fpdteam, Author at Bennetts Accountancy

Reminder of Statutory Sick Pay pay-back scheme

6th January 2022 by fpdteam

The Coronavirus Statutory Sick Pay Rebate Scheme for small and medium-sized businesses and employers, enables them to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The online service closed for new claims after 30 September 2021.

However, following the new Omicron wave, the online claims service is to be reintroduced from mid-January. The government announced before the Christmas break that firms will be re-eligible for the scheme from 21 December 2021 and will be able to make claims retrospectively once the claims service is relaunched.

The scheme covers up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19. Employers are eligible for the scheme if their business is UK based, small or medium-sized and employs fewer than 250 employees. Under the scheme, the Government will cover the cost of SSP for Covid-related absences qualifying employers across the UK.

Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online or a ‘shielding note’ / letter from their doctor or health authority advising them to shield because they’re at high risk of severe illness from coronavirus.

Source:HM Revenue & Customs| 03-01-2022

Points to consider when valuing goodwill

6th January 2022 by fpdteam

Valuing goodwill is a complex process and there are many different methods which can be used and that vary from industry to industry. Goodwill is a way of placing a monetary value on the business's reputation and customer relationships. Or as HMRC say in their guidance, in accounting terms, purchased goodwill is the balancing figure between the purchase price of a business and the net value of the assets acquired.

HMRC’s approach to valuation of goodwill suggests that there should be no expectation of a synergy-based value on an open market value basis unless synergy in a particular market is common place.

HMRC’s manuals state that when valuing the goodwill of a business the valuer should have regard to the following:

the full sale and purchase documentation relating to the transfer of both tangible and intangible assets
succession arrangements
the valuation approach used – e.g., capitalisation of profits, super profits or a trade specific method
the activities of the business and role of the owners within it
the financial statements/accounts (including the detailed trading and profit and loss account) for the 3 years before valuation
any other relevant financial information
appropriate yield and multiples of comparable companies and sectors
the commercial and economic background at valuation date
how the personal goodwill of the owner has been reflected in the valuation
any other relevant factors.

Source:HM Revenue & Customs| 03-01-2022

New powers for Insolvency Service

6th January 2022 by fpdteam

The Insolvency Service is a government agency that provides services to those affected by financial distress or failure. The Insolvency Service operates as an executive agency of the Department of Business, Energy and Industrial Strategy (BEIS).

The Insolvency Service has been granted new powers to investigate and disqualify company directors who abuse the company dissolution process. This extends investigatory powers to directors of dissolved companies and if misconduct is found, directors can face sanctions including being disqualified as a company director for up to 15 years or, in the most serious of cases, prosecution. The measures have been introduced under a new Act that received Royal Assent on 15 December 2021.

The Act will also mean the Business Secretary is able to apply to the court for an order to require a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to their fraudulent behaviour.

Source:Other| 03-01-2022

Will you need to pay-back Child Benefits?

6th January 2022 by fpdteam

The High Income Child Benefit charge applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of child benefit. The charge claws back the financial benefit of receiving child benefit either by reducing or removing the benefit entirely.

If you or your partner have exceeded the £50,000 threshold for the first time during the last tax year (2020-21) then you must act. Where both partners have an income that exceeds £50,000, the charge applies to the partner with the highest income.

Taxpayers who continue to receive child benefit (and earn over the relevant limits) must pay any tax owed for 2020-21 on or before 31 January 2022. The child benefit charge is charged at the rate of 1% of the full child benefit award for each £100 of income between £50,000 and £60,000. For taxpayers with income above £60,000, the amount of the charge will equal the amount of child benefit received.

If the High Income Child Benefit charge applies to you or your partner it is usually worthwhile to claim Child Benefit for your child, as it can help to protect your State Pension and will make sure your child receives a National Insurance number. However, you still have the choice:

to keep receiving child benefit and pay the tax charge or
elect to stop receiving child benefit and not pay the charge.

Source:HM Revenue & Customs| 03-01-2022

Self-certified sick notes

6th January 2022 by fpdteam

The statutory sick pay rules were temporarily amended on 17 December 2021. The amendment allows employees to self-certify for a period of 28 days, in place of the normal 7 days. This measure has been put in place to help free up capacity in the NHS and allow GPs to spend more time focusing on the coronavirus booster rollout as well as other impacts brought on by the latest Omicron fuelled coronavirus wave.

The arrangements will remain in place for all absences that begin on or before 26 January 2022. The arrangements also apply retrospectively for any continuing periods of absence which started between 10 and 17 December 2021. The self-certification period is set to return to seven days for any absences beginning on or after 27 January 2022. GPs will continue to be required to supply medical evidence known as, fit notes, for periods of absence exceeding 28 days.

The current rate of Statutory Sick Pay (SSP) is £96.35 per week for up to 28 weeks. To qualify for SSP, an employee must meet the necessary eligibility requirements. Employers cannot pay less than the SSP but may pay more if they have a sick pay scheme.

Source:HM Government| 03-01-2022

Beware online sales scams

6th January 2022 by fpdteam

A new government press release has been issued reminding the public that online sales scams continue to be a major issue. In fact, 2021 saw a record number of cyber-attacks and online scams.

Action Fraud, the national reporting centre for fraud and cyber-crime, has revealed that almost 100,000 people in the UK have fallen victim to online shopping fraud in the past 13 months. This has seen over £60 million being reported lost.

The National Cyber Security Centre (NCSC) is encouraging people to shop online securely by following five actionable steps:

Keeping accounts secure – strong and separate passwords should be used for the most important online accounts, including email, banking or payment accounts (such as PayPal). The NCSC recommends using three random words to create a password. Turning on two-step verification can add an extra layer of protection.
Be aware of emails, text messages or websites that look too good to be true or suspicious – many scammers set up fake messages designed to steal financial and personal information. Members of the public can report suspicious messages to the NCSC via text to 7726 and email to report@phishing.gov.uk.
Choose online retailers carefully – research stores before buying to confirm they are legitimate – check via trustworthy consumer websites. Certain emails or texts regarding "too good to be true" offers may contain links to fake websites. If unsure, don’t use the link.
Use a credit card for online payments if possible – most major credit card providers protect online purchases and are obliged to refund individuals in certain circumstances.
Only provide enough details to complete a purchase – only fill in the mandatory details on a website when shopping online (often marked with an asterisk).

Source:Cabinet Office| 03-01-2022

Further changes to customs issues from 1 July 2022

23rd December 2021 by fpdteam

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all other international destinations.

A number of easements had been put in place to help ensure a smooth transition for goods coming from the EU. This included a delay in the requirement for full customs declarations and controls until the end of this year.

From 1 January 2022, businesses will no longer be able to delay making import customs declarations under the Staged Customs Controls rules that have applied during 2021. This will mean that most businesses will have to make declarations and pay relevant tariffs at the point of import.

However, the introduction of some declarations has been deferred until 1 July 2022. These include:

requirements for full safety and security declarations for all imports
new requirements for Export Health Certificates
requirements for Phytosanitary Certificates
physical checks on sanitary and phytosanitary goods at Border Control Posts

Source:HM Revenue & Customs| 20-12-2021

A reminder – HMRC’s badges of trade

23rd December 2021 by fpdteam

The 'badges of trade' tests whilst not conclusive are used by HMRC to help determine whether an activity is a proper economic trade / business activity or merely a money-making by-product of a hobby.

The approach by the courts in using the badges of trade has been to decide questions of trade on the basis of the overall impression gained from a review of all the badges.

HMRC will consider the following nine badges of trade as part of their overall investigation as to whether a hobby is actually a trade:

Profit-seeking motive
The number of transactions
The nature of the asset
Existence of similar trading transactions or interests
Changes to the asset
The way the sale was carried out
The source of finance
Interval of time between purchase and sale
Method of acquisition

Even if HMRC consider that the activities in question are a trade, taxpayers can make up to £1,000 per year tax-free by claiming the trading allowance.

Source:HM Revenue & Customs| 20-12-2021

BOE advises government on inflation hike to 5.1%

23rd December 2021 by fpdteam

The current Governor of the Bank of England, Andrew Bailey, has written to the Chancellor of the Exchequer, Rishi Sunak. The letter was dated 16 December 2021 and has been uploaded to GOV.UK. The correspondence related to the recently published figures from the Office for National Statistics (ONS) showing a significant increase in inflation to 5.1%.

The letter addresses the following:

the reasons why inflation has moved away from the 2% target, and the outlook for inflation;
the policy action that the MPC is taking in response;
the horizon over which the MPC judges it is appropriate to return inflation to the target;
the trade-off that has been made by the MPC with regard to inflation and output variability in determining the scale and duration of any expected deviation of inflation from the target; and
how this approach meets the Government’s monetary policy objectives.

CPI inflation is expected to remain around 5% through the majority of the winter period, and peak at around 6% in April 2022.

Source:HM Treasury| 20-12-2021

Pay your tax bill by instalments

23rd December 2021 by fpdteam

Businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

An online payment plan for Self-Assessment tax bills can be used to set up instalment arrangements for paying tax liabilities up to £30,000. Taxpayers that qualify for a Time to Pay arrangement using the self-serve Time to Pay facility online, can do so without speaking to an HMRC adviser. The service will create a bespoke monthly payment plan based on how much tax is owed and the length of time needed to pay. The service was used by over 123,000 taxpayers for the 2019-20 tax year to spread the cost of over £460m in tax.

Taxpayers that want to use the online option for their 2020-21 tax return must meet the following requirements:

have filed their tax return for the 2020-21 tax year
owe less than £30,000
be within 60 days of the payment deadline of 31 January 2022
plan to pay their debt off within the next 12 months or less

Taxpayers with Self-Assessment tax payments that do not meet the above requirements need to contact HMRC to request a Time To Pay arrangement. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

HMRC will usually offer taxpayers the option of extra time to pay if they think they genuinely cannot pay in full but will be able to pay in the near future. If HMRC do not think that more time will help, then they can require immediate payment of a tax bill and start enforcement action if payment is not forthcoming.

Source:HM Revenue & Customs| 20-12-2021