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Email: info@exelaccoutancy.co.uk
Welcome to our latest monthly tax newswire. We hope you enjoy reading this newsletter
and find it useful. Contact us if you wish to discuss any issues further. Stay safe during
this difficult period.
May 2020
other words unable to work
At the time of writing we are still
during the crisis.
awaiting details of the claims
NEW “FURLOUGH”
process but HMRC have recently
The claim can also include
updated their guidance on the
SYSTEM FOR
employer’s NIC and the
calculation of “self -employed
EMPLOYEE WAGES
employers 3% auto-enrolled
profits” and “total income”.
pension contribution on the
In order to be able to make a
UP AND RUNNING
restricted amount.
successful claim the self -
employed profits in 2018/19 must
Note that company directors may
not exceed £50,000 and must be
be furloughed provided they do
more than 50% of the individual’s
The Coronavirus Job Retention
not work for the company other
total income. If that test is not
Scheme (CJRS) claims portal
than complying with their
met, then the same £50,000 and
opened on Monday 20 April and
statutory obligations. The
50% tests are applied to average
early indications are that it
furlough claim only applies to
profits and total income over the
seems to be working smoothly
their salary, not dividends.
three years (or shorter period) to
but with a few teething problems
5 April 2019.
as you would expect from a
Depending on how long the
We can of course help you
Coronavirus lockdown lasts
brand-new system.
determine whether you are
future claims should be a lot
eligible and assist you with your
more straightforward now that we
claim if required.
have more detailed guidance
from HMRC. As usual if we can
be of assistance please get in
Self-Employed Profits
touch.
HMRC guidance has defined
self-employed profits for the
MORE DETAILS ON
purposes of SEISS as turnover
SELF-EMPLOYED
for the business less allowable
business expenses and capital
GRANT SCHEME
expenditure. This figure may not
In the run up to the start of the
Like the CJRS scheme for
be the same figure as that
system there was limited detail
employers the initial HMRC
originally declared in your self-
from HMRC on what could be
guidance on the grant scheme to
assessment tax returns. If the
claimed as the initial guidance
support the self -employed and
calculation results in a trading
was rather sketchy and did not
members in partnerships was
loss the amount that is averaged
cover all situations. The
also very sketchy.
is not nil for that year but the
government also decided late on
negative result.
to change the qualifying
In outline the Self-Employed
conditions so that it would apply
Income Support Scheme
to those on the payroll at 19
(SEISS) allows the self -
Total income
March instead of 28 February to
employed to claim 80% of their
cover those employees taken on
average profits for the period up
HMRC state that total income for
in March, or so we thought. It
to 2018/19, limited to £2,500 a
the purposes of the 50% test
turned out that the employee
month, initially for a three-month
would be taxable income from all
needed to be included in an RTI
period.
sources for the relevant year
(real time information)
such as property income, bank
Like CJRS there are lots of
submission for 2019/20 by 19
interest, employment income and
conditions that need to be
March to be included.
social security income.
satisfied such as being self -
employed in 2018/19 and
Remember that CJRS allows
There are still several unknowns
continuing to trade in 2019/20
employers to claim 80% of an
but at least we now have bit
and 2020/21, or would be doing
employee’s regular pay subject
more clarity. Unlike the furlough
so if it the business had not been
to a limit of £2,500 a month if
scheme mentioned earlier the
impacted by coronavirus.
they have been “furloughed”, in
