Full list of services for when you must and must not use the reverse charge.

When you must use the reverse charge

You must use the reverse charge for the following services:

·         constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services

·         constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence

·         installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure

·         internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration

·         painting or decorating the inside or the external surfaces of any building or structure

·         services which form an integral part of, or are part of the preparation or completion of the services described above - including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works

When you must not use the reverse charge

Do not use the charge for the following services, when supplied on their own:

·         drilling for, or extracting, oil or natural gas

·         extracting minerals (using underground or surface working) and tunnelling, boring, or construction of underground works, for this purpose

·         manufacturing building or engineering components or equipment, materials, plant or machinery, or delivering any of these to site

·         manufacturing components for heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems, or delivering any of these to site

·         the professional work of architects or surveyors, or of building, engineering, interior or exterior decoration and landscape consultants

·         making, installing and repairing art works such as sculptures, murals and other items that are purely artistic signwriting and erecting, installing and repairing signboards and advertisements

·         installing seating, blinds and shutters

·         installing security systems, including burglar alarms, closed circuit television and public address systems

It has been a tough past 12 months for everyone. A lot of our plans have been ruined due the ongoing pandemic and we are still not sure when we are expecting better days. We should not let 2021 be a repeat of 2020. The best plan is to move forward and move better.

We are one month down and 11 more to go, although we are probably keeping count on the number of lockdown days we are in. 2021 shouldn’t be another year of standstill, this should be the year to plan.

There is support out there available for the economic environment to soften the blow. The furlough scheme is still available at 80% to help cover wages for non-working staff. The Welsh government has helped with the economic resilience fund. For full details of the grants, click here to see what is available.

Is there something you have been wanting to do for your business, but have held back on doing so? You should write down your goals and set a plan to achieve this. We need to make 2021 a positive stepping stone to achieve the most we can for our business. Is there a sales target you want to hit? Is there software or machine you want to purchase? Writing down what you will need for this is the best way to plan.

You should sort out your goals in short term and long term. What is it that you want to achieve in the next month, or 6 months, or 1 year or 5 years?         Click here for a great template that you can work off to get started.

Set your Goal what do you want to achieve in one years time, 3 years time,

or 5 years time.      WRITE IT DOWN

Then piece together what you need to do in small manageable tasks what you need to do to achieve this goal.   It does not even have to be a goal for the business, but a personal goal that the business can help you materialise.

Watch your costs, time runs away with us so easily, and so do the costs. Make sure you are tracking these. If you need to renew a contract, do so. 

It’s a telephone call, it’s a form. What have you got to lose? But to gain you will.  Don’t be afraid to negotiate even with the large companies.

What you want to say at the end of this year 2021, I not only lived through a pandemic and survived it, but I made something of my year that is 2021.

We have to plan and overcome this pandemic, we have to strive to progress.

If you want help with budgets or cashflow, get in touch with us and we can discuss on 02920 653 995. You can find all our latest information on www.crossaccountingservice.co.uk

If you have sold an asset that has increased in value, then Capital Gains Tax will be due. It is the gains that you will pay tax on and not the amount of money received. When Capital Gains Tax is due, it is more than often, when a house has been sold. Although Capital Gains Tax will be due when you have sold a painting, stocks and shares, sale of a business etc…

So, for example, if you have bought a house for £120,000 and sold it for £190,000 then Capital Gains Tax will be due on £70,000. You do not pay any Capital Gains Tax if you have sold a house that is your main home and residence. You also do not have to pay Capital Gains Tax if all your gains in a year are under your tax-free allowance.

Your tax-free allowance also known as the Annual Exempt Amount for Capital Gains for this current tax year (2020/2021) is £12,300.

You do not pay Capital Gains Tax on assets you give or sell to your husband, wife, or civil partner, unless,

• You separated and did not live together at all in that tax year
• You gave them goods for their business to sell on

If they decide to sell later, they may have to pay tax on any gain. Their gain will be calculated on the difference in value between when you first owned the asset and when they sold it. They should keep a record of what you paid for the asset. 

The rules have changed from April 2020.

 If you sell a house, you must report and pay any tax due within 30 days of selling. Before you had until your next self-assessment to report and pay. If you have not reported and paid any gains within 30 days of selling, HMRC can charge penalties and even interest on any late payments.

You will have to register and you’ll need a Government Gateway user ID and password to set your account up or sign in. If you do not have a user ID, you can create one the first time you sign in.

You will need the following information at the ready,

• Property address and postcode
• Date you got the property
• Date you exchanged contracts when you were selling or disposing of the property
• Date you stopped being the property’s owner (completion date)
• Value of the property when you got it
• Value of the property when you sold or disposed of it
• Costs of buying, selling or making improvements to the property

Once you have an account you can sign in at any time to report Capital Gains Tax on UK property or see any returns you have already sent.

Once you have sent your return to HMRC, you will be notified on how much you owe in Capital Gains Tax, how to pay and when to pay by.

How much do I pay?

Rates on Capital Gains varies. If you are a higher rate taxpayer you will pay,

• 28% on your gains from residential property
• 20% on your gains from other chargeable assets

If you are a basic rate taxpayer, the rate depends on the size of the gain and your taxable income.

1. Work out your taxable income
2. Work out your taxable gains
3. Deduct your annual exempt amount from your taxable gains
4. Add this to your taxable income
5. Work out which tax rate you pay

If the amount falls within the basic income tax band (£12,501 to £50,000 for 2020/2021) you will pay,

Example

With the latest announcement and ever-changing forms of support, it looks like the Government have given in to the pressure and will continue with the furlough of 80%. The furlough scheme also known as the job retention scheme is to last until March 2021. This is to support businesses with the cost of employees’ wages as it seems likely to be in and out of a ‘firebreak’ lockdown.

Coronavirus job retention scheme

This is like the original scheme when it started up back in March. The scheme contributes the wages of people who cannot do their jobs, either because their workplace is closed, or because there is no longer enough work for them.

About 10 million jobs have already been claimed for, with an estimated two million people still on furlough at the end of October.

The government will pay 80% of salary for any unworked hours, capped up £2,500 per month, with employers responsible to pay pension and National Insurance contribution. If staff are on furlough, they cannot undertake any work for you. Any work done by staff, will then be the responsibility of you paying 100% for hours worked.

Rishi Sunak, the chancellor said the furlough extension meant the plans to pay a £1,000 job retention bonus to companies for every furloughed staff member they kept on until the end of January would now be scrapped. 

Support for the Self-Employed

Support for the self-employed will also be increased for November to January to a similar level as the furlough scheme. So, the grant will cover 80% of profits up to a total limit of £7,500. Please note that this grant will be treated as income, and tax implications will apply.

Applications will be open from 30 November 2020 for those who are eligible and have been affected by coronavirus. The government's original plan was for this third grant to only cover 40% of average monthly trading profits, with a limit of £3,750 in total. This was then updated to cover 55% of trading profits, but just a few days later was extended again to 80%.

Economic Resilience Fund 

These packages of support are designed to cover as much of the Welsh Economy as possible and are mainly focused around providing financial support for businesses.

There are two types of fund available. You will have to choose the correct one that applies to you.

Lockdown Non-Domestic Rate Grant

Grant 1
Business can get a grant of £5,000 for retail, leisure and hospitality businesses that have been forced to close and occupy properties with a rateable value of between £12,001 and £51,000.

Grant 2 
A grant of £1,000 is being made available to ALL businesses eligible for small business rates relief in Wales with a rateable value of up to £12,000

• Businesses eligible for small business rates relief that have been subject to local restrictions for 3 weeks or more and have been materially impacted (>50% reduction in turnover) up to the 23rd October will be eligible for a further grant of £1,000

•  and a discretionary enhanced £2,000 top-up grant will be made available on an application basis for those businesses with a rateable value of £12,000 or less who are forced to close by the firebreak lockdown.

You are not eligible for the Lockdown Non-Domestic Rate Grant if, you are eligible for, or have received, the Lockdown Discretionary Grant from your Local Authority.

The second of the fund is the Lockdown Discretionary Grant.

Lockdown Discretionary Grant

Grant amount 1

A discretionary grant of £1,500 is available to assist businesses that have:
•    Been forced to close as a result of the national firebreak lockdown
•    OR are able to demonstrate that the national firebreak lockdown will result in at least a 80% reduction in their turnover for that period

Grant amount 2

a discretionary grant of £2,000 is available to assist businesses that have:
•    Been forced to close as a result of the national firebreak lockdown
•    OR are able to demonstrate that the national firebreak lockdown will result in at least a 80% reduction in their turnover for that period

AND 

have been subject to local restrictions for 3 weeks or more up to the 23rd October and experienced at least a 50% reduction in their turnover for that period.

You cannot apply for both Grant 1 and Grant 2.
You are not eligible for the Lockdown Discretionary Grant if you are eligible for, or have received, the Lockdown Non-Domestic Rate Grant from your Local Authority, if you have 50 or more employees and If the business generated less than 50% of your income, the business must be your main source of income.

The grant will be open to applications from the timeframe of 28th October to 20^th November 2020 or when the fund is fully committed.

The Local Authority will deal with applications on a first come first served basis. This may lead to applications not being appraised after they have been submitted if the fund is fully committed.

The Local Authority aim to process grant within 30 days of receiving the application. If your application is unsuccessful, you will receive an email outlining the reasons for rejection. There unfortunately is no appeal process available if unsuccessful.

As summer has ended and the colder nights approach, it can be a bit tough to take with the local lockdowns in place. We need to try and stay spirited and make the most of our situation. If you are having to close or reduce hours, make sure to keep promoting your business on social media, so once you are back, you are still in front of people’s mind. There is some support still out there, carry on reading to see what you can apply for before the deadlines approach.

Coronavirus Loans

The Chancellor, Rishi Sunak has announced that businesses that have borrowed money through the government's loan scheme, such as the “bounce back” loan and the “Coronavirus Business Interruption Loan Scheme” would be given more time to repay the money.

A new Pay as You Grow flexible repayment system has been introduced by the chancellor for small businesses who took out the "Bounce Back". It means borrowings can be repaid over ten years instead of the original six-year term.

The longer repayment time also applied to small and medium-sized firms who borrowed under the “Coronavirus Business Interruption Loan Scheme”.

Businesses will also have more time to apply for these loans, application dates for the schemes had been due to end in October.

Job Support Scheme

As furlough comes towards the end, the chancellor announced a new replacement scheme for the Job Retention Scheme (furlough). From 01 November, the new scheme known as Job Support Scheme will see that the government will contribute towards the wages of employees who are working fewer than normal hours.

Any hours worked by the employees the employer will continue to pay their usual wages of the hours worked. For hours not worked, the government and the employer will each pay one third of the equivalent salary. The government’s contribution will be capped at £697.92 a month.

Kickstart Scheme

With Coronavirus effecting everyone, some of the hardest hit were the young people. The Kickstart Scheme provides funding to employers to create new 6-month job placements for young people aged between 16 – 24 who are currently claiming Universal Credit and at risk of long-term unemployment.

This is the government’s plan for jobs and to create hundreds and thousands of new, fully funded jobs across England, Scotland and Wales. More details are yet to come out and the first placements are likely to be available from November.

The Kickstart Scheme will cover 100% of the National Minimum Wage for 25 hours a week as well as the employer National Insurance contributions and employer minimum automatic enrolment contributions.

There will also be extra funding to support young people after the 6-month period to help build their experience and help them move into sustained employment after they have completed their Kickstart Scheme.

Self-Employment Income Support Scheme

The previous support for the self-employed has been decided by the government to be extended. The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a 3-month period.

You must currently be eligible for the original Self-Employed Income Support Scheme, though you do not need to have claimed it. It must be declared that you are actively trading and that you are impacted by the pandemic. HMRC will provide more details about claiming in due course.

VAT Reduced Rate

There was a series of new measures introduced to help hospitality, holiday accommodation and attractions sector. These included VAT being cut to 5%, effective from 15 July 2020. The VAT cut will remain in place and has been extended to run until 31 March 2021.

For restaurants and cafés that provide food services for both take away and dine in, the temporary reduction in the VAT rate only applies to;

·         Food for consumption on the premises on which they are supplied

·         Non-alcoholic beverages for consumption on the premises on which they are supplied

·         Hot takeaway food for consumption off the premises on which they are supplied

·         Hot takeaway non-alcoholic beverages for consumption off the premises on which they are supplied

We all need to continue supporting each other, shop local wherever possible, helping the small independent shops. Let’s follow government guidelines and rules, to stop a spike in cases and who knows, our sacrifices may be worth it when we may be able to celebrate come Christmas.