Archive for January, 2021

Private residence, court actions available on separation or divorce

Thursday, January 21st, 2021

Couples may have experienced the difficulties that can arise when couples separate or divorce. One area where they may need to resolve are the options that courts have to direct ownership of the marital home. The courts can exercise their jurisdiction in the following ways.

  • By recognising an existing equitable interest of the spouse or civil partner who does not have legal title to the dwelling house.
  • By ordering the spouse or civil partner owning the home (or an interest in it) to transfer it to the other spouse or civil partner.
  • By ordering the spouse or civil partner owning the home (or an interest in it) to hold it on trust for the other spouse or civil partner for a limited period.
  • By ordering the spouse or civil partner owning the home to sell it and to pay the other spouse or civil partner a capital sum out of the proceeds of sale.
  • By both determining that one of the spouses or civil partners had an equitable interest in the home and ordering the other spouse or other civil partner to transfer some or all of their interest in the home or to pay a capital sum out of their share of the sale proceeds.

Where the marital home is the couple’s main asset the outcome of these deliberations is clearly significant.

1st March – Big Changes for VAT in Construction

Wednesday, January 20th, 2021

20th January 2021

After some delays, it seems the new “reverse charge” system of VAT for many construction projects will come into force on 1st March.  Everybody who is in the construction sector, or commissioning building and construction works, might stop to have a read:

Construction VAT Reverse Charge Guide Jan 21

If you have any questions on this, why not speak to our VAT manager, Helen Goodwin?

Helen.Goodwin@MilneCraig.co.uk

 

Consider online tax payment plans

Tuesday, January 19th, 2021

January is the month that taxpayers registered for self-assessment need to pay their taxes. Usually, this amounts to any underpayment for the previous tax year and a first payment on account for the current tax year.

Unfortunately, HMRC will base their payment on account for 2020-21 on the self-assessment liability for the previous tax year, 2019-20. As may traders have experienced a downturn in profits during the period of COVID disruption since February 2019, they need to reduce their payments on account for 2020-21 to reflect the lower profit compared to that for 2019-20.

In this way you can recalculate any payments on account for 2020-21 based on the reduced activity.

Even with these reductions in the January 2021, payment on account, many taxpayers will be faced with paying tax bills and have no funds to do so.

In a recent press release, HMRC explained the current support they are prepared to offer taxpayers to spread any tax payments over twelve monthly instalments.

They said:

Almost 25,000 Self-Assessment customers have set up an online payment plan to manage their tax liabilities in up to 12 monthly instalments, totalling £69.1 million, HM Revenue and Customs (HMRC) has revealed today (13 January 2021).

In October, HMRC increased the threshold for self-serve Time to Pay arrangements from £10,000 to £30,000 for Self-Assessment customers. Once they have completed their 2019-20 tax return and know how much tax they owe, customers can use the self-serve facility to set up monthly direct debits and spread the cost of their tax bill.

Visit GOV.UK to find out more about Payments on Account.

The self-serve Time to Pay threshold was increased to help businesses and individuals who have been affected by the coronavirus pandemic. Supporting Self-Assessment customers to manage their tax bills can help ease their financial commitments into more manageable monthly payments. To date, the average value of payment plans set up online is £2,821.

Customers can apply for the payment plan via GOV.UK. However, they must meet the following requirements:

  • they need to have no:
    • outstanding tax returns
    • other tax debts
    • other HMRC payment plans set up
  • the debt needs to be between £32 and £30,000
  • the payment plan needs to be set up no later than 60 days after the due date of a debt

 

NOTE: Be aware of copycat HMRC websites and phishing scams. Taxpayers should always type in the full online address www.gov.uk/hmrc to get the correct link for their Self-Assessment tax return online securely and free of charge.

They also need to be alert if someone calls, emails or texts claiming to be from HMRC, saying that they can claim financial help, are due a tax refund or owe tax. It might be a scam. Check GOV.UK for information on how to recognise genuine HMRC contact.

Why go digital?

Thursday, January 14th, 2021

There is a major advantage to recording business transactions digitally; once the basic data has been entered it can be interrogated and represented in endless types of reports.

During the present COVID disruption this ability to drill down or summarise data should be used to support business owners in making appropriate decisions. Accounting software, used effectively, will provide you with information in real time to identify problem areas and direct your efforts to enact counter measures.

Most businesses use accounts software to monitor their bank balances, chase unpaid bills and keep an eye on bills they need to pay.

Whilst these are all valuable features, and they do enable you to manage daily “housekeeping” chores, they do not inform you of impending cashflow, profitability or solvency issues. To address these additional needs, you will need to review the standard reports that all accounts software packages provide. If necessary, you may also need to create new reports – linked to your accounts data – that provide you with the additional evidence you need.

There are very few business owners that would not benefit from recording and interrogating their business data digitally.

Some may only need fairly basic functionality; others would benefit from a more in-depth approach. We recommend:

  • There is no excuse for avoiding the recording of your business transactions digitally. If you are completely computer phobic we can offer bookkeeping support.
  • Those that already use accounting software should review the number and type of reports they produce to see if additional reports are required.

During COVID disruption – to individual businesses and to the wider economy – information as well as cash is king.

With very little effort, new reports can be created to help you manage specific problems and once created, they will be available to you instantly, at the click of your mouse button. Don’t get left behind or stressed by lack of information. Go digital…

Business Lock-down summary January 2021

Tuesday, January 12th, 2021

We have prepared the following lists from information published on the GOV.UK website. It sets out which businesses are required to close, and which can remain open during the current COVID lock-down.

Those required to close face compounded financial difficulties as their ability to create revenue is at best restricted and in many cases stopped completely.

We can help. Please call so we can help you consider your options.

Businesses and venues which must close in England

  • non-essential retail, such as clothing and homeware stores, vehicle showrooms (other than for rental), betting shops, tailors, tobacco and vape shops, electronic goods and mobile phone shops, auction houses (except for auctions of livestock or agricultural equipment) and market stalls selling non-essential goods. These venues can continue to be able to operate click-and-collect (where goods are pre-ordered and collected without entering the premises) and delivery services.

  • hospitality venues such as cafes, restaurants, pubs, bars and social clubs; with the exception of providing food and non-alcoholic drinks for takeaway (until 11pm), click-and-collect and drive-through. All food and drink (including alcohol) can continue to be provided by delivery.

  • accommodation such as hotels, hostels, guest houses and campsites, except for specific circumstances, such as where these act as someone’s main residence, where the person cannot return home, for providing accommodation or support to the homeless, or where it is essential to stay there for work purposes

  • leisure and sports facilities such as leisure centres and gyms, swimming pools, sports courts, fitness and dance studios, riding centres, climbing walls, and golf courses.

  • entertainment venues such as theatres, concert halls, cinemas, museums and galleries, casinos, amusement arcades, bingo halls, bowling alleys, skating rinks, go-karting venues, indoor play and soft play centres and areas (including inflatable parks and trampolining centres), circuses, fairgrounds, funfairs, water parks and theme parks

  • animal attractions (such as zoos, safari parks, aquariums, and wildlife centres)

  • indoor attractions at venues such as botanical gardens, heritage homes and landmarks must also close, though outdoor grounds of these premises can stay open for outdoor exercise.

  • personal care facilities such as hair, beauty, tanning and nail salons. Tattoo parlours, spas, massage parlours, body and skin piercing services must also close. These services should not be provided in other people’s homes

  • community centres and halls must close except for a limited number of exempt activities, as set out below. Libraries can also remain open to provide access to IT and digital services – for example for people who do not have it at home – and for click-and-collect services

 

Some of these businesses and places will also be permitted to be open for a small number of exempt activities. A full list of exemptions can be found in the guidance on closing certain businesses and venues in England, but includes:

  • education and training – for schools to use sports, leisure and community facilities where that is part of their normal provision

  • childcare purposes and supervised activities for those children eligible to attend

  • hosting blood donation sessions and food banks

  • to provide medical treatment

  • for elite sports persons to train and compete (in indoor and outdoor sports facilities), and professional dancers and choreographers to work (in fitness and dance studios)

  • for training and rehearsal without an audience (in theatres and concert halls)

  • for the purposes of film and TV filming

Businesses and venues which can remain open in England

  • essential retail such as food shops, supermarkets, pharmacies, garden centres, building merchants and suppliers of building products and off-licences

  • market stalls selling essential retail may also stay open

  • businesses providing repair services may also stay open, where they primarily offer repair services

  • petrol stations, automatic (but not manual) car washes, vehicle repair garages and MOT services, bicycle shops, and taxi and vehicle hire businesses

  • banks, building societies, post offices, short-term loan providers and money transfer businesses

  • funeral directors

  • laundrettes and dry cleaners

  • medical and dental services

  • vets and retailers of products and food for the upkeep and welfare of animals

  • animal rescue centres, boarding facilities and animal groomers (may continue to be used for animal welfare, rather than aesthetic purposes)

  • agricultural supplies shops

  • mobility and disability support shops

  • storage and distribution facilities

  • car parks, public toilets and motorway service areas

  • outdoor playgrounds

  • outdoor parts of botanical gardens and heritage sites for exercise

  • places of worship

  • crematoriums and burial grounds

 

Regional variations

As regulations created to manage the COVID epidemic are organised and sanctioned regionally, you will need to refer to the regional authorities in Wales, Scotland and Northern Ireland as their instructions may be different to those listed above.

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