What are Self-Assessment Tax Returns in the UK?
In this post we have explain about the Self Assessment tax returns. Read the complete post for more information.
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Amidst coronavirus pandemic, the chancellor, Rishi Sunak has set out a relief package. This temporary and timely package consists of targeted measures to support people, businesses and public services.
The main points that are covered in this package include the following measures:
The ‘Coronavirus Job Retention Scheme’ is offered to whose business operations have been affected by COVID-19. This is a temporary scheme for at least 3 months that is open for all UK employers. The scheme starts from 1 March 2020 to support businesses.
This scheme is for those employers who have a PAYE payroll scheme until 28th February 2020.
Under this scheme, employers can claim 80% of furloughed employees’ usual monthly wage costs. This amount is set up to £2,500 per month including the minimum automatic enrolment employer pension contributions and associated Employer National Insurance contributions on that wage. Employers can get benefit from this scheme during the 3 months period.
The government is supporting the businesses by deferring the VAT payments for a period of 3 months. This is for businesses that are VAT registered in the UK who are due to pay the dues between 20th March 2020 and 30th June 2020. Such businesses can choose one of the below options.
This facilitation is for businesses that are due for self-assessment payments by 31st July 2020. Businesses who are facing difficulty in making payments due to the coronavirus pandemic may defer their payments until next year i.e. January 2021.
All the businesses who are due to pat their second self-assessment payments are eligible for this. However, this deferment is not obligator and if you can pay the payment, you should do so by 31st July.
This scheme is for self-employed individuals who are unable to earn a livelihood due to the COVID-19 pandemic. Members of a partnership can also benefit from the Self-employment Income Support Scheme.
Under this scheme, self-employed individuals can claim 80% of their trading profits through a taxable grant. You can get a maximum monthly amount of £2,500 during the next 3 months. The UK government may extend the scheme depending on the situation.
The UK government is planning to bring forward a Statutory Sick Pay (SSP) scheme for businesses. All the small and medium businesses could reclaim Statutory Sick Pay (SSP) under this scheme that they have paid due to the Coronavirus. The eligibility criteria to avail this scheme is expected to be as follow:
This scheme will be available for the businesses that are:
A) Business Rates Holiday for Leisure, Hospitality and Retail Businesses
The UK government has a plan to introduce business rates for leisure, hospitality and retail business for the tax year of 2020 to 2021.
The eligibility criteria for the business rates will be as followed.
The eligible properties for this scheme will be those properties that are mainly in use for:
B) Cash Grants for Leisure, Hospitality and Retail Businesses
The government has set a Retail and Hospitality Grant Scheme for businesses that are in the leisure, hospitality and retail sectors. This is a cash grant that will be given to the businesses per property up to £25,000.
A grant of £25,000 will be for those businesses who have a property in these sectors with a rateable value of less than £51,000 but over £15,000.
Similarly, a grant of £10,000 is for those businesses who have a property in these sectors with a rateable value of up to £15,000.
Businesses are eligible for this grant if they are:
The eligible properties for this scheme will be those properties that are mainly in use for:
For nurseries in England, the UK government is going to introduce business rates holiday for the tax year of 2020 to 2021.
To avail the support for nursery business rates holiday, you should be:
Only those properties can benefit from the nursery support scheme that are:
The UK government is going to provide additional funding under the Small Business Grant Scheme. This grant is for local authorities to help and support those small businesses that are paying little or no business rates due to tapered relief, rural rate relief (RRR) and small business rate relief (SBRR).
This is a £10,000 one-off grant for eligible businesses so that they can meet their ongoing business expenses.
Businesses are eligible for this grant if they are:
The government has introduced the temporary Coronavirus Business Interruption Loan Scheme for small and medium-sized enterprises. This is a support for SMEs which will give them access to asset finance, invoice finance overdrafts and loans. The UK government has set an up to £5 million grant for SEMs up to a period of 6 years.
The government is also going to make a ‘Business Interruption Payment’ for covering any lender-levied fees and interest payments for the first 12 months. In this manner, the smaller businesses are going to benefit from lower initial repayments and no upfront costs.
In order to give lenders confidence, the UK government will offer a guarantee of 80% to the lenders on each loan. This will also encourage lenders to offer finance to SMEs. This scheme will be backed by the British Business Bank and will be delivered through commercial lenders.
The ‘Coronavirus Large Business Interruption Loan Scheme’ (CLBILS) is s financial support from the UK government for large businesses. Under this scheme, the bank will offer loans to large businesses with an 80% governmental guarantee.
Firms with an annual turnover of between £45 million and £500 million can take loans of up to £25 million under this business support scheme. Facilities will be offered at commercial rates of interest backed by a guarantee under CLBILS. In this way, large businesses affected by the coronavirus could get easy loans from the banks.
Commercial lenders are expected to deliver financial assistance under this scheme. Businesses that would be unable to access the much-needed finances could get loans with an 80% governmental guarantee on individual loans. However, the government expects that the lender will conduct the credit risk checks before making such loans.
This scheme is to help those large businesses that were seeking growth before the coronavirus pandemic but are now going through cash flow problems. This grant aims to offer relief to such firms so that they can get through this difficult time of growth.
The UK government will launch this new scheme for large businesses later this month. A wide range of businesses could access finance products under this grant including asset finance, invoice finance, overdrafts and short term loans. However, businesses would be responsible to repay any facilities they have taken out.
In order to get CLBILS grant, you must be:
You must also have a lending proposal which the banks (lender) should:
All large businesses can apply for this grant, except:
Further eligibility information on this grant will be confirmed with the introduction of the scheme.
The Bank of England will make an acquisition of short term debt under the new COVID-19 Corporate Financing Facility from larger companies. This will enable large firms to finance short-term liabilities if they have been hurt by a short-term funding squeeze.
In this way, the Bank of England will ease the supply of credit and will support the overall corporate finance markets.
The criteria will be set out by the Bank of England and non-financial companies that fulfill the criteria could get benefit from the COVID-19 Corporate Financing Facility.
The HMRC’s Time To Pay service will provide support for the tax affairs to the people and companies. This support program is for those self-employed people and businesses that have outstanding tax liabilities but are now in financial distress.
The HMRC will handle the matters on a case-by-case basis. Each case will be tailored to liabilities and individual circumstances.
You are eligible for ‘Time to Pay Service’ if your business:
Most commercial insurance policies don’t cover unspecified notifiable diseases or pandemics. However, some businesses have insurance policies that cover unspecified notifiable disease and government-ordered closure or pandemics and government-ordered closure. These businesses can make insurance claims depending on the terms and conditions against which they have such policies.
However, the terms and conditions for insurance policies vary significantly. Businesses should check and verify the terms and conditions of their insurance providers.
Notifiable Diseases
These are certain infectious diseases that should be notified to the ‘proper officer.’ All the medical practitioners are bound by the law to report suspected patients to the local health protection team or local council. The UK government has an updated list of such infectious disease and the COVID-19 was added to this list on 5 March 2020.
Insurance agents or providers use notifiable diseases as triggers for exclusion or activation of insurance cover. For example, if you have a policy that covers notifiable diseases, it’ll only cover a certain set of notifiable diseases such as Anthrax or Cholera.
The insurers usually reference such a subset while documenting such a policy. These policies generally don’t include the notifiable diseases that aren’t present on the insurers' list or other unknown diseases such as the coronavirus. So, insurers charge the price for policies that are modelled against the risk of enlisted diseases.
Unspecified Notifiable Diseases
Some businesses may also have insurance policies with add-ons that cover ‘unspecified notifiable diseases’. Such insurance policies usually cover all the enlisted notifiable diseases for businesses. In addition, these policies also cover the businesses from the diseases that are not enlisted and were unknown when the policy was written.
A business that has such an insurance policy can make a claim to cover the COVID-19 losses. The fact that the UK government has added the coronavirus to the list makes the business eligible for a claim. However, terms and conditions of such a policy would be applicable to the claim.
Government ordered closure
From 21st March to onwards, the UK government has closed a number of businesses and venues. Insurers also agree at this point with the government and think that these instructions are sufficient for those whose businesses are covered for COVID-19 losses.
Under current circumstances, no intervention is required to trigger the cover either by the police or any other statutory body. However, most businesses aren’t covered for COVID-19 under commercial insurance policies. The government is encouraging businesses to contact insurance providers to check the terms and conditions of their insurance policies.
Event Coverage
Businesses who have unspecified notifiable disease extensions and event cancellation policies are can also file claims. Such businesses can claim for the disruption, postponement, curtailment, abandonment and unavoidable cancellation for reasons that are beyond the control of participants and organizers. However, such claims are subjected to other exclusions and terms.
Businesses should contact their broker or insurer in order to check the terms and conditions of their policies. This is more important for major events as their insurance is often tailored to specific events.
The UK government has also announced an eviction protection policy for commercial tenants during the coronavirus pandemic. Owners are prohibited to evict commercial tenants that are unable to pay their rent due to COVID-19. This also means that no business will be forced out of their locations and neither businesses will forfeit their lease in case they miss the rent.
The eviction protection is viable until 30 June and this period may be extended depending on the situation. However, the commercial tenants are still accountable to pay their dues and payments and they only have the eviction protection if they don’t have the money to pay the dues.
The eviction protection is for the commercial tenants residing in England, Wales and Northern Ireland.
The Business Improvement Districts (BIDs) can extend the maximum duration till 31 March 2021 due to COVID-19. The UK government has extended all the BID ballots that are due to take place in 2020. This step is taken to enable the local authorities and BIDs to focus their efforts on the coronavirus situation instead of administrating the ballot process.
This applies to all the BIDs in England who are supposed to take out the ballot process until 31 December 2020.
The UK government has taken these necessary steps to support people, businesses and public services. However, the measures may change depending on the situation and your financial situation. Also, your access to these grants or schemes may differ if you or your business is located in Scotland, Wales or Northern Ireland.
In this post we have explain about the Self Assessment tax returns. Read the complete post for more information.
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