Winter 2020 Newsletter
As shorter days and colder mornings are upon us, so the creeping rise in Covid-19 cases also serves to restrict our activities and shrink our worlds to maximum gatherings of six people at best and no household mixing whatsoever at worst.
Within this bleak landscape of struggling businesses and restricted social activities the government’s support measures also keep shifting as the original Coronavirus Job Retention Scheme winds down to the end of furlough and employers and employees look to transition to the Chancellor’s latest iteration of government support. Employers who are able to retain their furloughed staff will be rewarded with a bonus payment in the new year.
With additional restrictions and local lockdowns already coming in, in October Rishi Sunak announced further measures for businesses temporarily forced to close but still with property bills to pay. They will be offered grants of up to £1,500 every three weeks to help cover their costs, while employees will receive two-thirds of their salaries. But remember that most of the support grants for businesses and individuals are taxable. While tax payments can be deferred into 2021, these will eventually have to be accounted for.
Even before the end of the CJRS HMRC is already investigating ways to recover furlough payments issued this year to businesses that either didn’t use the money to top up furloughed employees’ pay, or whose position changed, making them no longer eligible for the grant.
Meanwhile with the anticipated autumn Budget now postponed to spring next year, speculation continues about how the Chancellor is going to pay for the considerable support schemes he has set up for businesses and employees. Higher rate taxpayers are thought to be the likely target, and we suggest changes to CGT could be the means to recover some funds.
Looking forward to more normal times, you may be keeping profits in your trading company. This is a tax-efficient strategy, but holding cash investments and property on your balance sheet may affect your ability to claim other tax reliefs.
For information on the new support grants, taxes due on those grants and payment arrangements, see our October newsletter, which covers these topics and more in considerable detail. And as always do get in touch if any of the issues covered affect you and your finances.
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