Whilst it may seem strange to be talking about personal tax returns in May, especially in the middle of a pandemic, there are many reasons why now is the perfect time to talk about it. I have spent a lot of my week working on personal tax returns for clients who are keen to know what their tax liabilities are for the next year, and likely payments on accounts for July 2021. Yes I said it, over twelve months away.
Early completion of your returns gives you the opportunity to plan ahead to determine how you will be able to pay your tax liabilities. Whilst the payments on account in July can be deferred, as things stand, these still need to be paid by the 31st of January 2021, and these payments will need to include the July 2021 payments as well. For many people that is going to be a large outgoing, and the sooner you know the bill the more time you have to prepare for this. There is nothing worse than getting a large tax bill in January and not having the cash to pay it. That said, we all keep money back for our tax bills don’t we……
The other reason why we, at Zyla are keen to discuss your tax returns with you as early as possible is that if you are out of work just now, or working limited hours, then this is the time when you can pull the information together, and we can sit down and have a socially distancing chat about you, and your business. This could be the time when real and significant changes could be made to you and your business.
Don’t let Hector the Inspector catch up on you, drop us an email at [email protected] and let us advise you how best to keep on Hector’s good side.
Wow what a reaction to last week’s blog, some great and some interesting feedback – I do like the name ‘the mysterious Scottish CA’ but I promised Suzy and Latha this wouldn’t be about me. Over the course of the next couple of weeks what I said I would write about for them is the various different softwares that they use to make their cloud based firm so accessible for someone joining them, even from 400 miles away.
This week I thought I would focus on ‘Slack’ which was the one I was most interested in starting with them. As David Menzies commented ‘great to see collaborative working’ and this epitomizes what Slack is all about. At Zyla, Slack is used as the internal collaboration and communication tool between all of us here at Zyla.
Every client has a channel set up, every software and topic as well as key subjects all have individual channels set up to allow both communication and tracking of progress on work. When I’ve finished a bit of work, and want to send it to Suzy or Latha for review, I message them via Slack, and include a link to the Google Drive where the work is stored thus creating a to do task for the them, as well as making it as easy as possible for the person who is reviewing it. Not only that – it keeps your inbox clearer and lets be honest, who doesn’t want their email inbox clearer!
As well as using it for internal workings above, they have taken it one step further and created an online community and help hub for their clients through a second community. I should mention at this stage that a community is essentially a hub where you login into to see what communications you have access to. So for all of their clients, there is a one stop shop for updates and information – which has been greatly received by clients during this current pandemic. With emails there is always a chance a spam filter will not like a word in the email and send something to junk, and by using Slack, clients know this won’t happen and get notifications when updates are shared. And what’s even better – clients can share their experiences through here without concerns.
All that leaves me to say is are you getting this service from your current accountant, and if not, would you love to be part of the Zyla Community? If so, drop us an email at [email protected] and let us introduce you to Slack.
Who is eligible?
If you are self-employed or partner in a partnership firm and have been adversely affected by the recent Coronavirus pandemic you are eligible to claim using this scheme. The grant need not be paid back but needs to be included and taxed in your Self Assessment Tax return for 2020-21.
How much will you get?
You will get a taxable grant based on your average trading profit over the 3 tax years
- 2017-18 and
HMRC will work out the average by adding the profits of the three years and dividing by 3
The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. The amount will be paid by HMRC straight into your bank account.
Check if you are eligible to claim
You can check online to find out if you’re eligible to make a claim. Your tax agent or adviser can also check your eligibility on your behalf using the link https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
You’ll need your:
- Self Assessment Unique Taxpayer Reference called the UTR number
- National Insurance Number
You should be able to find both on your previous year’s tax return or contact your tax agent or advisor who would have it.
Once you have established your eligibility you need the additional information below to make the claim using the same link as mentioned above.
- Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
- UK bank details (only provide bank account details where a Bacs payment can be accepted) including
Bank Account Number
Name on the account
Your address linked to the bank account
How to claim
- You have to make the claim yourself. Your tax agent or advisor cannot make the claim for you but you can contact them for support or information.
- You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus
- You should not claim the grant if you’re a limited company or operating a trade through a trust
- HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate
After your claim
HMRC will check your claim and pay your grant into your bank account in 6 working days from the date the claim is made and will also send you an email when your payment is on its way.
Record Keeping and Reporting
You must keep a copy of all records in line with normal self-employment record keeping requirements, including:
- the amount claimed
- Claim reference number
You should also keep any evidence that your business has been adversely affected by coronavirus such as:
- business accounts showing a reduction in turnover
- confirmation of any coronavirus-related business loans you have received
- dates your business had to close due to lockdown restriction
- dates you or your staff were unable to work due to coronavirus symptoms, shielding or caring responsibilities due to school closures
Report the grant
- on your Self Assessment tax return
- as self-employed income on any Universal credit claim
Please conact [email protected] if you need any help on knowing more about the scheme and wanting to make your claim to HMRC
Like everyone in the world at the moment this is an unusual time, and unfortunately at this time I have found myself in Furlough. I know I am not unique in this situation, but I miss my clients, I miss my colleagues and feel I should be there to fight for my clients futures. However, as Albert Einstein said “In The Middle Of Difficulty Lies Opportunity.”
My opportunity is the chance to work with Suzy and Latha at Zyla Accountants and assist them out in the interim period, learn from them and how they operate their ‘portable’ firm. Over the past couple of weeks I have watched Suzy appear on a number of webinars and talk about cloud based accountancy firms, and it is great to not only see it in action, but experience the process as well.
Without giving away their trade secrets, I have gone from a predominately paper based environment to working remotely in Scotland for a firm in London and using seven different cloud based software that they use to run their entire accountancy firm from. We have that and we still use paper files – the savings in both cost and the environmental impact is massive by moving everything into the cloud.
The first week and a half has flown in – probably due to my wife working and me having to fit the work in around childcare, but Latha and Suzy have both been flexible, and helpful with this, taking time to show me the softwares, and the clients. It is living proof that in this ‘new normal’ accountancy practices can not only operate, but flourish. Over the next couple of weeks I will be writing about my experiences working with Suzy and Latha, showcasing the benefits of the cloud accountancy firm.
However, as many more of us work from home, and have staff working remotely there are a huge range of implications that need to be considered, and the correct planning should be considered at this time – be in Capital Allowances from additional IT purchases, changes in rental agreements and impacts on accounting treatment, and grants and payment holidays. At Zyla we have been working through this with a range of clients and pride ourselves on proactive advice.
If you need any further guidance on the current situation and working from home get in touch [email protected]