Monthly Archives: November 2020

Self Employed Support Update

By | Blog | No Comments

Drummond Laurie Chartered AccountantsThe self-employed income support scheme (SEIS) has been extended and the third claim covers businesses who have had a new or continuing impact from coronavirus between 1st November 2020 – 29th January 2021.

From this week (30th November 2020), self-employed individuals are able to make this claim if they are eligible to do so.

If eligible, individuals will be able to claim a taxable grant of 80% of their average trading profits over the last 3 tax years, to a maximum of £2,500 per month. This taxable grant will be paid in one lump sum to cover the 3 months i.e. to a maximum of £7,500. For those who claimed the first SEIS, this will be the same amount.

More details on this scheme and eligibility can be found here Self Employed Update

Please do not hesitate to get in touch with your usual contact at Drummond Laurie if you have any queries relating to the above.

Strategic Business Hardship Fund

By | Blog | No Comments

A new COVID business support fund known as the Strategic Business Hardship Fund has been set up to replace the Business Closure Fund.

Eligible businesses will be those who that have had to close by law or those that have had to modify their operations, such as restricting their opening and  closing times, due to the tier they have been placed into.

A full list of eligible businesses and the tiers can be found on the Scottish Government website as well as a link to the local authority to apply for the grant.
More details can be found here :  November 2020 Strategic Business Hardship Fund

The grants will be paid every 4 weeks with the earliest claim date being the 2nd November 2020, the Council will make payments no later than 4 weeks in arrears.

Should you have any queries please do not hesitate to get in touch with your usual Drummond Laurie contact. If you don’t have a direct contact please call 01324 441250 or email adviser@drummond laurie.co.uk

 

Update on Annual Investment Allowance

By | Blog | No Comments

The Annual Investment Allowance (AIA) was temporarily increased from £200,000 to £1,000,000 from 01 January 2019 for a period of two years. As of 01 January 2021 the allowance was due to revert back to £200,000 going forward.

We outlined in our blog last week why careful consideration should be given to the timing of asset purchases to maximise the relief available in accounting periods which the change impacted.

The government have announced the temporary increase to £1,000,000 will now be extended until 31 December 2021.

This therefore gives businesses an additional year to utilise the higher level of allowances available.

Given the extension is only for one year, it is still advisable to plan asset purchases with appropriate consideration given to the impact of the change.

For further advice on AIA, or any aspects of capital allowances, please contact us via e-mail on adviser@drummondlaurie.co.uk or phone 01324 441250.

 

Reduction in Annual Investment Allowance from 1st January 2021

By | Blog | No Comments

Drummond Laurie Chartered Accountants

After a temporary increase to £1,000,000 in January 2019, the Annual Investment Allowance (AIA) will decrease back to £200,000 from 1 January 2021. The timing of the change means that for businesses which do not have a 31 December year end, a hybrid level of AIA will be initially available.

Below is a note of the AIA available based on the year end of the business in 2021:

It is important to note that the timing of asset purchases can significantly impact allowances available.  Under the transitional rules, allowances available on capital expenditure are determined by the date at which they are purchased.  This is illustrated above where the total AIA available is proportionally split into the periods before and after the decrease takes effect.

To demonstrate the impact of this in an example, take a business with an accounting year end of 31/03/2021 which purchases an asset costing £500,000 in the year.  The difference in allowances available if the asset is bought in November 2020 rather than February 2021 are as follows:

 

This shows an additional £70,100 in corporation tax savings can be made by purchasing the asset in the period with a higher proportional level of AIA available.  By purchasing in November the total AIA available for the 9 month period is £750,000 and therefore covers the full cost of the asset.  Delaying until February means it falls into a period with only £50,000 of AIA available and as a result the remaining £450,000 only attracts allowances at 18% as opposed to 100% with AIA.

The significant size of the decrease means that, more than ever, it is important to consider the timing of any purchase of assets to ensure that maximum tax relief can be obtained.  We would recommend that you consult with your Drummond Laurie point of contact before you make any key decisions in relation to fixed asset purchases.

For further advice on AIA, or any aspects of capital allowances, please contact us via e-mail on adviser@drummondlaurie.co.uk or phone 01324 441250.

Let's Get Started: Contact Us