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Why compound interest is important

25/11/2020

Many of us are building a pension fund, a portfolio of shares or deposits with our bank or building society. Most of these investment options reward us for our participation by offering income (usually in the form of interest or dividends) or by demonstrating capital growth (share prices increasing). Accordingly, there are three

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Email to replace Companies House postal reminders

19/11/2020

Companies House has issued a press release to remind all companies to sign up for email reminders for annual accounts and confirmation statement. Companies House has now stopped sending reminders by post and has sent a final reminder letter to all companies currently receiving paper reminders. The letter explains why Companies House has

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Claiming the Self-Employed Income Support for first time?

19/11/2020

The Government has confirmed that the Self-Employed Income Support Scheme (SEISS) grant extension will apply for 6 months from 1 November 2020. It will be possible to claim the SEISS grant extension even if no previous claim had been made under the scheme once the eligibility criteria are met. The self-employed will receive 80% of

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Bounce Back loans still available

19/11/2020

The Bounce Back Loans scheme was launched in May 2020 to provide financial support to businesses across the UK that are losing revenue and seeing their cashflow disrupted as a result of the COVID-19 pandemic. The scheme allows small businesses to borrow between £2,000 and £50,000 and access the cash in most cases within 24

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£1 million Annual Investment Allowance extended

19/11/2020

In a welcome move, the government has announced that the temporary Annual Investment Allowance (AIA) cap will be extended for a further 12 months until 1 January 2022. The government says that this move is intended to boost confidence as companies look to weather the pandemic and plan for the future. This should also encourage investment

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Benefit conditions – annual parties and events

19/11/2020

Now is usually the time that businesses are planning Christmas parties for staff as well as possibly for partners/spouses, clients and prospective clients. Of course, with the continued pandemic and various lockdowns Christmas is looking pretty much cancelled this year. However, we have set out the benefit conditions for annual parties

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Benefit conditions – Trivial benefits

19/11/2020

The trivial benefits in kind (BiK) exemption applies to small non-cash benefits like a bottle of wine or a bouquet of flowers given to employees or any other benefit in kind classed as 'trivial' that falls within the exemption. Although the benefit is defined as ‘trivial’, employers should remember that this offers a

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Businesses within the scope of VAT in the UK

19/11/2020

The VAT system is policed by HMRC who can and do levy penalties for breaches of the legislation. There are four conditions that must be satisfied in order for an activity to be within the scope of UK VAT. These conditions are that the activity: Is a supply of goods or services That the supply takes place in the UK Is made by a

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HM Treasury instructions re CJRS

19/11/2020

An updated Treasury Direction under sections 71 and 76 of the Coronavirus Act 2020 concerning the extended Coronavirus Job Retention Scheme (CJRS) was published on 12 November 2020. The CJRS was due to come to an end on 31 October 2020 but has now been extended until 31 March 2021. Effective 1 November 2020, employees will receive up to

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Scottish Budget 2021

19/11/2020

Scotland’s Finance Secretary, Kate Forbes, has announced that the Scottish Government’s Budget will be published for 2021-22 on 28 January 2021. The date has been selected in order to allow the Scottish Government time to prepare for the new tax year. This is the second time that Scotland has held a Budget before the rest of

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Do you need a customs agent?

18/11/2020

If your business acquires goods or sells goods to the EU, and you have no import/export trade with non-EU countries you probably have no experience of dealing with the raft of red tape involved in clearing goods through customs and settling any duties or VAT payable. Affected businesses will need to abide by the new regulatory situation

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Those who shout loudest

18/11/2020

Many of the business disruption grants that have become available in the last few weeks are being distributed by local authorities. They include support for: Businesses obliged to close due to local or national lockdown and Businesses that have been severely affected by local or national restrictions but are still trading. Central

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Coding out debts deadline

12/11/2020

The coding threshold entitles tax payers to have tax underpayments collected via a tax code, provided they are in employment or in receipt of a UK-based pension. The coding applies to certain debts such as Self-Assessment liabilities, tax credit overpayments and outstanding Class 2 NIC contributions. Instead of paying off debts in a lump

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Protection for landlords and tenants

12/11/2020

The government guidance for landlords and tenants as a result of the coronavirus pandemic has been updated. The Coronavirus Act 2020 provides protection to social and private tenants by delaying when landlords can start proceedings to evict tenants. To give tenants greater protection from eviction, landlords are required to provide

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Further support for mortgage borrowers

12/11/2020

The Financial Conduct Authority (FCA) has announced new proposals to ensure that lenders provide tailored support to mortgage borrowers who continue to face payment difficulties due to the COVID-19 crisis. This follows the additional government measures announced over recent weeks to control the spread of coronavirus. Payment holidays to

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Holiday entitlements if furloughed

12/11/2020

The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme is open to all UK employers and will now run until 31 March 2021. From 1 November 2020, employees will receive up to 80% of their salary for hours not worked with a review date in January. One common question concerns holiday pay entitlement if furloughed.

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Business Asset Disposal Relief

12/11/2020

Business Asset Disposal Relief used to be known as Entrepreneurs’ Relief before 6 April 2020. The relief was renamed in Finance Act 2020. The name change does not affect the operation of the relief. Business Asset Disposal Relief applies to the sale of a business, shares in a trading company or an individual’s interest in a

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VAT – transfer of business as going concern

12/11/2020

The transfer of a business as a going concern (TOGC) rules concern the VAT liability on the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate. Where the sale of a business includes assets and meets certain conditions the sale will be

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Company trading losses

12/11/2020

Corporation Tax relief may be available where a company or organisation makes a trading loss. The loss may be used to claim relief from Corporation Tax by offsetting the loss against other gains or profits of the business in the same or previous accounting period. The loss can also be set against future qualifying trading income. Any

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New Furlough Scheme guidance published

11/11/2020

The detailed Furlough Scheme rules were updated 10 November 2020. To use the extended scheme – to 31 March 2021 – the steps that are required are: Check if you can claim Check which employees you can put on furlough Steps to take before calculating your claim Calculate how much you should claim Claim for your

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Barter your way through COVID disruption

10/11/2020

While we wait for the magic-bullets that promise to reduce the impact of COVID – vaccines etc – should we be exploring ways to exchange goods and services with our suppliers and customers? Barter is defined as: the exchange of goods and services without using money. Perhaps a decorator could repaint the outside of a local

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Getting the most out of digital data

10/11/2020

One of the great benefits of data stored in an electronic format is that it can be sorted in an endless array of reports. This offers business owners who have invested in accounts software a range of options. Once you have input basic accounts information, transactions, from your: Bank Payroll Suppliers, and Customers you can use

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Uncertainty

06/11/2020

While politicians and scientists try and figure out the best way to control COVID, we are left to pick up the pieces and try and salvage what we can of our businesses. Our economy is built on various, level playing field assumptions: Same legal requirements, Same opportunities to trade, Access to our customers COVID uncertainty

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Online sales platform

06/11/2020

If you sell goods or material that can be sold from the internet, have you considered this form of sales platform for your business? Providing access for your goods on the internet is a sensible strategy. If we have learnt anything from COVID it is the limitations on trade when social distancing – lockdown – is applied to

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Less than 100 days to file your tax return

05/11/2020

HMRC has published a news release to remind taxpayers that there is now less than 100 days to file their 2019-20, Self-Assessment tax return. Last year over 11 million taxpayers were required to complete a tax return, but over 958,000 taxpayers missed the deadline. If you are filing online for the first time you should ensure you register

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Taxable business gains

05/11/2020

If you are in business as a self-employed sole trader or as part of a partnership, there may be occasions when you are required to pay Capital Gains Tax (CGT). CGT is normally charged at a flat rate of 20% on the amount of ‘profit’ or ‘gain’. You will usually be liable to CGT where you sell or dispose of a

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Responding to a court judgement

05/11/2020

In today’s precarious business environment many companies are unable to pay their debts. If this happens, your creditors can ultimately apply to the court to get their debts paid. This can be done either by getting a court judgement or making an official request for payment (known as a statutory demand). If a court judgement has

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Tax-free perk for Christmas

05/11/2020

If you are an employer and looking to give a small Christmas bonus to your employees, then your best option is probably to give them a gift. In order to ensure that this is not a taxable gift, it is important to ensure that the trivial benefits in kind (BiK) rules apply. There is no tax to pay on trivial benefits in kind (BiK) provided

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Contributions towards capital expenditure

05/11/2020

A wide variety of grants or subsidies are available to businesses and can be received in addition to their ordinary business income. It is important to identify these contributions and to establish whether they are capital or revenue in nature. Funding which facilitates capital expenditure, such as new premises or machinery, is normally

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Sale of income in exchange for capital amount

05/11/2020

A capital sum received by an individual in respect of the sale or relinquishment of income derived from their personal activities can sometimes be treated as earned income and chargeable to Income Tax. If this is the case, the amount charged to Income Tax is not also charged to Capital Gains Tax. The following conditions must all be

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Registration of partnerships with HMRC

05/11/2020

A Partnership is a relatively simple way for two or more persons (or legal entities) to set up and run a business together with a view to profit. Partnerships can take many forms. Legal persons other than individuals can also be partners in a partnership. There are two main types of partnership, a conventional one with two or more

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Filing deadlines for company confirmation statement

05/11/2020

As well as filing accounts with Companies House, there is an important requirement to check that the information Companies House has about your company is correct. This is facilitated by the filing of an annual company confirmation statement. The confirmation statement was introduced in June 2016 and replaced the annual return. You could

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New national lockdown and changes to business support measures

05/11/2020

The Prime Minister, Boris Johnson speaking at a press conference on Saturday night, 31 October 2020, confirmed widespread expectations of a second national lockdown in England to help stem the growing resurgence of the coronavirus. The Government was faced with significant concerns that if they took no action, the NHS could be overwhelmed

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Temporary extension to the Help to Buy scheme

29/10/2020

The Help to Buy equity loans scheme is open to both first-time buyers and home movers on new-build homes in England with a purchase price up to £600,000. The Help to Buy equity loans provide a low-interest loan towards the deposit. The loan is interest free for the first 5 years. New home buyers need a 5% deposit, and the government

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Job Support Scheme for closed businesses

29/10/2020

The CJRS or furlough scheme ended on 31 October 2020 and has been replaced by the Job Support Scheme (JSS). This JSS has been designed to help businesses and employees deal with a fresh spike of the virus and a winter of uncertainty. The JSS is now split into two parts, the JSS Open for businesses which remain open and the JSS Closed for

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Venues required to enforce rule of six

29/10/2020

Since 18 September 2020, many designated venues in England have been required to enforce the rule of 6. The 'rule of 6' bans any social gathering of more than 6 people, except under limited circumstances such as if a single household or support bubble includes more than 6 people. Services included within the legal requirements to

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Carry back charitable donations

29/10/2020

If you pay Income Tax at the basic rate no additional relief is due on your charitable donations. However, if you are a higher rate or additional rate taxpayer then you can claim tax relief on the difference between the basic rate and your highest rate of tax. This relief is given by increasing your basic rate and higher rate band by the

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JSS – financial impact test for large employers

29/10/2020

The Job Support Scheme (JSS) Open is available from 1 November 2020 for businesses that remain open but with employees working reduced hours. Employees must work at least 20% of their usual hours, paid as normal, in order to qualify for the JSS Open. The employee will then receive 66.67% of their normal pay for hours not worked. Employees

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JSS fraudulent claims

29/10/2020

The Job Support Scheme (JSS) has replaced the Coronavirus Job Retention Scheme (CJRS) which came to an end on 31 October 2020.There are significant concerns that between 5%-10% of claims made under the CJRS were fraudulent or made in error. There are additional anti-fraud measures in place to help prevent fraudulent claims made under

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Events company collapse

29/10/2020

A recent investigation by the Insolvency Service has seen a husband and wife disqualified from being directors for a total of 17 years. The husband and wife team were directors of a company that provided conference and event organisation services across the UK. The male director had resigned as a director of the company in November 2014

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Unravelling the jargon: what is a support bubble?

27/10/2020

The following notes are copied from the GOV.UK website. At first glance, it would appear that the definition of a support bubble should be fairly easy to grasp. Don’t hold your breath. Basically, a support bubble is a close support network between a household with only one adult in the home (known as a single-adult household) and

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Handling food? Wash, those hands

27/10/2020

If you are considering any change to your business activities that will involve handling any packaged food or raw ingredients, as you would expect, there are a raft of regulations that you will need to consider and adopt. The Department of the Environment has published considerable guidance on the GOV.UK website. Simply Google

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Tax Diary November/December 2020

25/10/2020

1 November 2020 - Due date for Corporation Tax due for the year ended 31 January 2020. 19 November 2020 - PAYE and NIC deductions due for month ended 5 November 2020. (If you pay your tax electronically the due date is 22 November 2020.) 19 November 2020 - Filing deadline for the CIS300 monthly return for the month ended 5 November

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New cashback scheme proposed

22/10/2020

The government has announced plans to allow customers to get cashback from shops without needing to make a purchase. At the moment, cashback is only available to those who buy goods. The new proposals have been put in place to help protect the UK’s cash system following a steady decline in the use of cash. This process has

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Closing a limited company

22/10/2020

There are a number of reasons why you may decide to close your limited company. This could be because a limited company structure no longer suits your needs, your business is no longer active, or the company is insolvent. You will usually need the agreement of all the company’s directors and shareholders to close down the

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Brexit countdown importers

22/10/2020

As we have reported previously, the UK government has confirmed that it will neither accept nor seek any extension to the Brexit transition period which expires on 31 December 2020. The EU has formally accepted this position. This means that the process for importing goods from the EU will change from 1 January 2021. HMRC has published

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Brexit countdown exporters

22/10/2020

The Brexit transition period is due to end on 31 December 2020 and this means that the process for exporting goods to the EU will change from 1 January 2021. Current guidance published by HMRC states that from 1 January 2021, businesses will need to make customs declarations when exporting goods to the EU. This is what you currently have

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Clock ticking on the Annual Investment Allowance

22/10/2020

The Annual Investment Allowance (AIA) allows for a 100% tax deduction on qualifying expenditure on plant and machinery to be deducted from your profits before tax. The relief is normally capped at £200,000 per annum but was temporarily increased to £1 million for a 2-year period from 1 January 2019 to 31 December 2020. This

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Distributions in anticipation of striking off rules

22/10/2020

The Extra Statutory Concession (ESC) - C16 was a well-used extra-statutory concession that allowed company directors to treat final distributions as a capital disposal and close down their business in an efficient manner. ESC C16 was withdrawn in March 2012 and replaced by s1030A Corporation Tax Act 2010 (CTA 2010) provisions. This move

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Starting rate of Income Tax for savings

22/10/2020

In the current tax year, anyone with taxable income of less than £17,500 will have no tax to pay on their savings income - interest received. This figure is calculated by adding the £5,000 starting rate limit for savings (where 0% of the interest is taxable) to the current £12,500 personal allowance. However, this

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