How can you get tax relief on a payment of £500k to a SSAS Reply

Small Self Administered Pensions (SSAS) are common for owner managed businesses.

In general a company can pay up to £40k per year into a SSAS for a employee and if the allowances haven’t been used there is 3 year carry forward option, which could mean up to £120k.

However, where a SSAS has multiple members a company could contribute £500k and get full tax relief. This known as an indirect payment.

Corporation Tax relief on the indirect contribution is available in the year it’s made.  It needs to meet the “wholly and exclusively for the purpose of trade” test. 

If the contribution exceeds £500,000 (up to a maximum of £2 million), the relief must be spread over future years.

Here are the HMRC rules https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm043400

Speak to you SSAS provider for advice and further details

steve@bicknells.net

How do you make a claim for the Job Support Scheme (JSS)? Reply

www.bicknells.net

The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The company will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer and the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.

How can I claim?
• The scheme will be open from 1 November 2020 to the end of April 2021.
Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis.
• Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return

Examples
• Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
• Her employer pays Beth £140 for the days she works.
• And for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.
• The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.

https://www.gov.uk/government/publications/job-support-scheme

steve@bicknells.net

Winter 2020 – Job Support Scheme, SEISS, Tax Deferral and Bounce Back Loans (pay as you grow) Reply

NEW JOB SUPPORT SCHEME ANNOUNCED

 

Today Chancellor Rishi Sunak announced a new job scheme starting 1 November 2020 to replace the current Job retention (“furlough”) scheme which ends 31 October 2020.

 

All small and medium-sized businesses are eligible, larger businesses must show their turnover has fallen during the pandemic. Employers can use the new scheme even if they have not previously used the furlough scheme.

 

The new Government scheme will last for six months to 30 April 2021 and to be eligible employees will need to be working a minimum of 33% of their hours. For the remaining hours not worked the Government and employer will pay one third. of wages each. This means:

Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.

 

Employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.

 

The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

 

By way of an example an employee working 33% of their hours will receive at least 77% of their pay, 22% paid by the Government and 55% paid by their employer (the “worked” 33% plus 22%).

 

SELF-EMPLOYED INCOME SUPPORT SCHEME

 

The existing self-employed grant (SEISS) will also be extended on the same basis as the job support scheme.

 

An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.

An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April.

 

 

VAT CUT FOR HOSPITALITY SECTOR CONTINUES

 

The reduction in VAT to 5% for the hospitality and tourism sector will be extended until 31 March 2021.

 

DEFERRAL OF VAT BILLS

 

Up to half a million businesses who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.

 

SELF-ASSESSMENT TAXPAYERS – TIME TO PAY EXTENSION

 

Approximately 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

 

BOUNCE BACK LOANS – FLEXIBILITY GIVEN TO PAY BACK AMOUNTS BORROWED

 

More than a million businesses who took out a Bounce Back Loan will get more repayment time through a new Pay as You Grow flexible repayment system.

This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.

 

The Government also intends to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.

 

The chancellor also announced an extension in applications for the government’s coronavirus loan schemes until the end of November.

 

Further guidance will be issued in due course.

See: https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan

steve@bicknells.net

 

Have I paid enough National Insurance to get the State Pension? Reply

From April 2016 the number of qualifying years to get the full New State Pension has been 35 years, before that it was 30 years.

You can find out how many qualifying years you have by logging onto your government gateway

On the main page go to the bottom and click on ‘View your personal Tax Account’

Then go to the National Insurance box and click on ‘view gaps in your record’ you will then get the summary below and details for each year

You have:

  • xx years of full contributions
  • xx years to contribute before 5 April 20xx (retirement year)
  • xx year when you did not contribute enough

Eligibility – New State Pension

You’ll be able to claim the new State Pension if you’re:

  • a man born on or after 6 April 1951
  • a woman born on or after 6 April 1953

The earliest you can get the new State Pension is when you reach State Pension age.

Your National Insurance record

You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension. They do not have to be 10 qualifying years in a row.

This means for 10 years at least one or more of the following applied to you:

If you’ve lived or worked abroad you might still be able to get some new State Pension.

You’ll need 35 qualifying years to get the new full State Pension if you do not have a National Insurance record before 6 April 2016.

https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension

Qualifying years if you’re working

When you’re working you pay National Insurance and get a qualifying year if:

  • you’re employed and earning over £183 a week from one employer
  • you’re self-employed and paying National Insurance contributions

You might not pay National Insurance contributions because you’re earning less than £183 a week. You may still get a qualifying year if you earn between £120 and £183 a week from one employer.

Gaps in your National Insurance record

You may get gaps in your record if you do not pay National Insurance or do not get National Insurance credits. This could be because you were:

  • employed but had low earnings
  • unemployed and were not claiming benefits
  • self-employed but did not pay contributions because of small profits
  • living abroad

Gaps can mean you will not have enough years of National Insurance contributions to get the full State Pension (sometimes called ‘qualifying years’).

You may be able to pay voluntary contributions to fill any gaps if you’re eligible.

https://www.gov.uk/voluntary-national-insurance-contributions

steve@bicknells.net

What is the Kick Start Scheme? Reply

You can use the Kickstart Scheme to create new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment. The job placements should support the participants to develop the skills and experience they need to find work after completing the scheme.

Funding is available for 100% of the relevant National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions and employer minimum automatic enrolment contributions. There is also £1,500 per job placement available for setup costs, support and training.

Funding is available following a successful application process. Applications must be for a minimum of 30 job placements. If you are unable to offer this many job placements, you can partner with other organisations to reach the minimum number.

If you are a representative applying on behalf of a group of employers, you can get £300 of funding to support with the associated administrative costs of bringing together these employers.

Kickstart is not an apprenticeship, but participants may move on to an apprenticeship at any time during, or after their job placement.

The Kickstart Scheme is available in England, Scotland and Wales.

https://www.gov.uk/guidance/check-if-you-can-apply-for-a-grant-through-the-kickstart-scheme#who

steve@bicknells.net

 

New Client Resources on our Website Reply

 

Client Learning Centre 

Welcome to the learning centre!

The resources our website are designed to help you with new ideas, news, training and the tools to move your business forward, expand opportunities and to get you where you want to be!

Talk to us about any information contained on our website. We are with you all the way!

steve@bicknells.net

 

 

 

Bicknell Business Advisers are now Starling Bank Partners Reply

 

Who are Starling Bank?
Founded in 2014 by Anne Boden, Starling is the UK’s first mobile bank offering super-fast setup,
beautifully simple money management and 24/7 support, all with no monthly fees. From small
businesses with big ambitions to freelancers figuring out tax returns, Starling’s award-winning
business bank account is designed to make entrepreneurial life a little easier.


Key features
# No monthly account fees
# Speedy setup
# Apply in minutes, with no three week waits.
# Integrate with Xero, QuickBooks and FreeAgent
# 24/7 UK customer support
# Stay in the know
# With real time payment alerts and categorised transactions
for spending insights.
# Easy deposits
# Deposit money at over 11,500 Post Office branches*. Send cheques via freepost, too.
# FSCS protection
Starling are a fully registered bank and the FSCS protects any money you keep with us up to £85,000 for
eligible customers.**

Who’s eligible for a Starling business bank account?
• You’re the owner of a limited company and you’re the only person with significant control
(PSC) over it.
• You’re part of a limited company with multiple owners. With our multi-PSC account, you and
your fellow PSCs will each get a Mastercard debit card and access to a beautifully simple
mobile bank account. For more information, read our blog post titled ‘Introducing: Multiowner mobile business accounts for limited companies’.
• You’re self-employed. Our sole trader account is available exclusively to those who already
have a Starling Bank personal account.
Entities engaged in, or linked in any way to, certain activities may not be able to open or have a business
bank account with Starling. Visit our Legal Documentation page at https://www.starlingbank.com/legal/
and select Business Current Account Terms for more information.

Getting started
Apply in minutes
It takes just a few minutes, direct from your mobile. No paperwork or branch visits required.
● Click on your Accountants application link https://www.starlingbank.com/business-account/?site_id=accounting_partners&creative_id=Bicknell_Business_Advisers
● Download the app from Google Play Store or the App Store.
● Enter your personal details
● Verify who you are by uploading your identification documents and sending us a short video
● We’ll carry out some quick checks at a UK Credit Reference Agency
● Provide a few details about your business, such as its day to day activities and online
presence
● We will then look to approve your application as soon as possible so you can start making
the most of all the features to help you manage your business finances better.

Ready to switch to Starling?
With the Current Account Switch Service (CASS), you* can make Starling your main business bank account in
just seven working days. It’s worth noting that the CASS service is currently only available to Starling business
customers with companies that have one person of significant control.

 

steve@bicknells.net

Making Tax Digital – When will the next stage start? Reply

The dates for MTD for Business seem to change constantly, the Government and HMRC seem unable to create a plan and stick to it.

Yesterday we had a new announcement

From April 2022, the programme will be extended to all VAT registered businesses with turnover below the VAT threshold (£85,000), and from April 2023, it will apply to taxpayers who file income tax self-assessment tax returns for business or property income over £10,000 annually. https://www.gov.uk/government/news/government-sets-out-draft-agenda-for-a-21st-century-tax-system

The income tax pilot has been running for sometime now and it was expected to go live in April 2021 so basically its been pushed back 2 years.

But in the meantime all VAT registered business need to adopt digital ways to prepare and file VAT as a priority and it will become enforceable by 2022.

What is MTD for Income Tax?

  • Digital business records
  • Quarterly summary of income and expenditure sent to HMRC via software
  • Add personal income at the end of the year
  • Finalise affairs using software – replaces existing Self Assessment Return
  • For sole traders, landlords and partnerships
  • Affecting around 1million tax payers
  • Will include bank interest, dividends, charitable giving

steve@bicknells.net

 

Summer Economic Update 2020 – Is there a give away for you? Reply

Chancellor Rishi Sunak presented the Summer Economic Update against a backdrop of economic uncertainty caused by coronavirus (COVID-19) lockdown.

 

Our summary of the Summer Economic Update provides an overview of the key announcements arising from the Chancellor’s speech. Measures include a new Job Retention Bonus to support the phasing out of the Coronavirus Job Retention Scheme (CJRS), a VAT reduction for businesses in the hospitality and tourism sector and a temporary increase to the nil-rate band of residential Stamp Duty Land Tax (SDLT).

 

Additionally, throughout the Summary you will find informative comments to help you assess the effect that the proposed changes may have.

 

If you would like more detailed, one-to-one advice on any of the issues raised in the Chancellor’s speech, please do get in touch.

 

steve@bicknells.net