On 6th March 2024 the UK Chancellor announced the Spring Budget for the UK. There were quite a few positive changes and the main points to help plan ahead are below:

Child Benefit Changes
Starting April 2024, parents will receive Child Benefit as follows: £25.60 per week (£1,331 annually) for the eldest child and £16.95 per week (£881 annually) for additional children.
Presently, if either parent's income exceeds £50,000, the High Income Child Benefit Charge (HICBC) takes effect, requiring repayment of Child Benefit once income surpasses £60,000. This necessitates completing a self-assessment tax return.

As of April 6, 2024, the threshold rises to £60,000 with a gradual taper, fully recouping Child Benefit when income exceeds £80,000. By April 2026, the clawback assessment will shift to a "household income" basis, pending HMRC adjustments.

The 2024 threshold increase will lower the combined tax rate (HICBC, income tax, and NIC) on incomes above £60,000, encouraging parents to earn more. Eventually, transitioning to a "household income" basis should create fairer outcomes for families, albeit HMRC implementation challenges may arise.

Changing the Non-Domiciled (non-dom) status and tax treatment
The government plans to end the current tax treatment for UK resident non-domiciled individuals (non-doms) starting April 6, 2025. This regime, in place for over 200 years, allowed UK residents with permanent homes abroad to avoid UK tax on foreign income and gains (FIG) unless brought into the UK. It also shielded non-UK assets from Inheritance Tax.

As of April 6, 2025, the current remittance basis will be replaced by a new residence-based test lasting four years for those who have been non-UK residents for at least the prior ten tax years. During this period, newcomers won't pay tax on foreign income or trust distributions brought into the UK. However, they'll lose personal allowances and CGT exemptions.

After four years, individuals will be taxed like other UK residents on worldwide income and gains.
Transitional rules apply: non-doms moving from remittance to arising basis in 2025/26 will be taxed on 50% of foreign income; reduced rates for pre-6 April 2025 FIG remittances till 2027; and Capital Gains Tax rebasing for non-UK assets. Business Investment Relief continues.
From April 6, 2025, settlor-interested trusts lose tax protection unless they qualify for the four-year FIG regime. Overseas workday relief remains for the first three years, depending on opting into the new regime.

Inheritance Tax shifts from domicile to residence-based from April 6, 2025, with assets within ten years of UK residency potentially liable. UK sited assets remain subject to IHT.
These changes simplify the non-dom tax system, but complexities persist. Transitional provisions offer time for adjustment. Current non-doms should consult their Tax Affinity adviser promptly as these are significant changes.

National Insurance
Class 1 Changes (Employed)
Starting from an annual income of £12,570 up to £50,270, employees pay Class 1 National Insurance Contributions (NICs). The rate is currently 10% (down from 12% since January 6 this year). Above £50,270, the rate remains 2% for additional earnings.
From April 6, 2024, the main rate will decrease by another 2% to 8%, potentially saving employees up to £63 monthly (£754 yearly). Employers' NICs, at 13.8% over the lower threshold, remain unchanged.

This reduction benefits employees and may ease pressure on employers regarding wage hikes.

Self-Employment Changes
Self-employed individuals pay Class 4 NICs from £12,570 to £50,270 at 9% (dropping to 8% from April 6, 2024). Above this threshold, the rate stays at 2%.

Starting April 6, 2024, the rate decreases by another 2% to 6%. This saves £30 for every £1,000 of profit, up to £1,131 annually for those paying at the main Class 4 NIC rate. Class 2 NICs were abolished from April 6, 2024, offering a positive financial change for the new tax year.

Capital Gains Tax
When you sell residential property and make a profit, you might owe Capital Gains Tax (CGT), except when it's your main home, which is CGT exempt. If the property wasn't always your main home, only part of the gain is taxable.

Currently, residential property gains are taxed at 18% for basic rate band profits and 28% thereafter. Starting April 6, 2024, the higher rate reduces to 24% for property sales.
Reporting the sale within 60 days from completion is crucial. Sales exchanged before April 6, 2024, may still be taxed at 28%.

Landlords affected by the abolishment of Furnished Holiday Lets tax benefits from April 2025 will see changes. From April 6, 2025, furnished holiday lettings will be treated as property investment businesses, losing several tax benefits:

• Interest on loans for furnished holiday lettings will no longer be deductible but will receive a 20% tax credit.
• Capital gains will be subject to CGT rates, losing business asset disposal relief.
• CGT rollover relief and capital allowances will be withdrawn.
• Tax relief for pension contributions may require adjustments.

These changes impact property owners and landlords, requiring careful consideration and possibly seeking advice.

Investments
The Budget introduced measures to encourage individual investing and foster a stronger savings culture. Here are the key points:

1. UK ISA Consultation:
   • The government is considering a new UK ISA with a £5,000 allowance, in addition to the existing £20,000 allowance.
   • The consultation, open until June 6, 2024, seeks input on defining eligible investments for the UK ISA.
   • ISAs offer tax-free savings, potentially benefiting higher earners amidst frozen tax thresholds.
2. NS&I British Saving Bond:
   • NS&I will launch a British saving bond in early April 2024, offering a fixed interest rate for three years on investments ranging from £500 to £1 million.
   • Investors can choose between growth bonds and income bonds, each with different tax implications.
   • Bonds from NS&I are backed by HM Treasury.
3. NatWest Share Sale:
   • The government plans to sell part of its NatWest shareholding directly to individual investors, aiming for full divestment by 2025/26.
   • The sale may occur this summer, subject to market conditions.

It's advisable to seek independent investment advice before making any investment decisions.

VAT threshold increased
The government is raising the VAT registration threshold from £85,000 to £90,000 and the deregistration threshold from £83,000 to £88,000. These changes start on April 1, 2024. Over 28,000 businesses are expected to benefit by no longer needing to register for VAT in 2024-25.

Conclusion
Overall this is a much better budget than the previous autumn one presented in 2023. VAT announcement is decades overdue and the drop in NI thresholds don't make that much of a real world difference when price rise percentage is way higher then the percentage drop. And again the goverment did not address any of the large multinationals raking huge profits while small businesses and the public suffer. The sale of Natwest shares in a recession (that the government used tax payers money to bail out the bank recently) needs to be critically analysed more closely as to the effective timing of the sale and real time benefit for tax payers who directly paid for this out of their pockets. At times like these its even more important to have an experience and knowledgable tax accountant in your corner.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

The Smart Move: Why You Should Use a Tax Accountant for Your Self-Assessment

In the world of personal finance, few things are as certain as taxes. Each year, individuals across the globe prepare to navigate the labyrinth of tax regulations, deductions, and forms required for their self-assessment. While some opt for the DIY approach, a growing number are discovering the numerous benefits of enlisting the expertise of a tax accountant. In this blog post, we'll explore why using a tax accountant for your self-assessment is not just a smart choice but often a financially savvy one.

 1.   Expertise and Knowledge: Tax accountants are professionals who specialize in tax laws and regulations. They stay up-to-date with the latest changes in tax codes and have the experience to navigate complex financial situations. This expertise can help you minimize your tax liability legally.

 2.   Maximize Deductions and Credits: Tax accountants have a keen eye for identifying deductions and credits that you might overlook. Their attention to detail can result in significant savings, ensuring you're not paying more taxes than necessary.

 3.   Reduce Stress and Save Time: Preparing your own taxes can be time-consuming and stressful. It often involves sifting through a mountain of paperwork and deciphering intricate tax jargon. Hiring a tax accountant frees up your time and reduces the stress associated with tax season.

 4.   Avoid Costly Mistakes: Filing taxes incorrectly can lead to penalties and audits. Tax accountants are trained to minimize errors and ensure that your return is accurate, reducing the risk of costly mistakes that can haunt you later.

 5.   Year-Round Assistance: A tax accountant's support isn't limited to just tax season. They can offer financial advice throughout the year, helping you make informed decisions to optimize your tax situation and financial health.

 6.   Audit Protection: If you're audited by tax authorities, having a tax accountant on your side can be invaluable. They can guide you through the audit process and ensure that your rights are protected.

7.    Customized Strategies: Tax accountants can create personalized tax strategies that align with your financial goals. They consider your unique circumstances to help you make the most of available tax benefits.

 8.   Peace of Mind: Perhaps one of the most valuable aspects of hiring a tax accountant is the peace of mind it brings. Knowing that a professional is handling your taxes can alleviate anxiety and allow you to focus on other aspects of your life.

 9.   Cost Savings: Contrary to common belief, hiring a tax accountant can often result in cost savings. The deductions and credits they can uncover, combined with the reduction in errors, can more than offset their fees.

10.    Legal and Ethical Compliance: Tax accountants operate within the bounds of the law and adhere to ethical standards. This ensures that your taxes are filed ethically and legally, eliminating any worries about potential legal repercussions.

In conclusion, the decision to use a tax accountant like Tax Affinity for your self-assessment is an investment in your financial well-being. Their expertise, ability to maximize savings, and dedication to compliance can make the process smoother, more accurate, and less stressful. Ultimately, it's a smart move that can pay dividends in terms of both financial savings and peace of mind. So, this tax season, consider enlisting the help of a tax accountant like Tax Affinity and reap the rewards of a stress-free and financially optimized experience.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are the number rated and recommended Tax Accountants in London. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

The new UK Chancellor (yes another one...can you believe the UK had 4 Chancellors in 4 months in 2022) has given his first budget. And as before we have refined the main points and facts for business owners including SME's and entrepreneurs. So you can easily navigate and plan ahead with clarity.

The main points from the budget are:

1. Energy price guarantee for homes will remain at £2,500 extended for only 3 months until end of June. It was set to rise to £3,000 but that has now been cancelled. And no new support announced for business bills.

2. Corporation Tax for a limited company will rise from 19% to 25% from 6th April 2023. Small company's with profit of less than £50k will still pay the lower 19%. But companies with profits between £50k to £250k have to pay between 19% and 25% but are allowed to claim marginal relief. Company profits over £250k will be taxed at 25%. And companies with group ownership of other companies may end paying close to 26.5% (effectively) because the corporation tax for Group Companies was increased also - sadly all important details missed by the main stream media.

3. Tax-free yearly allowance for pension cash out to rise from £40,000 to £60,000 after being the same for the past 9 years.

4. Fuel duty (tax) frozen so the 5p cut to fuel duty/tax on petrol and diesel which was due to end in April, has been extended for another year.

5. Maximum amount a worker can accumulate in pensions over their lifetime before paying extra  tax currently £1.07 Million will be cancelled. Now there is no limit.

6. Tax on tobacco to increase by 2% above inflation for normal and 6% above inflation for hand-rolling tobacco.

7. Those who are already drawing down on their pensions, the total amount they can save tax free under the Money Purchase Annual Allowance is increased from £4,000 to £10,000 from April 2023.

8. 30 hours of free childcare for working parents in England expanded to cover 9 months to three year olds.

9. New £600 "incentive payment" for people becoming childminders, and the rules have been changed in England to let childminders look after more children.

10. Immigration rules to be relaxed for five roles in the construction sector, to ease labour shortages in the Industry. These categories are:

• Bricklayers & masons
• Roofers, roof tilers and slaters
• Carpenters and joiners
• Construction and building trades n.e.c
• Plasterers

11. Super deduction of 130% will end on 31/03/23 and move back to 100% AIA for plant and   machinery purchased and can be used directlty against corporation tax payable. A list of typical purchases is lasting until 31/03/26:

• computer equipment and servers
• tractors, lorries, vans
• ladders, drills, cranes
• office chairs and desks
• electric vehicle charge points
• refrigeration units
• compressors.

If your worried how these will effect you and need more specific guidance to help your business carry on growing during turbulent times then contact one of our Tax Affinity expert business advisors today (click here). With their countless years of knowledge and expertise they can guide your business to success even in the toughest of economic conditions.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

The government's records for the past 12 months to March 2022 showed that consumer prices have risen as much as 13.4% in some sectors. This is much higher than the 9% reported a few weeks ago. It is therefore prudent to assume when bad news is highlighted by the government or a corporate entity it will most likely be understated.

Now that the ONS has issued more accurate figures its important medium to small sized businesses know the exact figures when it comes to costs to make sure they can budget correctly and choose to either absorb or pass on costs. So the business owner can safely steer the business through a recession or downturn.

A quick list of UK inflation figures is below and it is advised that business owners plan and manage these as soon as possible:

• Transport: 13.4% 
• Furniture, household equipment and maintenance: 10.3% 
• Clothing and footwear: 9.8% 
• Housing, water, electricity, gas and other fuels: 7.7% 
• Restaurants and hotels: 6.9% 
• Food and non-alcoholic beverages: 5.9% 
• Recreation and culture: 4.9% 
• Alcoholic beverages and tobacco: 4.8% 
• Education: 4.5% 
• Health: 2.5% 
• Miscellaneous goods and services: 1.9%
• Communication: 0.7% 

Tax Affinity Accountants are rated as the number one business advisors for medium to small businesses. So if your a business owner who is effected by the inflation rises and need expert guidance and support then get in touch today and we will be happy to help you plan a strategy to steer your busines to growth and success.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

There are only a few working days are left until (UK) HMRC's self assessment (tax return) deadline. And with many people receiving furlough, SEISS type covid grants and Covid Support from Local Council's which all need to be declared it only add to the complication.

Many tax payers are finding their tax bills are higher this year than last year and are turning to expert tax accountants at Tax Affinity to help them. Doing it yourself or with someone with a basic knowledge of the ever changing tax rules is likely to end up costing you much more than the fees an expert tax accountant would ever cost. It just makes economic sense.

So if you have not had your 2020/21 (6.4.20 to 5.4.21) tax return completed then you urgently get in touch today as the number of working days are fast decreasing and before you know it the time will be gone and you may end up facing a fine by HMRC for missing the deadline.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

UK Spring Budget 2021 key points for business owners & SME's

At Tax Affinity we believe in improving the financial lives of every person in the world. Each time the UK treasury government makes budget announcements we spend time reading through the information to help our clients support our clients with the best information to drive their businesses forward even during a down turn.

The key points are listed below for a quick guide:

1. Furlough (CJRS) extended to end of Sept 2021. Originally it was going to end in April 2021. But the 80% value up to £2500 maximum will only last for 2 months and then taper off in July to Sept dropping to 60% up to a £1875 maximum. The employee is still expected to receive the full 80% up to £2500 at the employer’s expense plus NI and tax etc. Therefore each employer will need to calculate how this effect’s their expenses and weigh up the benefits of keeping staff or not. The cut off date for eligibility was 2nd March 2021 a day before the budget was announced. If you are client or would like to be a client contact Tax Affinity to discuss your PAYE options and PAYE expenses.
2.  Self Employed (SEISS) 4th & 5th grants announced running to end of Sept 2021. 4th grant (April to June) will be the same criteria as the previous ones (up to max £7500 of 80% of profits). While the 5th grant (July to Sept) will be banded with those who have seen a greater than 30% reduction in income eligible for 80% and those who have seen income fall less than 30% receiving a grant of only 30% (up to max £2,850). The cut off date for eligibility was 2nd March 2021 a day before the budget was announced. And both will take into account 2019/20 tax returns filed. Still need to qualify with over 50% of your income coming from self employment.
3.  Business rates 100% relief will be extended to 30th June. Then the following 9 months a 66% discount up to a maximum of £2m.
4.  VAT reduction to 5% extended for some sectors to 30th Sept. Then rate will rise to 12.5% for 6 months to 31 March 2022. After that it will return to normal 20%. If you are a client contact us for more information if this applies to you.
5.  Stamp Duty extension of £500,000 nil-rate to 30 June. After this it will return to £125,000 as before. This is accompanied with the 5% small deposit scheme up to a limit of £600,000 which is not restricted to 1st time buyers or new build homes.
6.  Restart Grant of £6,000 for non-essential retail to £18,000 for hospitality, leisure and personal care shops to replace the current monthly grant scheme.
7.  Universal credit £20 increase will be extended to end of Sept 2021 with a separate one-off payment for working tax credits claimants.
8.  Pension lifetime allowance frozen at £1,073,100 until April 2026. State pension will rise by 2.5% next year.
9.  Corporation tax for UK limited companies with profit less than £50,000 will remain in 19% tax band for year beginning 1 April 2022. Profits above £250,000 will attract 25% corporation tax. With bands in between unspecified at this time.
10.  Super deduction of 130% on plant, machinery and main rate assets from 1st April 2021 to 31 March 2023. This will apply to contracts started on or after 3st Mar 2021 and available for expenditure from 1st Apr 2021 to 31st  Mar 2023. Plus losses created can be carried forward.
11.  Carry back losses from 1 to 3 years extended up to max £2million of unused loses in 20/21 and 21/22 tax years.
12.  R&D cap at £20,000 from 1st Apr 21 plus 3 x company’s total PAYE and NIC dues.
13.  Personal Income tax rate will rise from £12,500 to £12,570 and the 40% tax threshold from £50,000 to £50,270 (ie £37,700 at basic 20% rate). CGT allowance remains at £12,300.
14.   Apprenticeship hiring payment rise to £3000 to Sept 2021. Plus fast track visa for hiring overseas staff for tech firms. Meaning a removal of 3rd party endorsement
15.  Recovery Loan Scheme to replace BBL / CBILS etc. Which is a shift from 100% government guarantee to 80% on eligible loans between £25k to £10m for “any legitimate business purpose, including growth and investment”. This is open til 31st Dec 2021.
16.  Annual Investment Allowance of up to £1m is extended to 31st Dec 21.
17.  Road Tax will rise from 1st April 21
18.  VAT deferral scheme extended, vat registered business now have the option to have 11 months interest free instalments between 2021 to 2022 on vat payments. If you don’t take this option you must pay deferred vat by 31st March 2021 for all past vat due. You can opt in between Feb and June 2021 but with fewer instalments. If no arrangement to pay is made you will receive a penalty by HMRC.
19.  Individual ISA limit £20k for 21/22; Junior ISA 9K; Child Trust Fund 9k;

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

At Tax Affinity we believe in improving the financial lives of ever person in the world. Enriching each persons life to be better today and tomorrow. We do that by remaining at the forefront of business tax and finance and constantly researching and striving for knowledge. Making sure we are the first to know and advise on all things new so we can improve everyone's financial life.

With the rise of Bitcoin (BTC) and other virtual currency such as Ethereum (ETH), Litecoin (LTC) and Dogecoin etc. Many investors are looking to cash in on the rise of the new wave of crypto currency appearing in the news.

Experts know how to mine such currency not just buy and sell it and the value of keeping the currency in electronic wallets to avoid fraud or theft. They understand the blockchain and how to use GPU's and graphics cards to help them increase their investments. Plus the places they can spend and buy more coins and tokens. With the rise of established business and brands saying they will accept and have purchased Bitcoin; cryptocurrency is here for the long term even if the government and central banks don't like it.

And with this rapidly changing financial landscape tax authorities around the world are scrambling to make tax laws and rules to bring it within their taxable structure. So anyone investing in, buying or generating virtual curency will become subject to tax depending on the way it is transacted and declared. A sobering thought when virtual currency was always supposed to a currency for the people by the people.

This is where a tax expert in crypto currency like Tax Affinity Accountants is essential to help you keep as much of your hard earned money as possible. We make sure to keep researching and checking with the tax authorites for the latest rules and regulations. Powering ahead to the forefront of crypto currency support.

Tax Affinity are already succesfully helping both businesses and individuals with their cryptoinvestments knowing that the vast majority of accountants and tax advisors in the world are lack the knowledge an skill to support them at this crucial time.

After all its how you do things at the start that defines what will be the end result and leaving financial matters to the last minute usually ends up in misery. So get in touch with us today when you still have time to invest wisely and keep more of your hard earned wealth and investments.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Crypto currency, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert cryptocurrency business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

@Tax_Affinity #bitcoins #Ethereum #dogecoin #taxaffinity #recommended #tax #accountant #accountants

To help make it easy to quickly identify what possible government support your business is eligible during the COVID-19 Coronavirus pandemic in the UK then have a quick look at the helpful chart above. Most businesses are eligible for some sort of support and we recommend they get in touch with us as soon as possible if they need help.

If you need help with your applications for government grants, loans and allowances as described above then as authorised HMRC agents and expert tax accountants Tax Affinity Accountants are available to support your business at this critical time. Urgently contact us by clicking here and we will use our expertise to support your business through this difficult time.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames and Epsom they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

Claiming a grant through the coronavirus (COVID-19) self-employment income support scheme (SEIS) worth 80% of trading profit

You can use this scheme if you're self-employed or a member of a partnership and have lost income due to coronavirus.

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months payable after HMRC checks your last 3 years tax returns filed. This may be extended by the government if needed.

Who can apply for this
You can apply if you’re self-employed (sole trader) or a member of a partnership and you:

• have submitted your Self Assessment income tax return for the tax year 2018-19
• have traded in the tax year 2019-20 - you have a limited time extension to back date and submit by 23/04/20 if this return was not done
• are trading when you apply, or would have been doing so except for COVID-19
• definitely intend to continue to trade in the tax year 2020-21
• and have lost trading/partnership trading profits due to COVID-19

Your self-employed profit before tax must also be less than £50,000 and more than half of your income must come from self-employment. This is determined by at least one of the following conditions:

• have trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
• have average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years you filed a Self-Assessment tax returns.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020. We can help you do this and you need to get in touch today.

HMRC said they will use data on 2018-19 tax returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way. If you have tax to pay for your 2018-19 tax return then this will need to be up to date.

How much will you get from hmrc
You can get a taxable grant which will be 80% of the average profits from the tax years (if all 3 available):

• 2016 to 2017 ie 6.4.16 to 5.4.17
• 2017 to 2018 ie 6.4.17 to 5.4.18
• 2018 to 2019 ie 6.4.18 to 5.4.19

To work out the average HMRC will be adding together the total trading profit for the 3 tax years (if all 3 available) then divide by 3 and then further divide by 12 to calculate a monthly amount.

They say it will be up to a maximum of £2,500 per month for 3 months. And they will pay the grant directly into your bank account, in one instalment. The bank details on your 18-19 tax return will most likely used as it is already in their records.

How to apply for it
You cannot apply for this scheme yet yourself. HMRC say they will contact you if you are eligible for the scheme and invite you to apply online. This may take some time as staffing levels are affected by COVID-19.

Individuals are advised they do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

You will access this scheme only through GOV.UK. website so be careful of fraud - And if someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied for it
Once HMRC has received your claim and you are deemed eligible for the grant, they will contact you to tell you how much you will get and the payment details. Previously this was by letter to the tax payers home for income tax refunds - it may be by text or emails also if HMRC has these records for you.

Note: If you claim tax credits you’ll need to include the grant in your claim as income. This income is taxable.

Other help you can get as well
The government stated it is also providing the following additional help for the self-employed:

• deferral of Self Assessment income tax payments due by 31 July 2020 (19/20 payment on account) and VAT payments (VAT regsitered business) due from 20 March 2020 until 30 June 2020
• grants for businesses that pay little or no business rates - apply to local council
• increased amounts of Universal Credit to £94.25 per week - apply direct to that dept
• Business Interruption Loan Scheme - apply direct to bank

If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme (read her for more about this).

If you need help with your applications for government grants, loans and allowances as described above then as authorised HMRC agents and expert tax accountants Tax Affinity Accountants are available to support your business at this critical time. Urgently contact us by clicking here and we will use our expertise to support your business through this difficult time.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames and Epsom they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.