Supporting businesses impacted by COVID-19

3 min read

In an interconnected global economy, the new coronavirus (also known as COVID-19) is affecting UK businesses and their operations. It has resulted in restrictions on travel and public gatherings, as well as supply chain disruptions and market uncertainty. We share some practical steps you can take to help manage the impact of COVID-19 on your business.

This page is updated regularly to give the latest news and resources for business owners. We’ve pooled together all our experts’ advice and sources of support together in one place. This should make it easier for you to find useful information and to know what your next steps are at this challenging time.

Keep up to date with the latest developments and advice        

You can read the latest guidance and advice to businesses on the GOV.UK website. The CBI have also published detailed guidance on their website.

Have a plan

In case all or some of your workforce have to self isolate put together a plan as to how you will manage this process now.  Here are a few practical things to consider:

  1. How will you communicate to your customers what is happening
  2. Can you divert your phone system
  3. How will the workforce communicate with each other if working from home
  4. Do you have up to date contact details for all your workforce
  5. If staff would need to connect to a computer network remotely check they can do this now
  6. Is it possible to split departments and segregate from one another to reduce the risk that everyone in a single department is affected  

Keep your staff informed

Firstly, keep everyone updated as to what you are doing to reduce the risk of exposure in the workplace.  Ensure everyone knows what they should do in the event that they do experience symptoms.

To avoid uncertainty you should also communicate to your staff the company sickness policy and how this would apply in different circumstances.

Financial support for businesses

The Government announced in the Budget a number of measures they are introducing to support businesses that are affected by COVID-19.

These include:

  • a statutory sick pay relief package for SMEs
  • a Business Rate Relief for small businesses and pubs
  • small business grant funding of £3,000 for all business in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief
  • the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
  • the HMRC Time To Pay Scheme

Full details can be found on the GOV.UK website

Struggling to pay your tax because of COVID-19

If you are having difficulty or believe you will have difficulty paying your taxes on time HM Revenue & Customs have set up a new Coronavirus helpline.

Where possible you should call HMRC before the tax liability falls due to discuss a payment plan.  If you do not contact HMRC and don’t settle your liabilities on time you may incur a penalty.  HMRC Coronavirus Helpline – Telephone: 0800 015 9559

Sick pay for Self-Employed

For the self employed who find themselves out of work or have to self isolate, it is now simple to make a claim for Universal Credit or Contributory Employment and Support Allowance. https://www.gov.uk/employment-support-allowance

Coronavirus Business Interruption Loan Scheme

For the Business Interruption Loan schemes contact your bank as they will be the lenders that administer the loans. You can find out more information on the British Business Bank website. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

Government launches coronavirus business support finder tool

The Government have launched a new tool to help businesses quickly and easily identify what support is available to them during the COVID-19 pandemic.

You can find the tool at: https://www.gov.uk/business-coronavirus-support-finder

The Future Fund

HM Treasury have published details of a new scheme called the Future Fund.  This new scheme, which is set to go live in May, is aimed at start-up high growth businesses which rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.  The Government will issue convertible loans of between £125,000 and £5,000,000, which need to be matched by private investment.

The scheme, when launched, will be run in partnership with the British Business Bank.

Full terms of the loans and eligibility can be found at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/880119/Convertible_Loan_Key_Terms_-__Final_Version_.pdf

Self-Employment Income Support Scheme (SEISS) Going Live

HMRC have announced that the scheme will be open on 13 May with the first claims being paid into bank accounts on 25 May or within six working days of making a claim if later.

HMRC have already started to contact individuals that they believe may be entitled to claim.    

It is possible to check your eligibility by using HMRC’s online checker.  You will need your Unique Tax Reference (UTR) Number and National Insurance Number.  Once you have checked your eligibility you will be given a date as to when you should make your claim.

Those who are eligible will be able to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits), paid in a single instalment.

Full details of the scheme can be found here.

Budget Highlights

2 min read

Chancellor Rishi Sunak unveiled his first budget on 11 March 2020. Our summary focuses on the range of tax and financial measures which may affect you.

Entrepreneurs’ relief lifetime allowance reduced to £1m

It had been widely reported that the chancellor would abolish the generous relief where gains on certain qualifying shares and business assets are only taxed at 10%. Instead the lifetime limit on gains that can attract the relief has been reduced from £10M to £1M. In effect we have come full circle as Gordon Brown introduced the relief with a £1M limit in 2008.

Pension tapered annual allowance raised

The chancellor has raised the pension tapered annual allowance threshold in response to reports that senior medical NHS staff were restricting their hours due to large, and often unexpected, tax bills being incurred.

From 2020/21 the threshold income at which the tapered annual allowance needs to be considered is being raised from £110,000 to £200,000.

Many higher earners will now be able to take advantage of the full £40,000 annual allowance for pension contributions.

Various new measures in response to Coronavirus

New measures announced included the following:-

A £3,000 cash grant for businesses that qualify for small business rates relief

100% discount on business rates for retailers and businesses in the hospitality and leisure sectors where the rateable value of the property is less than £51,000

A dedicated helpline (0800 0159 559) for companies and self-employed individuals who are concerned about meeting tax payments due to the Coronavirus.

The government will repay statutory sick pay paid for absences due to the Coronavirus. The refund is available to employers with fewer than 250 employees and covers absences of up to 2 weeks.

Our comprehensive Budget Summary outlines the key measures, including some of the less-publicised changes that may impact upon your business or personal finances. For a detailed overview of the 2020 Budget information, please read our 2020 Budget Summary.

How we can help

For any help or assistance with areas of taxation, business growth or development please contact us for advice.

Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. Each comment posted by third party readers/subscribers of our website on topics of tax and accounting is their personal opinion and due professional care should be taken by you before you act after reading the contents of that post. No warranty whatsoever is made that any of the posts are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

Should I buy an electric car?

3 min read

The electric car market is growing quickly, with almost 265,000 models on UK roads (December 2019). If you are thinking of making a change to your car, you now have more choice than you would have last time you went car shopping. Options such as petrol and diesel have been expanded to include hybrid and electric cars too.

The growth of electric cars

Most of the car manufacturers are prioritising a move towards electric cars. They have either an electric or hybrid version available in their range of cars for sale. If you are considering an electric car we give you guidance below.

Consider an electric car if…

 You drive less than 150 miles per day
 You have a garage or driveway
 You’re a company car driver
 You drive in central London
 You want to do your bit for the environment

Electric cars aren’t so good for…

 Regular journeys of several hundred miles
 Daily on-street charging
 Cheap purchase prices
 Towing

Government subsidies available

Every zero-emission electric car still qualifies for a £3,500 grant from the government. New and used electric car owners also benefit from a grant towards a home charger, which can recharge batteries up to three times faster than a three-pin plug.

The Office for Low Emission Vehicles provides a grant of up to £500 for most charge points for electric and plug-in hybrid cars, reducing the cost of some units to little more than £200.

Scottish electric car owners also qualify of a grant of up to £300 from the Energy Saving Trust, so many will find that their charger is free. 

Tax on electric company cars

The benefit in kind rates for company cars has meant that the popularity of company cars has dwindled over the last two decades. This could be about to change now that reduced rates are being introduced for 100% electric cars from 6th April 2020 meaning that the benefit in kind charge is negligible.

In 2019/20 the annual taxable benefit in kind on 100% electric cars was based on 16% of the list price For electric cars registered from 6th April 2020, the benefit in kind is 0% of the list price for 2020/21, 1% for 2021/22 and 2% for 2022/23.

2020/21 BENEFIT IN KIND CHARGE FOR CARS REGISTERED AFTER 5 APRIL 2020

CO2 (g/km) Electric range (miles) 2020-21 rate (%) 2021-22 rate (%) 2022-23 rate (%)
1-50 >130 0 1 2
1-50 70-129 3 4 5
1-50 40-69 6 7 8
1-50 30-39 10 11 12
1-50 <30 12 13 14

Source ICAEW

  • The employer will be due to pay class1 A NIC which is set at 13.8% of the benefit in kind (this is tax deductible).
  • The employer can also claim tax relief for the costs of insurance and maintenance.
  • In addition to the above, the employer can also provide charging facilities at the company premises free of charge which will be a tax free benefit for employees.

Capital Allowances

A further attractive tax relief for the employer is that, if the car is purchased rather than leased, they can offset the entire cost of an electric vehicle against corporation tax in the year of purchase.

HMRC has shared a handy tool calculator to work out the estimated cost of the vehicle to both the employer and the employee.

Business Mileage Payments

If charging facilities are not available at their workplace an employees can be paid a tax free mileage rate of 4p per mile.

How we can help

If you would like help with deciding whether to buy an electric car, the team at Loucas can assist you. Do contact us if you would like any further help or advice in this area.

For more advice, read our article on Buy, HP or lease.

Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. Each comment posted by third party readers/subscribers of our website on topics of tax and accounting is their personal opinion and due professional care should be taken by you before you act after reading the contents of that post. No warranty whatsoever is made that any of the posts are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

Capital Gains Tax

2 min read

Previously, disposals of UK residential properties are reported and any capital gains tax (CGT) calculated through your Self-assessment Tax Return.  The tax is therefore due for payment on the 31st January following the tax year of disposal.

What is changing?

This will all change for disposals of UK residential property after 6th April 2020 (the date of disposal is normally deemed to be the date of exchange). For these disposals, they must be reported to HM Revenue and Customs and the Capital Gains Tax paid within 30 days of the date of completion via the Capital Gains Tax on UK residential property service.

There is an exemption for the disposals where there is no tax to pay. Typically, these include properties that are covered by the main residence exemption; gains within the individual’s capital gains exemption or where there are losses from earlier capital disposals that reduce the gain below the exemption.

It is therefore vital to start collating information to compute the gain as soon as a disposal is anticipated.  In some cases, a disposal may require professional valuations to be obtained.

CGT liability

There are penalties for late filing of the information and payment of the Capital Gains Tax which follow the same rules as for self-assessment.

For those that do not normally file a Self-assessment Tax Return, there would be no need to do so in respect of the disposal. For those that do, they will need to disclose the gain on the Self-assessment Return as well.

When filing through the Capital Gains Tax in UK residential property service the tax payable is, in many cases, likely to be an estimated as it is not known the total income will be for the year or there may be later capital disposals the at affect the amount payable. The tax is therefore treated as a payment on account of the final liability which will be finalised either as an amendment via new service or disclosure of the final position on a self-assessment Tax Return.

The new rules apply to individuals, personal representatives and trustees.

How we can help

We are always on hand to answer any questions you may have about Capital Gains Tax. We can advise as to the best course of action in your own particular circumstances, so please do contact us.

Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. Each comment posted by third party readers/subscribers of our website on topics of tax and accounting is their personal opinion and due professional care should be taken by you before you act after reading the contents of that post. No warranty whatsoever is made that any of the posts are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.