If you are presently registered for VAT but your turnover has dropped below £83,000 you could deregister for VAT. However, you do not have to deregister.

Disadvantages and advantages of deregistration

• If you buy significant amounts of goods and services that include a VAT charge, then if you deregister you will not be able to recover any VAT charged.
• If most of your sales are zero-rated or most of your customers are registered for VAT and can recover the VAT you charge, deregistering means you will lose any recovery of input VAT on purchases and your customers will gain no advantage.
• If, however, you sell to the general public who cannot reclaim the VAT you charge, and if the VAT on your purchases is not significant, then deregistering could provide an opportunity to reduce your prices and regain a competitive advantage.

The process of deregistration is quite straightforward, but it is worth considering any knock-on effects before taking this option. Please call as we can help you crunch the necessary numbers.

Your UK residence status affects whether you need to pay tax in the UK on your foreign income. For example, non-residents only pay tax on their UK income - they do not pay UK tax on their foreign income.

Whereas UK residents normally pay UK tax on all their income, whether it’s from the UK or abroad. However, there are special rules for UK residents whose permanent home or place of domicile is abroad.

The following notes reproduced from the GOV.UK website may help you to decide if you are resident or non-resident in the UK for tax purposes:

Work out your residence status

Whether you are UK resident usually depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year).

You are automatically resident if either:

• you spent 183 or more days in the UK in the tax year
• your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year

You’re automatically non-resident if either:

• you spent fewer than 16 days in the UK (or 46 days if you have not been classed as UK resident for the 3 previous tax years)
• you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working

As with all tax rules there are grey areas. If you have any doubts regarding your tax status please contact us so we can help you decide.

As readers will no doubt be aware the present Coronavirus Job Retention Scheme is due to cease at the end of October 2020. However, there is a bonus claim that certain employers can make next year if they retain employees beyond the present 31 October 2020 deadline.

The Job Retention Bonus (JRB) is subject to its own set of rules. These are copied in below from the GOV.UK website:

Job Retention Bonus

The Job Retention Bonus allows employers to claim a one-off payment of £1,000 for every employee they have previously received a grant for under CJRS and who remains continuously employed through to the end of January 2021.

To be eligible, the employee must have received earnings in November, December and January and must have been paid an average of at least £520 per month, a total of at least £1,560 across the three months.

Employers will be able to claim the bonus after they have filed PAYE information for January 2021, and the bonus will be paid from February 2021.

More detailed guidance, including how you can claim the bonus online, will be available by the end of September.

What employers need to do now

If employers intend to claim the Job Retention Bonus, they must:

• ensure all employee records are up to date
• accurately report employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system
• make sure all CJRS claims have been accurately submitted and they have told us about any changes needed (for example if they’ve received too much or too little).

Readers who are still undecided on the position of staff when the present CJRS closes later this year will need to factor the JRB into their calculations.

Planning for staff retention or lay-offs when government support ceases without a doubt exposes employers and employees to stressful choices. Pleas call if you want to discuss your options. We can help.

Thrifty teenagers, or rather teenagers with thrifty parents, will soon gain access to their Child Trust Fund (CTFs) savings, and some, may not even know it is there…

CTFs were originally set up for children born between 1st September 2002 and 2nd January 2011, with a live Child Benefit claim. Parents and guardians received a voucher to deposit in a Child Trust Fund (CTF) account on behalf of the child.

At 16 years, the child can choose to operate their account or have their parent continue to operate it, but they cannot withdraw the funds. At 18 years of age, the CTF account matures and the child is able to withdraw money from the fund or move it to a different savings account. Over 700,000 accounts will mature each year.

The accounts are not held by HMRC, but by a number of CTF providers who are financial services firms. Anyone can pay into the account, with an annual limit of £9,000, and there’s no tax to pay on the CTF savings interest or profit.

As the earliest accounts were opened 1 September 2002, come 1 September 2020, those celebrating their eighteenth birthday will be able to access their CTF savings.

It is estimated that approximately 55,000 will mature each month – starting September 2020 – and HMRC have created a simple online tool to help young people track down where their CTF is held. Google “Find a child trust fund GOV.UK”. To use the facility, you will need to have a Government Gateway ID and password. If necessary, this can be created when you make the application.

For many eighteen year olds embarking on further education or vocational training this will provide a boost to their funding at this critical time.

Students grappling with the latest A level results will no doubt be faced with decisions regarding student loans to finance their time at university if they chose that option. There are a number of myths surrounding this source of funding and in a recent news story government attempted to dispel some of these myths. They are:

Myth: If I get a place through Clearing it’s too late to apply for student finance.

BUSTED: No, but if you haven’t applied for student finance yet, you need to apply right away. It can take up to six weeks to process your application. You might not get all of your money in time for the start of your course, but Student Finance England (SFE) will try to make sure you have at least some money as close to the start of your course as possible.

Myth: If I’ve already applied for student finance and my course changes through Clearing, I don’t have to do anything.

BUSTED: If you have already applied for student finance but want to change your course, university or college you need to update your course details to make sure that you receive your student finance at the start of term.

The easiest way to update course details is to log into your online account and choose ‘Change your application’: www.gov.uk/student-finance

Myth: I need to send my Passport and a signed terms and conditions to receive my student finance.

BUSTED: If you have an in-date UK Passport you can provide your Passport details on your online application form which will be automatically checked with the Government Identity and Passport Service. When your application has been processed you can even accept the terms and conditions using a digital e-Signature.

Myth: It takes ages to apply for student finance because my parents or partner need to send paper forms and evidence.

BUSTED: If your parents or partner are providing financial information to support your application, they can do this online and we’ll verify their information with HMRC. If you are asked to send some additional paperwork to support your application this can be uploaded from your account using the new digital evidence upload service.

Myth: There’s no information available on student finance and Clearing.

BUSTED: There’s a range of helpful tools and guidance on SFE’s student finance zone Clearing page

You can also access the SFE YouTube Clearing playlist. Don’t forget you can also contact SFE Monday to Friday from 9am-5pm and Saturday from 9am-4pm:

The government is keen to sell its Green Home Grant policy to the building trade. In a recent press release Business Secretary, Alok Sharma, said:

Tradespeople across England are urged to step forward and sign up to be able to offer services through the government’s new Green Homes Grants scheme – as over 1,000 businesses across the country have already applied to do so far.

The £2 billion Green Homes Grant Scheme will see the government fund up to two-thirds of the cost of home improvements up to £10,000 to make over 600,000 homes across the country more energy efficient, supporting over 100,000 jobs in green construction, cutting carbon emissions and helping people save money on their energy bills.

The scheme will cover green home improvements ranging from insulation of walls, floors and roofs, to the installation double or triple glazing when replacing single glazing, and low-carbon heating like heat pumps or solar thermal - measures that could help families save up to £600 a year on their energy bills.

To take part and offer their services through the scheme, all tradespeople must register with TrustMark. Where tradespeople are installing energy efficiency measures, they must also be certified to installation standards. To install low carbon heat measures, tradespeople must be TrustMark registered and certified through the Microgeneration Certification Scheme for the relevant heating technology.

Anyone wishing to do so can simply register with TrustMark via their website, with accreditation taking as few as 5 working days for those who already have membership of a recognised trade body such as the Federation of Master Builders, the Cavity Insulation Guarantee Agency and Building Engineering Services Association, or who are already certified under the Microgeneration Certification Scheme.

It is tempting to assume that government departments are drawing back from exercising their powers to challenge taxpayers due to COVID disruption, but it would be unwise to assume this is the case. For example, in a recent legal action undertaken by the Insolvency Service, a construction boss was banned from running companies for nine years after he caused a company to submit false tax returns.

Although the charges related to activity that pre-dated the coronavirus outbreak, this action – and many others reported by HMRC and other government departments – confirms that the powers-that-be are not idle.

In the above case, investigators uncovered that between November 2011 and February 2015, the director knowingly caused the company to submit false tax returns. Invoices had been brought down to zero rated sales to reduce the company’s tax liability. The tax authorities determined that just over £225,000 was owed by the company, which increased to more than £426,000 when interest and penalties were applied for the deliberate concealment and failure to pay.

A voluntary undertaking has the effect that without specific permission of a court, a person with a disqualification cannot:

• act as a director of a company
• take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
• be a receiver of a company’s property

Deliberate attempts to evade tax will always be pursued as and when the authorities discover the wrong-doing.

However, we all make mistakes and HMRC will be sympathetic if you can offer a reasonable excuse for any apparent transgressions. These reasonable excuses might include:

• your partner or another close relative died shortly before the tax return or payment deadline
• you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
• you had a serious or life-threatening illness
• your computer or software failed just before or while you were preparing your online return
• service issues with HM Revenue and Customs (HMRC) online services
• a fire, flood or theft prevented you from completing your tax return
• postal delays that you could not have predicted
• delays related to a disability you have

You could probably add to this published listing disruption created by the COVID outbreak.

Easing back from lock-down

Boris Johnson made his long-awaited statement on the government’s plans to ease lock-down (7pm, Sunday 10 May 2020). No great surprises and we have included a brief business-related summary in this post.

In his address he said:

And the first step is a change of emphasis that we hope that people will act on this week.

We said that you should work from home if you can, and only go to work if you must.

We now need to stress that anyone who cannot work from home, for instance those in construction or manufacturing, should be actively encouraged to go to work.

And we want it to be safe for you to get to work. So, you should avoid public transport if at all possible – because we must and will maintain social distancing, and capacity will therefore be limited.

So, work from home if you can, but you should go to work if you cannot work from home.

And to ensure you are safe at work we have been working to establish new guidance for employers to make workplaces COVID-secure.

And when you do go to work, if possible do so by car or even better by walking or bicycle. But just as with workplaces, public transport operators will also be following COVID-secure standards.

There are copious instructions for employers, on safeguarding the workplace, and these can be found on the gov.uk website.

On your bike…

Last week the government announced a £2bn package to create a new era for cycling and walking.

As walking and cycling are two of the most effective ways to get from A to B whilst respecting social distancing measures, this announcement is good news.

In the news story published at the time of the announcement, changes to be undertaken are summarised as follows:

Following unprecedented levels of walking and cycling across the UK during the pandemic, the plans will help encourage more people to choose alternatives to public transport when they need to travel, making healthier habits easier and helping make sure the road, bus and rail networks are ready to respond to future increases in demand.

The government will fund and work with local authorities across the country to help make it easier for people to use bikes to get around - including Greater Manchester, which wants to create 150 miles of protected cycle track, and Transport for London, which plans a “bike Tube” network above Underground lines.

Fast-tracked statutory guidance, published today and effective immediately, will tell councils to reallocate road-space for significantly increased numbers of cyclists and pedestrians. In towns and cities, some streets could become bike and bus-only while others remain available for motorists. More side streets could be closed to through traffic, to create low-traffic neighbourhoods and reduce rat-running while maintaining access for vehicles.

Vouchers will be issued for cycle repairs, to encourage people to get their old bikes out of the shed, and plans are being developed for greater provision of bike fixing facilities. Many more will take up the Cycle to Work scheme, which gives employees a discount on a new bike.

The final statement, regarding the Cycle to Work Scheme, could be a relevant option for employers to consider as there are tax benefits for employees.

Chancellor extends Furlough scheme

The Chancellor announced further support for employers (12 May 2020) by extending the Coronavirus Job Retention Scheme (CJRS) until the end of October 2020.

This will be a welcome change for those business owners endeavouring to find a constructive way to manage the present lock-down and other disruptions and emerge from the process with a viable business.

Details announced to CJRS today are:

• Support will continue until the end of October 2020.
• Furloughed workers will continue to receive 80% of their current salary up to the existing £2,500 maximum.
• New flexibility will be introduced from August 2020 with the intention of getting employees back to work. Initially, part-time.
• From the same date, 1 August 2020, employers may be asked to contribute.

Regarding the August changes the Chancellor said:

As we reopen the economy, we need to support people to get back to work. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

Detailed information regarding the new flexible approach – part-time working – will be published towards the end of May 2020.

Employers will need to factor these changes into their business plans as we emerge, all-be-it slowly, from lock-down.

Claim now for the Self-Employed grant

HMRC have now updated their instructions regarding the claims process for the Self-Employed Income Support Grant (SEISS).

Originally, the grants were promised – for eligible individuals – for early June 2020.

The good news? You can now make claims from today for payment this month IF you qualify for the SEISS.

This involves checking to see if you are eligible. You will need your Unique Tax Reference number and NIC number to do this. You will then be advised if you are eligible to claim and when you should apply.

On 2^nd January 1987 a 26 year old Huw Baker joined James, Bushell & Partners based in a small office in Church Street, Merthyr Tydfil. These were days before computers were used by small businesses and mobile phones were only used on Star Trek!

By the end of 1987 the office boasted one PC shared between the seven members of the firm. The cost of that PC with its accounting software was £2,500. In today’s money that’s £6,600 – for one PC.

In 1993 the practice bought a small local firm of Chartered Accountants and in October 1995 bought a much larger firm of Chartered Accountants, becoming the largest practising firm in Merthyr Tydfil and the Heads of the Valley region, now known as James & Baker. The practice moved to larger offices but still in Church Street, which at the time was the home of the ‘professionals’ with four firms of solicitors, two firms of accountants, a firm of Chartered Surveyors and the local office of The Refuge in residence. In amongst this motley crew was Charbonniers nightclub!

On the merger with another firm of Chartered Accountants in 2003 the firm, now rebranded btp Associates Chartered Accountants was relocated to the High Street where it remained until 2012. After purchasing yet another firm of accountants in 2012 we moved to our current home at The Orbit Centre on the Rhydycar Business Park. The firm now employs seventeen and acts for over 500 businesses and individuals.

When he came to the town in 1987 Huw was the youngest practising Chartered Accountant in Merthyr Tydfil, a title that he held until 2016 when his son Gavin qualified with the firm.

Gavin has now moved on to London but the title is now held by Richard Knoyle, a director of btp, who was trained with James & Baker in the 1990s and qualified as a Chartered Certified Accountant. Richard then became a member of the Institute of Chartered Accountants in 2016 so he is now a member of both major accountancy bodies in the UK.

Remarkably there are a quite a few clients of btp that were clients in 1987. Huw would like to thank them and all clients of the practice for their continuing support saying

‘I don’t know where the last thirty years have gone. Much has changed within the accountancy profession in that time, fuelled by the introduction of technology and there is more to come with HMRC pushing their Making Tax Digital agenda. One thing that has stayed constant throughout is the firm’s philosophy of providing a top class service to its clients and the ongoing support of those clients and my thanks go to all clients past and present’.

If you have any accountancy needs Huw will be glad to help. He can be contacted on 0800 0439351.

This year’s awards are being held on 9^th September at Cyfarthfa Park, with rugby legend Shane Williams MBE confirmed as host.

Don’t forget to enter your business to be in with a chance of winning an award, or just come along for a night celebrating Merthyr’s finest.

Further details can be found at www.merthyrbusinessclub.co.uk

We hope to see you there, and help you celebrate your success on the night (there’s a rumour that Huw might even stretch to a bottle of bubbly on the night for any successful BTP Associates’ clients)