There is a lot of uncertainty surrounding finances, especially given the current circumstances. As a result, business owners and sole traders are naturally asking more questions.
With a number of key financial dates approaching, our experts have provided answers to this month’s frequently asked questions.
When does the furlough scheme end? What are the key changes in August and September?
The Coronavirus Retention Scheme, or furlough as we know it, has been extended until 30th September 2021. This means after this date the government will no longer provide financial contributions to employees’ salaries.
Until the end of August, the government will continue to contribute, but as of July 1st, this amount will begin to lower.
In July, contributions for hours not worked will lower to 70% of wages up to £2,187, and in August, 60% of wages up to £1,875.
In line with previous months, for hours not worked, employees are still required to receive 80% of wages up £2,500 per month.
This means, as of July 1st, employers will be asked to make a contribution of 10% up to £312.50, and 20% up to £625 from August until the scheme ends in September.
Should self-employed workers claim the 5th SEISS grant? How is this calculated?
The fifth and final Self-Employed Income Support Scheme (SEISS), is available to self-employed workers with lost income from 1st May to 30th September. This should be available to claim from “late July”.
To be eligible for the grant, you must have traded in the tax years 2019-20 and 2020-21 and have submitted your tax returns on or before March 2nd, 2021.
The criteria require you to either be currently trading but experiencing a lack of demand, or operating at a lowered capacity due to coronavirus, or be unable to trade due to current restrictions or measures.
Your 2019-20 self-assessment tax return will be assessed, and you will not be eligible if your trading profits exceeded £50,000. You should only apply for this grant if you honestly believe your income will take a hit in the given trading period (May-September).
Different to the previous grants, the upcoming fifth grant will be calculated based on how much your turnover was reduced between April 2020 and April 2021. Should your turnover reduction be 30% or over, you’ll be eligible to receive 80% of 3 months average trading profits, with a maximum available grant of £7,500. If less than 30%, you’ll be eligible to receive 30% of 3 months average trading profits, with a maximum available grant of £2,850.
How do I repay SEISS grants which should not have been claimed?
In the event that you realise you have claimed an SEISS grant without being eligible, or have become ineligible due to tax amendments, you must contact the HMRC. Generally, you should inform the HMRC within 90 days of receiving the grant.
If you realise you were not eligible at the time you applied for the grant, you should inform the HMRC online you need to repay some or all of the grant. After this you will be given the bank details to repay what you owe.
If following a tax amendment, you became ineligible you should tell the HMRC of the amendment using their online form. After which they will send you a letter confirming how much you owe and how to repay it.
Grants received between 6 April 2020 and 5 April 2021 can also be paid via the self-assessment tax return.
When is the next income tax liability due?
The next income tax liability payment is due on the 31st of July
P11D- who needs it and when should it be filed?
A P11D is a form which is to be completed by employers who offer benefits. It is used to declare expenses and benefits given to employees which are not subject to PAYE tax, e.g., company car, medical insurance, beneficial loans.
The P11D form filing deadline is the 6th of July.
Got a burning question? Reach out to us at email@example.com