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The Chancellor’s Summer Statement – 8 July 2020

Further economic stimulus was announced by the Chancellor, Rishi Sunak today, to the 2020 Budget and payment holiday measures.

Here is a 2 minute summary of the Chancellor, Rishi Sunak’s Summer Statement:

The job retention scheme

£1,000 payment to employers for bringing back furloughed employees from Nov 2020 to Jan 2021 paying a minimum of £520/month.

£1,000 payment to employers for bringing back furloughed employees from Nov 2020 to Jan 2021 paying a minimum of £520/month.

Kickstarter scheme

From next month employers who employ 16-24 year olds, the government will pay the wages up to 6 months. Up to a max of £6,500.

Trainees

The government will pay employers £1,000 per trainee they take on.

Apprentices

The government will pay employers who take on apprentices within the next 6 months £2,000 per apprentice
Plus a bonus of £1,500 if the apprentice is 25+ years of age.

Green homes grant

Homeowners will be able to apply for grants to make their homes more energy efficient. £5,000 per household.

Stamp Duty

Cut in stamp duty of 0% from homes under £500,000
For transactions up to 31 March 2021.

VAT

Cut in VAT for the hospitality sector:
– Food
– Accomodation
– Attractions
From 20% to 5% effective now until 12 January 2021.

Cut in VAT for the hospitality sector : From 20% to 5% effective now until 12 January 2021.

Eat out to help out scheme

For the month of August only.
For eating out between Monday to Wednesday food will be 50% off, up to a value of £10/ head rebate from the government.

Consumers, which includes adults and children. You will need to register through a website to make a claim and the government will refund you directly into your bank account.

For the month of August only.For eating out between Monday to Wednesday food will be 50% off, up to a value of £10/ head rebate from the government.

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Payment Holidays

The Financial Conduct Authority (FCA) introduces a temporary freeze on Credit Card, Loan and Motor Finance repayments?

Due to the adverse affects of Covid-19 on household finances, as of 9 April 2020, the FCA has announced that there will be a temporary freeze on loan, credit card and motor finance payments, for those experiencing financial dificulties.

The FCA has stressed that those who can afford to pay and keep up with repayments, should continue to do so.

Credit Card Repayments

Credit card providers will be able to offer a three month payment holiday, to consumers negatively affected by the Coronavirus.
The payment freeze will not affect the consumer credit file.

Consumers will need to contact their respective credit card providers directly.
Information regarding applying, will be on the providers websites by Tuesday 14 April 2020.

Overdrafts

Customers who already have an arranged overdraft on their main personal current account, will be able to have 0% interest on overdrawn balances up to £500, for up to a three month period.

Loans repayments

Consumers who have personal and business loans will be able to apply for a payment holiday, with a freeze on repayments, up to three months.

Similarly consumers will need to contact their banks and lenders directly, information should be available on their websites and social media posts.
The payment holiday will not adversely affect consumers’ credit file.

The payment holiday will not adversely affect consumers’ credit file.

Mortgage repayments

Homeowners and buy-to-let landords are able to apply for a mortgage payment holiday, which will need to be applied for directly with the lender.
It is important to bear in mind, that if you take a three month payment holiday, the total amount outstanding will be based on your loan term, minus the three months.
Which means that your monthly payments will increase.

The payment holiday will not adversely affect consumers’ credit file.

When applying for a payment holiday over the phone, it will be worth noting down the representatives name and the time of the call. To ensure, in the event of the lender reporting a missed payment, during the payment holiday. The consumer will have enough information to retrieve details about the call, to prove the holiday had been sanctioned.
This may become problematic when trying to remortgage, if you have a blemish on your credit file.

Motor Finance Repayments

To compliment the other measures the FCA has announced, consumers who are facing financial dificulties, are now able to apply for a three month freeze on motor finance and lease payments.

The payment holiday will not adversely affect consumers’ credit file.

Pennyhills®

Pennyhills® are london bases accountants, specialising in accounting and tax services for entreprenuers, with their businesses across the UK.

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How to furlough employees

What is the Job Retention Scheme?

It is a temporary support measure to help all UK employers, pay their employees whilst their business is closed, directly as a result of the Coronavirus.
Such as Dentalpreneurs working in dental practices, for at least 3 months, starting from 1 March 2020 to 31 May 2020.

How much can I claim?

Employers can claim 80% of the wages costs up to a maximum of £2,500 per employee per month.
Including Employers National Insurance contributions and the minimum auto enrolment employer pension contributions.

Who is eligible?

All UK Employers who started their PAYE scheme on or before 28 February 2020 can access the scheme. Employers must have a UK Bank Account.

Furloughed employees

To claim the Job Retention Scheme, employers must furlough their respective employees.
A furlough employee is one that is on temporarily leave of absence.

They can be:
Full time
Part time
Employees on agency contracts
Employees on zero hour contracts
All of which must have been on the payroll as at 28 February 2020.

Can furloughed employees still work?

The furloughed employee cannot work for that organisation.

Is the grant tax free?

The grant will still be subject to tax and payroll deductions.

What do employers need to do?

Employers need to write to employees who will be furloughed, communicating the process moving forwards.

What if your employee is on unpaid leave?

Only employees after 28 February on unpaid leave can be furloughed. Not before.

What if your employee is on Statutory Sick Pay?

Employees who are self isolating and/ or are on sick leave, will get Statutory Sick Pay first.
They can be furloughed thereafter.

The grant you will get from HMRC is the lower of:80% of your employee’s gross monthly wages and £2,500 per month, not including any bonuses or commission.The 80% calculation is based on the employees wages as at 28 February 2020.

What if your employee has more than one job?

Employees must be furloughed for each employer they work for.

What if your employee is on Maternity leave or Paternity leave?

Employees who qualify for Statutory Maternity Pay, will be eligible for 90% of their average weekly earnings for the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the lower of statutory flat rate,  currently £148.68 a week, rising to £151.20 a week from April 2020.

How to work out what you can claim

The grant you will get from HMRC is the lower of:
80% of your employee’s gross monthly wages and £2,500 per month, not including any bonuses or commission.
The 80% calculation is based on the employees wages as at 28 February 2020.

What if my employee’s wages vary?

If the employee has been employed for greater than 12 months.
You can claim the higher of:
1) Wages on average for the 2019/20 tax year
2) Wages on the same month in the prior year

If your employee was employed for less than a year.
You can claim 80% of the average pay over the period employed.

What will I need to make a claim?

  1. your ePAYE reference number
  2. the number of employees being furloughed
  3. the claim period (start and end date)
  4. amount claimed (per the minimum length of furloughing of 3 weeks)
  5. your bank account number and sort code
  6. your contact name
  7. your phone number

How do I make a claim?

You will be making a claim outside of the PAYE system. The new online portal will be the system that is used to make your claim. Which will be available at the end of April.

You can submit one claim every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can also be backdated to 1 March 2020.

What happens when you have claimed?

HMRC will pay the grant to your nominated UK bank account via BACS.You need to make the claim based on your payroll amount per employee.
You must pay the employee all of grant received and not deduct any commission or fees.

Income tax and National Insurance

Furloughed employees 80% grant of their wages will subject to Income tax and the employer will be responsible for  Employer National Insurance contributions and auto enrolment contributions. Which will be received from the Grant’s additional payment.           

The Tax treatment of The Coronavirus Job Retention Scheme

The payments received must be included as income, in the businesses calculation of taxable profits and deduct employment costs in the normal way.

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The 2020 Budget – Business Tax

Deferral of tax payments

Business owners will be able to defer tax payment over an agreed period of time from today. There will be a dedicated helpline with 2,000 staff standing ready to help, due to the Coronavirus outbreak.

Coronavirus Business Interruption Loan Scheme

This loan scheme is set up to help small business owners with any cashflow isssues they may be facing. Offering a generous guarantee on those loans, up to £5m, covering up to 80% of losses with no fees to the bank.

Check you business rateable value here:
https://www.gov.uk/correct-your-business-rates

Statutory Sick Pay (SSP) for Business

For businesses with less than 250 employees, they can claim a full refund from the government, for the cost of providing SSP to employees off of work, due to Coronavirus, for 14 days.

Employment Allowance

Will increase from £3,000 to £4,000, from 6 April 2020.

Cash Grants

For the business who claim Small Buiness Rates Relief (SBRR) a £10,000 cash grant will be available and £25,000 cash grant for businesses in the hospitality and leisure sectors, like pubs.

Corporation tax

Will remain at the rate of 19% from 6 April 2020.

Research and Development

The R&D expenditure credit will increase from 12% to 13%.

The Job Retention Scheme

Taxable grants will cover 80% of your employee wage bill, up to a maximum of £2,500 per month per employee.

VAT Holiday

Business will be able to defer VAT liability from June 2020 until January 2021.

Self Assessment Holiday

The July 2020 POA will be deferred until January 2021.

VAT on digital e-books, journals, newspapers

Will be 0% from 1 December 2020, so they are in line with paper formats, in time for Christmas.

Business rates Holiday

Business rates will be scrapped with a retail rateable value of less than £51,000 for 12 months. Including businesses in the retail, hospitality and leisure industries.

You can check your rateable value here:

https://www.gov.uk/correct-your-business-rates

About Pennyhills®

London based Accountants specialising in accounting and tax solutions for Entrepreneurs, with their businesses, across the UK

We are a Silver-status partner with Xero and our practice regulated by the Association of Chartered Certified Accountants (ACCA).

We are authorised by ACCA to carry out a range of investment activities.

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The 2020 Budget – Personal Tax

Income tax and National Insurance

The personal allowance is £12,500.

With the higher rate of 40% becoming effective on income above £50,000.

The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500.

Non-UK Residents
Will see new stamp duty surcharge at a rate of 2%, effective from April 2021

Statutory Sick Pay (SSP)

Self employed workers will be able to claim SSP from day one and will have access to the Contributory Employment and Support Allowance.

Deferral of tax payments

Self-employed business owners will be able to defer tax payment over an agreed period of time today. There will be a dedicated helpline with 2,000 staff standing ready to help. Due to the Coronavirus outbreak.

Stamp Duty Land Tax

First Time Buyer’s Relief in England and Northern Ireland will be extended so that all qualifying shared ownership purchasers can benefit, even if they have not elected to pay SDLT on the full purchase price ofthe property. This is backdated to include purchases since 22 November 2017.

Non-UK Residents

Will see new stamp duty surcharge at a rate of 2%, effective from April 2021

Capital Gains Tax
– Entrepreneurs Relief

The reform will see the annual lifetime allowance reduced from £10m to £1m.

– Lettings Relief

Lettings relief can reduce capital gains tax due on the sale of a property as you can claim up to £40,000 individually or up to £80,000 if a partner or spouse jointly owns the property.

The final period of exemption relief can be applied to a property up for sale, provided the property is sold within 18 months of the owners moving out. The final period of exemption will be reduced to 9 months, and it will increase the capital gains tax liability for anyone selling their main residence and who has accrued a period of private residence relief.

Pensions

The taper annual allowance threshold increased to £200,000 from £110,000. Also the minimum amount that can be tapered has been reduced from £10,000 to £4,000.

About Pennyhills®

London based Accountants specialising in accounting and tax solutions for Entrepreneurs, with their businesses, across the UK

We are a Silver-status partner with Xero and our practice regulated by the Association of Chartered Certified Accountants (ACCA).

We are authorised by ACCA to carry out a range of investment activities.

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The 2020 Budget – Overview

Overview

The newly appointed Chancellor Rishi Sunak, delivered his first budget speech, this afternoon.

Promising to boost the economy and get the country through the Coronavirus outbreak.

Changes to Entrepreneurs Relief, bringing down the lifetime allowance, was also on the agenda.

This morning, the governor of the Bank of England, Mark Carney, announced an emergency reduction of interest rates from 0.75% to 0.25%. In an effort to support growth and promote spending.

But how does this affect me and my business, I hear you say?

Due to the Coronavirus outbreak, employees who need to self isolate can claim statutory sick pay as of today. Together with self employed workers, who were not eligible, will be able to claim contributory Employment Support Allowance (ESA) from today.

Self employed workers will be able to defer tax payments over an agreed timeframe. With 2,000 additional, dedicated staff from HMRC to support this.

The Chancellor also spoke to support employers, with a Coronavirus Business Interuption Loan Scheme. This will help to plug any temporary cash losses and allow employers to claim back any statutory sick pay paid out.

Changes to Entrepreneurs Relief, bringing down the lifetime allowance, was also on the agenda.

Changes to National insurance relief for NHS dentists and doctors, saw changes to the tapered relief scheme.

All in all, it was a positive budget, with something for everyone, really promoting business. It is important to note, how smooth the process will be for businesses and dentalpreneurs to liaise with HMRC during this Coronavirus outbreak.

A summary of all the key tax takeaways follows overleaf. We look forward to receiving more detail on all measures announced and expect the Finance Bill to be published on 11 July 2020.

Pennyhills® Dental Accountants?

London based Accountants specialising in accounting and tax solutions for Entrepreneurs, with their businesses, across the UK

We are a Silver-status partner with Xero and our practice regulated by the Association of Chartered Certified Accountants (ACCA).

We are authorised by ACCA to carry out a range of investment activities.

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What is a Dentalpreneur?

Our Story

Pennyhills® Dental Accountants was founded, to help Dentalpreneurs just like you, who are not trained accountants or bookkeeper, grow their dental and non-dental businesses, accross the UK.

We find a growing gulf in accounting smart tech being used by Dentalpreneurs, as compared to entrepeneurs in Tech, Architecture and Food & Drink sectors.
We do not understand why dental professionals using “Specialist Dental Accountants” are not implementing these time saving technologies and strategies, so we decided to do something about it.

Pennyhills® Dental Accountants, mission to take the Dentalpreneur from pain to gain by providing information that is:
1. Simple to understand,
2. Clearly presented and
3. Available at your fingertips.

Through our accounting, tax and advisory services.

But really, what is a Dentalpreneur?

A dentist and a entrepreneur mixed together? No.

A Dentalpreneur is a term used by Pennyhills® Dental Accountants to describe ambitious, tech savvy, enterprising dental hygienists, associate dentists, general dentists, paediatric dentists, orthodontists, periodontists, endodontists, oral pathologists, prosthodontists and qualfied dentists running non-dental businesses. That have a clear goal on what they want professionally and personally.

The dental professionals Pennyhills® Dental Accountants support are all Dentalpreneurs.

Smart Tech?

We found, whilst personally, Dentalpreneurs are fully receptive to the latest changes in technology and time saving ways of completing the day to day tasks, like shopping or ordering a taxi. Professionally, the same technology in the accounting for dentists and dental practices is not being used. Even though the technology exists.

Why Pennyhills® Dental Accountants?

We use the smart tech and strategies and process used by high growth startups and implement this with our Dentalpreneurial clients, in their dental and non-dental start up ventures. We find that Dentalpreneurs really like the effiicency savings and because their financials are available in real time, they are in total control.

No more overflowing receipts in your wallet or handbag

Our smart apps mean you can say goodbye to those receipts.
Take a picture of the receipts or invoices in our app, press send and we will do the rest.
You can throw them all away and make some room in your wallet or handbag, so you find the thing you really need, when you need it.

Speak to our experts on how we can support your practice:
Email enquiries@pennyhills.com or call 0208 064 0969.
Visit http://www.pennyhills.com

Pennyhills® Dental Accountants, taking Dentalpreneurs from pain to gain.

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