Scams and Fraud

Unfortunately, at a time like this, Scams and Fraud are rife.

Be aware of text messages, emails, telephone calls, etc that you are not expecting or are from a new source.

Do not click on links and do not offer anyone your banking or personal information unless you are sure it is safe to do so.

Contact the Citizens Advice Bureau if you have been subject to a scam or fraud and they can offer you support.

Follow this link to their website for advice and find out if something could be fraudulent.

Defer your Self Assessment payment on account due to coronavirus

Choose how and when you can delay making your second payment on account for the 2019 to 2020 tax year.

You have the option to defer your second payment on account if you’re:

  • registered in the UK for Self Assessment and
  • finding it difficult to make your second payment on account by 31 July 2020 due to the impact of coronavirus

You can still make the payment by 31 July 2020 as normal if you’re able to do so.

The June 2020 Self Assessment statements showed 31 January 2021 as the due date for paying the July 2020 Payment on Account. This is because HMRC updated their IT systems to prevent customers incurring late payment interest on any July 2020 Payment on Account paid between 1st August 2020 and 31 January 2021. The deferment has not been applied for all customers by HMRC and it remains optional.

HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021.

You will still need to submit your Self Assessment tax return to HMRC on time.

If you choose to defer

You do not need to tell HMRC that you’re deferring your payment on account.

Choosing to defer will not stop you from being entitled to other coronavirus support that HMRC provides.

You must make your second payment on account on or before 31 January 2021 if you choose to defer. Other payments you may have to make by this date include any:

  • balancing payment due for the 2019 to 2020 tax year
  • first payment on account due for the 2020 to 2021 tax year

You can check payments you need to make towards your next tax bill by signing in to your online account.

If you want to pay in full

You can pay your second payment on account bill in full any time between 31 July 2020 and 31 January 2021 using the online service.

If you want to pay in instalments

You need to contact HMRC if you already have overdue tax which you’re paying through a Time to Pay instalment arrangement and want to include your second payment on account in that arrangement.

If you do not have other overdue taxes, you can make your payment in instalments any time between now and 31 January 2021 by setting up a budget payment plan.

Payments made by Direct Debit

If you choose to defer and normally make your payments on account by Direct Debit, you should cancel your Direct Debit through your bank as soon as possible so that HMRC will not automatically collect any payment due. You can cancel online if you’re registered for online banking.

After the deferral ends

The usual interest, penalties and collection procedures will apply to missed payments.

How to get help

If you’re still struggling to pay your tax bill by 31 January 2021, or you’re experiencing other financial difficulties you can contact HMRC’s Time to Pay service.

If you need any assistance with completing your Self Assessment Return for the year ended 5 April 2020 please contact Chris who will be happy to help you.

Flexible furlough scheme started

The government’s Coronavirus Job Retention Scheme (CJRS) has so far helped protect more than 9.3 million jobs through the pandemic, with employers claiming more than £25.5 billion to support wages.
The scheme will remain open until the end of October and will continue to support jobs and business in a measured way as people return to work, our economy reopens and the country moves to the next stage of its recovery.
From the beginning of July, a month earlier than previously announced, employers will have the flexibility to bring furloughed employees back to work on a part time basis.
Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.
Chancellor of the Exchequer Rishi Sunak said:
Our number one priority has always been to protect jobs and businesses through this outbreak. The furlough scheme, which will have been open for eight months by October, has been a lifeline for millions of people and as our economy reopens we want that support to continue.
Giving firms the flexibility to bring back furloughed workers on a part-time basis will help them work gradually and help them plan for the months ahead.
From August, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. Businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.
The government has also announced that businesses who no longer need the CJRS grants they previously claimed have the option to voluntarily return them.
This is in direct response to employers asking how they can return grants voluntarily – and businesses are under no obligation to do this, but should contact HMRC if they want to pay the grant back.
Companies across the UK who are bringing back furloughed staff today include The Drury Tea and Coffee Company, and Yes Energy Solutions.
Marco Olmi, Managing Director of London-based international coffee wholesaler The Drury Tea and Coffee Company, said:
The ability to bring our staff out of furlough in a flexible manner will be enormously beneficial as the industry eases out of lockdown. Without this flexibility we would really struggle to cope as we endeavour to grow turnover back to something approaching normal levels whilst trying to keep a lid on short-term costs.
Duncan McCombie, CEO of Yes Energy Solutions, said:
The approach lets us to better manage a fluctuating workload, where those working are doing some additional hours. The flexibility will allow us all to better balance the pressure on those working, support childcare responsibilities and a ease in a return to work after 100 days for those furloughed. A great addition to the options available for business leaders.

If you need any assistance with your furlough claims please contact Nicky.

6 Ways to maintain positive cash flow during and after the Corona crisis

One of the most important ways to keep your business healthy is to ensure positive cash flow. Under normal circumstances, this is not a problem, but due to the Corona crisis, it has become harder for businesses to maintain positive cash flow. For this reason, we have listed 6 ways to make sure there’s more cash coming in than going out.

Before we go down the list, we advise you to take a good look at, or make, your business’ general overview of cash outflow and overheads. On that basis, you can determine if you really need those costs or if you need to negotiate on, for instance, better utility, (cell)phone or internet deals, or better deals with suppliers. Only by taking a good look at your business expenses, you can determine where there are opportunities to improve cash flow.

1. Avoid big discounts

When sales go down, it’s easy to try and ‘solve’ the problem by offering big discounts and hope that sales go up. However, a generous discount doesn’t guarantee that sales will go up – certainly not in a crisis. What it does guarantee, is that profit will go down, which in turn will affect your cash flow negatively. On the other hand: what you could do to positively affect cash flow, is offer a small discount to clients willing to pay immediately instead, or to clients that are thinking of buying a bigger amount of your product or service.

2. Stay on top of receivables

How many outstanding accounts does your company or organisation have? And what is their total value? Chances are that it’s quite a large amount, which is bad for cash flow since it represents money that’s unavailable to you. So, to maintain positive cash flow, you should always manage your receivables closely and put some extra effort into keeping the amount of overdue money as small as possible. Especially during a crisis, every penny is worth the effort.

Especially during a crisis, every penny is worth the effort

3. Use technology to track cash flow

Staying on top of and keeping track of your business’ cash flow is key in maintaining positive cash flow. There are several ways to do this, but we advise you to use accounting software that’s specifically designed to track cash flow. In most cases, this kind of technology also offers real-time insights that’ll help you with budgeting and managing cash flow, as well as keeping an accurate account of what is coming in and going out, expected and projected cash flow, et cetera. In short: investing in the right software allows you to maintain positive cash flow.

4. Get customers to pay faster

Businesses that require customer deposits and advance payments generate cash in advance of spending cash to deliver the product or service. Therefore, structuring contracts to require pre-payments is an excellent way to enhance cash flow. Another way, as mentioned earlier, is providing incentives to customers to pay on time or early. Receivables paid in 15 days or less significantly enhance cash flow, while those paid in 60 or more days drastically decrease cash flow.

The goal is to make your monthly cash flow as smooth as possible

5. Negotiate terms with vendors and suppliers

Most businesses focus on keeping accounts receivable as low as possible, but what about maximising the potential of your accounts payable? Especially when you’re not the only business facing a crisis, it can be good to negotiate more advantageous terms or pricing with your vendors and suppliers to improve cash flow. There are several things you can do, like negotiate invoice terms, spread out accounts payable by matching payments to deliverables, or create appropriate terms that sync up with accounts receivable. The goal is to make your monthly cash flow as smooth as possible.

6. Invoice financing

If staying on top of receivables (tip 2) doesn’t pay out, you could consider financing invoices. In that case, a financial services provider pays you the amount per outstanding invoice in advance, so you don’t have to wait on the debtor’s payment. Of course, there are fees to consider, but nevertheless, staying away from cash flow problems and sleepless nights should be worth something.

In the UK almost half of all invoices are paid late, causing businesses cash flow problems

Government support to maintain positive cash flow
Due to coronavirus, the UK government has decided to help businesses manage their cash flow by offering the option to defer all VAT payments (without charging interest or penalties) due between 20 March 2020 and 30 June 2020.

Direct Debits
If you choose to defer your VAT payment as a result of coronavirus, you should cancel your Direct Debit through your bank as soon as possible so that HMRC will not automatically collect any VAT due. You can cancel online if you’re registered for online banking. You do need to reinstate the Direct Debit by 1 July 2020.

Businesses need to reinstate VAT direct debits

The deferral of VAT payments due to coronavirus comes to an end on 30 June and businesses need to take action to reinstate their direct debit mandates.

The Institute of Chartered accountants in England and Wales (ICAEW) Tax Faculty has reminded its members.

The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021.

However, ICAEW is reminding businesses that they need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due in July 2020 onwards. Any outstanding returns should be filed, and three working days should be allowed to elapse before reinstating the direct debit mandate.

HMRC will issue guidance on the end of the VAT deferral period very soon but, to be effective, direct debit mandates usually need to be set up three working days before a VAT return is filed.

We cannot set up direct debit mandates on behalf of our clients; the business needs to set up the mandate through their business tax account.

HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in MTD for VAT.

VAT paid in error during COVID-19

HMRC have recognised that some taxpayers have encountered problems when trying to take advantage of some of the COVID-19 measures, and have announced details of the procedure for taxpayers who have paid their VAT returns in error (e.g. direct debit not cancelled) when they meant to defer the payment under the COVID-19 VAT deferral easement.

A refund can be claimed if a Direct Debit was not cancelled in time.

The quickest way for customers to claim a refund is to submit a Direct Debit Indemnity Claim to their bank. When doing so they must ensure they state they want to claim a refund under the Direct Debit Indemnity Scheme (DDI). There is no time limit in making this request.

If the customer wants a repayment from HMRC rather than contacting the bank, they must ensure that their bank details are updated using the online services. Due to COVID-19 restrictions, Payable Orders are not being issued.

To confirm, it may take 21 days for the refund to be received if the Direct Debit Indemnity Claim process is not used.

If you need any assistance or support, please contact Bryan

Changes to Furlough

On Friday 29th May 2020, Rishi Sunak announced the changes that would be made to furlough leave and the CJRS (Coronavirus Job Retention Scheme).  He explained that as from 1st July, there would be a more flexible approach to furlough, to allow for part-time work whilst still benefiting from the scheme.

So, what are the changes to the furlough scheme?

June

From the 1st July, employers will only be able to claim for employees who have been on the furlough scheme for a minimum of 3 weeks previously.  This means that, from the 10th June, the scheme will be effectively be closed to employees being furloughed for the first time.  Therefore, if you want to take advantage of the scheme going forward, then you will need to furlough any new entrants by this date.

In June, employers will be able to continue claiming 80% of salary up to a maximum of £2,500 (gross) per month – including NI and pension contributions.

July

On 1st July, ‘flexible furlough’ comes into play.  Employees who are on furlough now have the ability to return to work on a part-time basis.  Any amount of working time or shift pattern can be agreed.

Employees will still receive 80% of their salary up to a maximum of £2,500 (gross) per month.  However, employers will need to pay for any hours worked and NI and pension contributions associated with these hours.  However, you can claim for hours not worked, up to a maximum of 80% of their salary or £2,500 (gross) per month.

August

From 1st August, the employer is responsible for paying ALL NI and pension contributions for hours worked and not worked.  The rest of the scheme remains the same as July.

September

From 1st September, the employee will still receive 80% of salary, up to a maximum of £2,500 (gross) per month, however, the government contribution will be a maximum of 70%. 

This means that the maximum amount an employer can claim via the CJRS is 70% of salary or a maximum of £2,187.50 (gross) per month.

Employers are expected to pay the additional 10% and all NI and pension contributions for hours worked and not worked (up to 80% or a maximum of £2,500 gross per month).

October

From 1st October, the employee will still receive 80% of salary, up to a maximum of £2,500 (gross) per month, however, the government contribution will be a maximum of 60%. 

This means that the maximum amount an employer can claim via the CJRS is 60% of salary or a maximum of £1,875 (gross) per month.

Employers are expected to pay the additional 20% and all NI and pension contributions for hours worked and not worked (up to 80% or a maximum of £2,500 gross per month).

If you would like to inquire about making a Furlough Claim, please contact Nicky@bennewith.co.uk where Nicky will be able to help you.

Second Lump Sum for Self-Employed

29 May: The Chancellor has announced a second and final grant to the self-employed who are eligible for the Self-employment Income Support Scheme (SEISS), based on 70% of earnings and capped at £6,570.

HMRC has confirmed the same eligibility criteria will be used to establish self-employed individuals’ entitlement to a further SEISS grant; the grant will be 70 rather than 80% of average earnings for three months and the maximum amount will be capped at £6,570, down from the £7,500 for the first grant. Applications will open in August and HMRC expects to publish further guidance on 12 June.

The government has not moved to extend the scheme to those who were not eligible for the first payment, for example those who started self-employment since April 2019. The Tax Faculty commented: “This decision will have been driven by the need, in order to avoid abuse, to base the grant on information that HMRC already held when the scheme was announced, with a short period in which outstanding 2018/19 returns could be filed.”

Those claiming both the first and the second grant have to confirm that they meet the eligibility criteria, in particular that their business has been adversely affected by coronavirus. HMRC’s guidance indicates that this includes being unable to work because the taxpayer is shielding, self-isolating or is on sick leave or has care responsibilities because of coronavirus. It also includes scaling down or temporarily stopping trading because the supply chain has been interrupted, the business has fewer or no customers or staff are unable to work.

SEISS (Self-Employment Income Support Scheme)

This week HMRC have started contacting self-employed customers who HMRC think could be eligible for the Self-Employment Income Support Scheme (SEISS), based on the information provided in their 2018 to 2019 tax return. They are inviting customers to use their online checker which will quickly confirm whether they are eligible and will give customers a specific date from which they can make a claim.

How we can help you
1) Ensuring you are aware you may be eligible
2) Helping you to find the details you need using the online eligibility checker on your behalf (or supporting you to use it yourselves)
3) Talking you through why you may or may not be eligible.

As an agent we won’t be able to make a claim on behalf of our clients.
Designing a scheme that enabled agents to apply on behalf of clients would have taken substantially longer to deliver, at a time when speed is the priority. Instead, HMRC have designed the scheme to be as simple as possible for customers to use, and they will calculate the amount a customer is entitled to based on the information they already hold.

How to use the checker
To use the online checker, you or us as your Accountant, on your behalf, will need the Individual’s Unique Taxpayer Reference Number and National Insurance Number. If you are eligible, you will be given a date, between 13 and 18‌‌ May, from which you can apply. This date is assigned randomly to help HMRC manage demand on the service, making sure that everyone who needs to make a claim can do so. You will also be asked to provide your Government Gateway credentials (user ID and password) and check that your bank and contact details are up to date. This is important so that HMRC can remind you by email or text message when it’s your turn to make a claim. If you don’t have Government Gateway credentials, you can set those up simply if you follow HMRC’s guidance and use the SEISS eligibility checker.

There will be no requirement for customers to wait for pins or codes through the post.

Please use the SEISS eligibility checker and get your Government Gateway credentials now if you don’t already have them. This will make applying for the grant quicker and easier when it is your time to apply.

The application process
When the application process goes live on 13‌‌ May, we can continue to support our clients although we cannot complete the claim on your behalf. The application process will show how HMRC has calculated the grant you may be due to receive. You will be able to share this calculation with us. If you, or us, wish to seek a review of this calculation, we can do so on behalf of you as our client. It’s important to note that, according to HMRC, the checker has an extremely high accuracy rate as they use the data you or us has previously provided HMRC with. If you, or us still wish to request a review, HMRC will look at your case from 18‌‌ May and they will explain your eligibility by the end of May.
 
Further information
HMRC’s phone lines will be very busy over the next couple of weeks.

A word about scams
HMRC are aware of an increase in scam emails, calls and texts. Eligible customers will be invited to claim through GOV‌.UK – it is the only service they can use. If someone gets in touch with your claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, you should not respond. It is a scam. Suspicious emails claiming to be from HMRC should be reported to them by sending them to phishing@hmrc.gov.uk. Texts should be sent to 60599.

Positive Cash Flows during COVID 19

Ways for businesses to keep a positive Cash Flow During COVID-19

One of the most important ways to keep your business healthy is to ensure positive cash flow. Under normal circumstances, this is not a problem, but due to the Corona crisis, it has become harder for businesses to maintain positive cash flow. For this reason, we have listed 6 ways to make sure there’s more cash coming in than going out.

Before we go down the list, we advise you to take a good look at, or make, your business’ general overview of cash outflow and overheads. On that basis, you can determine if you really need those costs or if you need to negotiate on, for instance, better utility, (cell)phone or internet deals, or better deals with suppliers. Only by taking a good look at your business expenses, you can determine where there are opportunities to improve cash flow.

1. Avoid big discounts

When sales go down, it’s easy to try and ‘solve’ the problem by offering big discounts and hope that sales go up. However, a generous discount doesn’t guarantee that sales will go up – certainly not in a crisis. What it does guarantee, is that profit will go down, which in turn will affect your cash flow negatively. On the other hand: what you could do to positively affect cash flow, is offer a small discount to clients willing to pay immediately instead, or to clients that are thinking of buying a bigger amount of your product or service.

2. Stay on top of receivables

How many outstanding accounts does your company or organisation have? And what is their total value? Chances are that it’s quite a large amount, which is bad for cash flow since it represents money that’s unavailable to you. So, to maintain positive cash flow, you should always manage your receivables closely and put some extra effort into keeping the amount of overdue money as small as possible. Especially during a crisis, every penny is worth the effort.

Especially during a crisis, every penny is worth the effort

3. Use technology to track cash flow

Staying on top of and keeping track of your business’ cash flow is key in maintaining positive cash flow. There are several ways to do this, but we advise you to use accounting software that’s specifically designed to track cash flow. In most cases, this kind of technology also offers real-time insights that’ll help you with budgeting and managing cash flow, as well as keeping an accurate account of what is coming in and going out, expected and projected cash flow, et cetera. In short: investing in the right software allows you to maintain positive cash flow.

4. Get customers to pay faster

Staying on top of and keeping track of your business’ cash flow is key in maintaining positive cash flow. There are several ways to do this, but we advise you to use accounting software that’s specifically designed to track cash flow. In most cases, this kind of technology also offers real-time insights that’ll help you with budgeting and managing cash flow, as well as keeping an accurate account of what is coming in and going out, expected and projected cash flow, et cetera. In short: investing in the right software allows you to maintain positive cash flow.

The goal is to make your monthly cash flow as smooth as possible

5. Negotiate terms with vendors and suppliers

Most businesses focus on keeping accounts receivable as low as possible, but what about maximising the potential of your accounts payable? Especially when you’re not the only business facing a crisis, it can be good to negotiate more advantageous terms or pricing with your vendors and suppliers to improve cash flow. There are several things you can do, like negotiate invoice terms, spread out accounts payable by matching payments to deliverables, or create appropriate terms that sync up with accounts receivable. The goal is to make your monthly cash flow as smooth as possible.

6. Invoice financing

If staying on top of receivables (tip 2) doesn’t pay out, you could consider financing invoices. In that case, a financial services provider pays you the amount per outstanding invoice in advance, so you don’t have to wait on the debtor’s payment. Of course, there are fees to consider, but nevertheless, staying away from cash flow problems and sleepless nights should be worth something.

In the UK almost half of all invoices are paid late, causing businesses cash flow problems

Government support to maintain positive cash flow
Due to coronavirus, the UK government has decided to help businesses manage their cash flow by offering the option to defer all VAT payments (without charging interest or penalties) due between 20 March 2020 and 30 June 2020.

Direct Debits
If you choose to defer your VAT payment as a result of coronavirus, you should cancel your Direct Debit through your bank as soon as possible so that HMRC will not automatically collect any VAT due. You can cancel online if you’re registered for online banking.

More info

Note: Because of the Coronacrisis, financial support from the government is available to businesses. Do keep in mind that this isn’t always a gift, so you should put aside money to be able to refund it in the future.