to work from home but was able to rearrange his contracts. He does not believe there will be a significant reduction in his trading profits. He is not eligible to claim the third grant.

As expected HMRC are receiving high levels of contact, click here for the different ways to reach out to HMRC, if you need to. 

Lockdown Part 2

Winter Economy Plan

Rishi Sunak announced his Winter Economy Plan on Thursday 24th September. Rishi’s support was based on the outlook that 'People want to see us focused on the here and now'. Two key updates for the self-employed are outlined below.
 
SEISS Grant

The SEISS grant will be extended with two additional grants, the first covering the period November to January and the second covering February to April. The grant will be based on 20% of your profit and to qualify for the grants your must have qualified for the previous grants. Also, you must be trading but be facing reduced demand due to Covid-19. 

Paying HMRC

Previously, the Treasury had given anyone with a July 2020 Payment on Account a 6-month extension, allowing this payment to be made in January 2021. The Chancellor has also announced a further extension for all individuals due to pay HMRC in January 2021 (including the above payment on Account). It appears this extension will be in the way of a 12-month payment plan with HMRC, running from February 2021 to January 2022. To qualify you must owe HMRC less than £30,000. Unlike the previous extension an individual will have to apply for this extension, however, no guidance has been issued on how to make the application yet.

Further updates and advice will be issued as we know more. 

CHANGE IS THE ONLY CONSTANT THING IN LIFE

There is no doubting that the last few months have been extremely tough, and as we move through the restart and recovery there will be more changes to come. Hopefully, you are back in the passenger seat, raring to go and let’s hope we move through the rest of 2020 in a more positive way.

The lockdown saw the driver training industry come to a halt and home-schooling became a reality for many, as did the growth in Tik Tok challenges and baking banana bread! Many took to keeping themselves busy and it was also great to hear about driving instructors putting their skills to great use, I mean there is no one better than a driving instructor to take on a driving role for a supermarket, courier or the NHS.

With the mix of getting back to your day job and making lessons as safe as possible, we know you will have a lot to think about now. We wanted to make sure you have not missed any support that is available to you, especially as things are ever-changing. We do know a lot of self-employed fell through the cracks of the Government support and the mini Budget on the 8^th July was the last chance saloon for some freelance sectors. There has been a lot to take in over recent months so here are a few areas to recap:

SEISS SECOND GRANT

• Based on 70% of your trading profits
• Your business must have been adversely affected from 14th July
• Applications for the second and final grant are due to go live on the 17th August
• If parents and those who adopted, took time out of trading to care for children within the first 12 months of birth or 12 months of an adoption placement they will now be able to use either their 2017/2018 or both 2016/2017 and 2017/2018 self-assessments for the basis of their SEISS eligibility. All other eligibility criteria remain the same.

DEFER TAX PAYMENTS

• HMRC automatically deferred the July payments that were due
• You must pay by the 31st Jan 2021 if you deferred your July tax payment
• Remember your tax bill for the 2019/2020 tax year is also due 31st Jan 2021

BOUNCE BACK LOAN

• Provides access to borrowing that is between £2,000 and up to 25% of your turnover (up to a maximum of £50,000).
• No repayments for 12 months
• Make sure you have your 2019/2020 tax return done so the latest figures are included
• Always seek financial advice prior to borrowing

TAX TIPS

You might not have done your 19/20 tax return just yet (don’t worry, you have until the 31st Jan 21 to file online) but we wanted to highlight a few things ahead of your 20/21 return and to help you give your business that self-care that it needs.

Making Tax Digital (MTD) is still on the horizon, MTD is HMRCs plan to mandate digital record keeping. COVID-19 and the support provided by HMRC has been priority over recent months, but we are monitoring Making Tax Digital updates. Small changes now will mean it is an easier transition when the time comes. If you are not used to keeping digital records or operating through software it is best to get comfortable ahead of the change. A bookkeeping routine is important, yes you will likely prefer to watch the latest Netflix release, but it will help you to understand your businesses cashflow. It is one of the most important financial management tasks so that you know the income and outgoings of your business. This way you know if you have any cash reserves, vitally important when you see a period of reduced income. The best way to put it: 

Both SEISS grants are taxable and need to be recorded as income on the 20/21 tax return, make sure you record the amounts you received on the dates you received them.

Do not forget to include all PPE expenses, that relate to your business, in your tax returns. You are unlikely to have ever purchased such items for your business before, but the costs of such items will quickly add up.

We always advise clients to have separate business and personal bank accounts, it will make your life easier in the long run. Especially when looking for transactions or if an HMRC investigation ever pops up. You might also want another account to set aside your savings for your tax liabilities, out of sight and out of mind hopefully means it is easier to keep that pot of funds available. 

There is no one size fits all approach to this recovery, do what is best for you and your business. Reach out for help when you need it, stay safe, be aware of scams and most importantly try not to panic.