All posts by Gillian

Exam Success

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Despite COVID and the restrictions it has placed on all our lives over the last 15 or so months we are absolutely delighted that two of our ICAS students have passed their final exams and are now just a few months away from being fully qualified Chartered Accountants.

Jessica and Chloe both came to Drummond Laurie with the same aim but via different routes. Here’s their paths to success!

“I first worked with Drummond Laurie during the summer of 2014 as part of my school work experience programme. I then joined full-time in August 2015, starting the ICAS School Leaver Program in September 2016.
My studies, like all our lives, were impacted by COVID and new ways of working had to be quickly developed. Initial teething problems were soon overcome and my last block of classes and final exam were completed remotely.
I am delighted to say that I have now passed my final ICAS exam and I am looking forward to the next stage of my career and the challenges and opportunities ahead.”

Jessica Wardlaw

“I started my training contract with Drummond Laurie nearly 3 years ago when I finished university.
I chose the route of chartered accountancy through ICAS as I felt the structure of the course was best suited to me. Drummond Laurie were so supportive throughout my exams and were flexible in giving me experience in areas that I felt might help for studying.
Despite being a challenging few years I’ve enjoyed getting involved in different aspects of the business, whether it be audit, tax or accounts preparation. This variety is something which definitely helped when it came to studying.
Now that I’ve passed my final exams and am a few months away from becoming a chartered accountant, I’m looking forward to see what my future at Drummond Laurie brings.”

Chloe Wilson

“Both Jessica and Chloe have been great members of our team over their time with Drummond Laurie and we are all extremely proud of their achievements. They have applied themselves extremely well to the wide variety of work they have been given and as a result have accumulated a fantastic amount of experience between them. Technical skills can be learned, however, work ethic, attitude and the desire to succeed are largely in-built. Jessica and Chloe have these attributes in abundance and this has helped them to come through their ICAS exams successfully at the same time as establishing themselves as valued members of our team. I have every confidence that they will both go on to have successful careers within our profession and I look forward to viewing their progress at Drummond Laurie for many years to come.”
David Wheeler – Managing Partner

MTD VAT & DD Payments

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HMRC will be writing to a number of businesses from June onwards in respect of Making Tax Digital (MTD) for VAT.  This letter will be sent to businesses who currently pay their VAT by DD, but for whom HMRC do not hold an email address for.

To allow HMRC to comply with UK banking regulations they require an email address in order to take payments by DD.

The letters will inform the business that their VAT DD will be cancelled between July and November, and advising them that, if they want to continue to pay by DD, they will need to set up a new instruction via their Business Tax Account (BTA).

We would advise any businesses that receive such a letter to attend to this as soon as possible to ensure any future VAT payments can be collected as normal.  This will involve updating your contact details and email address in your BTA.  For those businesses who do not have a BTA you will be required to set one up ( https://www.gov.uk/guidance/sign-in-to-your-hmrc-business-tax-account  ). Part of the set up process may involve waiting on an activation code from HMRC in the post which could take up to 10 days to arrive so we would encourage quick attention to any such letters you may receive.

Where businesses have joined the VAT deferral new payment scheme, the DD via which pays the deferred VAT is separate and will continue unaffected by this change.

Please do not hesitate to get in touch with your usual Drummond Laurie contact for any questions or assistance.

 

Rise in Minimum Agricultural Wages

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Drummond Laurie Chartered AccountantsAgricultural Wages in Scotland ‘A Guide for Workers and Employers’ was initially produced in 1996 to assist both employers and employees understand the new rules following the simplification of the Agricultural Wages (Scotland) Order (No. 44) 1996. 25 years on and these are still being produced by the Scottish Agricultural Wages Board (SAWB).

From 1st April 2021 rates and other important changes made through the Agricultural Wages (Scotland) Order (No. 68) 2021 took effect and one of the main changes was the increase in the minimum hourly rate to £8.91 for all employees. It is important to note that there has also been an increase to the dog allowance, additional sum payable to workers with appropriate qualifications and hourly overtime rate.

More on the changes can be found here

The above changes are likely to have an impact on your business in terms of an increase in wage costs. It is therefore important that you plan ahead to ensure that your business can sustain such an increase, as well as ensuring that these increases are factored into future contracts and forecasts.

Should you have any queries on the above or would like to discuss any agricultural related accounting matter please contact Margaret Bunyan on 01324 441266 or via email Margaret Bunyan

 

Additional Discretionary Grant Funding Available (Phase2)

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Update

Phase 2 of this funding seems to now be available in some local authorities today but they all seem to have different approaches and timescales for this grant.

You can get the link to your own local authority website and find out more here Find Business Support

Falkirk council have said that this fund will support businesses (with up to 250 employees),  facing short term financial challenges and hardship as a direct result of restrictions from October 2020 relating to COVID-19. This fund will provide a one-off payment which will be tiered according to the number of employees in your business.

Applicants who have already been approved within Phase 1 of the Discretionary Fund will automatically be entitled to a top-up grant. There is no need for these businesses to reapply – we will contact you.

Who can apply?

  • Limited Company (including Scottish Charitable Incorporated Organisations and social enterprises)
  • Sole Traders
  • Partnerships
  • Trusts
  • Community Interest Companies

To be eligible, business income must have been affected by more than 50% due to the restrictions and regulations introduced since October 2020.

Please note funds received via Bounce Back Loans, Job Retention Scheme or Self-Employed Income Support Scheme do not affect your eligibility to apply.

Businesses NOT eligible include:

Any business which has received, or has an application pending, for financial support since October 2020 from another fund. This includes (but is not restricted to):

  • Strategic Framework Business Fund (Closure/Restriction Fund)
  • Newly Self-Employed Hardship Fund
  • Mobile and Home Based Close Contact Services Fund
  • Scottish Wedding Industry Fund
  • Taxi and Private Hire Support Fund
  • Scottish Tour Operators/Guides Funds
  • Visitor Attraction Support Funds
  • B&B/Small Accommodation/Large Accommodation Funds
  • Campervan and Motorhome Rental Operators Fund

How much is the grant?

Grants will be tiered based on the number of employees within a business. You will need to provide evidence during the application process.

This is a one off payment.

You can apply here Falkirk Council Discretionary Fund Phase 2

Applications will be assessed on a first come first served basis and  will close at 5pm on Wednesday 31 March 2021. It may however close earlier if it becomes fully subscribed.

Chancellor’s 2021 Budget

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Chancellor Rishi Sunak delivered his 2nd budget on Wednesday 3rd March. Mr Sunak’s task was to establish how he proposes to support the economy through the rest of the pandemic, which mercifully appears to be close to the end. And secondly, to chart a course out of a financial crisis which it is estimated to have permanently wiped out 3% of our GDP. Not an easy conflict to resolve, however, on balance his response was hard to fault. He chose to extend the various pandemic support packages until September, long after the last of the lockdown restrictions are due to be lifted. That made it essential for Mr Sunak to outline his measures to reduce the deficit and to bring the UK borrowing under control.

Pandemic Support Packages

Having originally been introduced in March 2020 as a 2 month emergency measure, the Coronavirus Job Retention Scheme (Furlough) has been extended to September 2021. The scheme will run at its current level where the Government will fund the full 80% paid to the employee until June. In July the employer will contribute 10% whilst in August and September this will increase to 20%. Employees will become eligible as long as they were employed on 2nd March 2021 and an RTI submission had been made to HMRC between 20th March 2020 and then notifying a payment of earnings for that employee.

For the self-employed, the Budget has confirmed details of the 4th and 5th SEISS grants. The first of these will be 80% of average trading profits (similar to the previous 3 grants) and can be claimed from late April 2021. The fifth and final grant can be claimed from late July 2021 and will be turnover related, with a larger grant being paid to those whose income has fallen the most.

Whilst the existing government-guaranteed coronavirus loan schemes, such as Bounce Back and CBILS, are due to come to an end on 31st March 2021, it has been announced that these will be replaced by the Recovery Loan Scheme. These loans can be between £25,000 and £10 million and the government will provide the lenders with a guarantee of 80%. This scheme will be open to those who have already received support under the existing loan schemes.

The temporary 5% reduced rate of VAT for certain areas of the hospitality sector was due to end on 31st March 2021. This has now been extended to 30th September 2021. For those relevant businesses, the rate will then rise to 12.5% before reverting back to the standard rate of 20% in April 2022. This is a most welcome announcement for restaurants, hotels, takeaways, caravan parks, etc. which can hopefully start to generate meaningful revenues again soon in order to benefit from this support.

Tax Changes

Having been re-elected in December 2019 with a manifesto which committed to not increasing income tax, national insurance or VAT rates, the Chancellor may have felt that he was working with one hand tied behind his back in his quest to reduce the annual deficit. As far as raising more tax revenue was concerned he was very much backed into the “Corporation Tax” corner and will raise the basic rate from 19% to 25% in April 2025. This reverses a very long trend of reductions in corporation tax stretching back several decades. The last time this tax was increased in the UK was in 1974, before many of our staff and clients were born! For those companies with profits of less than £50,000 the rate will remain at 19%, whilst for those making between £50,000 and £250,000 the rate will taper up from 19% to 25%. Only those companies (estimated to be less than 10% of all companies in the UK) will pay corporation tax at the full 25%. This increase is expected to bring the Treasury an additional £17 billion per annum.

Whilst he felt unable to increase income tax rates due to the manifesto commitment, the Chancellor has chosen to freeze all significant tax thresholds from next year until the end of this parliament. It is estimated that this will result in 1.3 million more people being drawn into income tax with a further 1 million finding themselves paying the higher rate of tax for the first time – the so-called Fiscal Drag. This “hidden tax” is estimated to bring an extra £8 billion a year to the Treasury in due course.

As we know, many companies have suffered losses over the last year. To support these businesses, they will be allowed to carry back up to £2 million of these losses for up to 3 years (rather than the standard 1 year) in order to obtain a repayment of tax paid. This can be a welcome cash flow boost to those businesses which have suffered the most during the pandemic.

The biggest and most welcome “surprise” in the budget was the announcement of the “Super-deduction”. This applies to limited companies which invest in new plant & machinery between April 2021 and March 2023. This will allow companies to claim allowances of 130% on new plant & machinery investments which would normally qualify for 18% allowances. This is a genuine benefit to companies and, of course, is intended to stimulate investment over a period when we need the economy to get back on its feet again.

Other announcements (and “non” announcements)

The new rates of National Minimum Wage were confirmed with the hourly rate for workers aged 23 and over increasing to £8.91. This takes effect from 1st April 2021, only a few weeks away now.

We have assisted many clients in recent years to make claims under the R & D tax credit scheme and with the corporation tax rate due to rise in 2023 these will become even more valuable. There were a few amendments to the scheme which had been announced previously and which are now confirmed. However, the Chancellor also mentioned that there will be a more widespread consultation process on the current R & D schemes to ensure that they remain fit for purpose and that the UK remains a scientific and technological superpower. He also hinted that the government are not comfortable with how some of the R & D tax “specialists” who prepare claims for companies are conducting their business and so we may see some welcome policing being introduced into this area.

After much speculation on potential changes to Inheritance tax and, in particular, to Capital Gains Tax, none of any significance were announced. This is one area where the government should consider the impact of treasury leaks in advance of future Budgets. We saw many people rush through transactions on business and property sales in advance of anticipated (and leaked) tax changes which did not materialise and which, in hindsight, they may have preferred not to undertake.

You will find more details on the above as well as many other relevant matters in the Drummond Laurie budget report which can be found here.

Please do contact your usual DL advisers to discuss and to get further clarity on any matter which you believe may be of relevance to you and your business.

David Wheeler
Partner

VAT Deferral Scheme

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All VAT registered businesses were able to take advantage of deferring their VAT payments for amounts that were due to be paid in the period between 20th March 2020 to 30th June 2020.  No interest or penalties were to be charged and businesses were free to pay the amount up at any time as long as it would be paid before 31st March 2021.

HMRC are now asking businesses to pay any outstanding amounts in full by 31st March 2021.  If there are cashflow issues that will cause businesses issues in making payment they can contact HMRC to arrange a payment plan to spread the payment over 11 month instalments ending in January 2022.  Interest will accrue on any unpaid VAT at a rate of 2.6% from 1st April 2021.

To arrange the payment plan HMRC are opening an online portal which will go live on the 23rd February 2021 and will remain open until 21st June 2021.  The business owner/director must access this portal themselves.  A requirement of the payment plan is to set up a Direct Debit to make the payments, therefore, as Direct Debits can only be authorised by the owner/director an Agent cannot do this on the businesses behalf.

Conditions for the scheme

Before you join the scheme

You must:

  • create your own Government Gateway account (if you do not already have one)
  • submit any outstanding VAT returns from the last 4 years – otherwise you will not be able to join the scheme
  • correct errors on your VAT returns as soon as possible
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

 If you cannot use the online service

There may be circumstances where you cannot use the online service, for example if you:

  • do not have a UK bank account
  • cannot pay by Direct Debit
  • have dual signatories on your account

If you want to join the new payment scheme, but cannot use the online service, contact the COVID-19 helpline when the scheme opens on Telephone: 0800 024 1222. An adviser will help you join.

Newly Self-Employed Hardship Fund – now open!

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The scheme offers a one-off £4,000 payment for those whose status as being newly self-employed makes them ineligible for the UK Government’s Coronavirus (Covid-19) Self-employment Income Support Scheme.

The fund will remain open for a four-week period. The deadline for applications is 5pm on 16 March 2021.

Eligibility

To be eligible for the Newly Self-Employed Hardship Fund, you must be able to demonstrate that you:

(i)  Became self-employed on or after 6 April 2019 but before 17 March 2020 (and are therefore ineligible for the UK Government’s Self Employment Income Support Scheme because you did not submit a tax return including income from self-employment for 2018-19)

or

(ii)  Became self-employed between 1 October 2018 and 6 April 2019 but are ineligible for the Self Employment Income Support Scheme (SEISS) because you weren’t self-employed for a sufficient period of time in the 2018/19 Financial Year to demonstrate that you derived 50% of your income from self-employment

In addition, you must confirm when submitting your application that you:

  • are ordinarily resident in Scotland
  • are registered with HMRC as self-employed and have a valid Unique Taxpayer Reference (UTR) number
  • operate a business that is located in Scotland
  • trade as self-employed, not as a limited company
  • derive over 50% of your income from self-employment
  • reported trading profits below £50,000 in the financial year 2019-2020
  • started your business before 17 March 2020 and have continued to operate after 1 April 2020 (unless you are operating in a sector subject to ongoing Covid-19 restrictions which have forced the closure of your business)
  • have lost business income due to coronavirus restrictions and are experiencing personal financial hardship as a result
  • are ineligible for other Covid-19 related business grant support, including the Strategic Framework Business Fund, Covid-19 Temporary Restrictions Closure and Hardship Funds, Coronavirus Job Retention Scheme, Mobile and Home-Based Close Contact Services Fund, Wedding Sector Support Fund and Hardship Fund for Creative Freelancers
  • have taken steps to limit costs and expenditure, including through schemes such as VAT deferral and seeking a mortgage payment holiday
  • do not have access to sufficient savings or other sources of income to cover your basic living costs
  • have not breached Covid restrictions in place for businesses in Scotland

If you received funding through the first round of the Newly Self-Employed Hardship Fund launched in April 2020, you are still able to apply for support. This is a follow-on from that scheme and recognises the need for further help with living costs.

Information required

All supporting information must be submitted electronically (online).

HMRC Unique Taxpayer Reference (Your Unique Taxpayer Reference (UTR) will be required as part of the application process).

You will need to provide a recent screenshot or photo of your business tax account page from the HMRC portal clearly showing your full name and Unique Taxpayer Reference number, or another form of official communication from HMRC with your name and UTR shown.

Other information

In addition to core information on yourself and your business, such as name and address and name of business, you will also need to provide:

  • Your bank account details for this business including the sort code, account number and branch location.
  • A bank statement clearly showing evidence of business transactions. One month’s bank statement is required showing business activity from anytime during the period between 17 March 2019 and 17 March 2020. You will need to make sure your uploaded document or screenshot clearly shows the account name, bank name, account number and sort code.
  • Your National Insurance Number
  • Your business website address and/or social media web links such as Facebook or Instagram (if you have these)

Any information you give about your business (such as your registered name and address) MUST match the information held by official bodies such as HMRC.

A large number of applications for this fund are expected and they will be assessed in the order received. 

The fund will remain open for a four-week period. The deadline for applications is 5pm on 16 March 2021.

Applications can be made via this link https://www.bizsupport.scot/

 

 

Update – Bounce Back Loans

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Bounce Back Loans (BBL) were introduced by the Government last year in response to the COVID pandemic to help smaller sized businesses access finance more quickly.

The scheme allows small and medium sized businesses to borrow between £2k and up to 25% of their turnover. The maximum loan available is £50k.

The loan is guaranteed by the Government and is interest free for the first 12 months. Following this interest is charged at 2.5% per annum and the loan is for a 6 year period.

Full details of the eligibility criteria can be found at HERE

The scheme is open to applications until 31st March 2021.

It is important to note that if you have already borrowed money under the BBL but it was less than you were entitled to, you can top up your existing loan to your maximum amount. This must be done by the 31st March 2021.

Another important change to the scheme is the support being offered with regards to repaying your BBL.

You now have the following options:

  • Switch to temporary interest only payments up to 3 times, each lasting up to 6 months

  • Take a single payment holiday, pausing all repayments for 6 months

  • Extent the loan term from 6 to 10 years (at the same interest rate of 2.5%)

If you have any queries, please do not hesitate to contact your usual Drummond Laurie contact.

Discretionary Grant Fund Provided By the Scottish Government

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Update

This funding has been allocated to local authorities and they all seem to have different approaches and timescales for this grant.  Some close as early as next week and some may already be closed to new applications.

You can get the link to your own local authority website and find out more here Find Business Support

 

Are you one of the businesses that currently has been unable to access any financial support from the government? 

Perhaps this one-off discretionary grant will be applicable to your business….

The fund will support small or micro businesses (50 employees or lower) facing financial challenges and hardship as a direct result of restrictions put in place due to COVID19. Specifically, this will be aimed at businesses who have not been able to access any other Government funding support since October 2020.

A one-off grant of £2,000 per business will be available for eligible businesses.

The following categories of businesses can apply:

  • Limited Company (including Scottish Charitable Incorporated Organisations and social enterprises)
  • Sole Traders
  • Trusts
  • Partnerships
  • Community Interest Companies
  • Freelancers / subcontractors
  • Self-employed not benefiting from Self-employed Income Support Scheme (SEISS) or Newly Self-employed Hardship Fund (NSEHF)

To be eligible businesses must:

  • Have less than 50 employees
  • Be operating from premises but not registered for Non-Domestic Rates or are home based. For example, small and micro businesses in shared commercial space providing in-person services who do not have their own business rates assessment (e.g., yards, workshops, business centres)
  • Not be legally required to close but that have experienced restricted trading or demonstrable supply-chain challenges (over 50% trade affected by COVID-19 restrictions)

Businesses which are NOT eligible for the fund include

  • Any business which has received a grant through the Strategic Framework Business Fund (Closure/Restriction Fund).
  • Taxi, private hire and coach operators, Mobile Close Contact Services, Travel Agents, Tour Operators, Visitor Attractions, Wedding and Events venues and accommodation providers. Separate funding was announced for these businesses by the Scottish Government on 9th December 2020 and is expected to be made available in January and February 2021.
  • Self-employed individuals who have already received more than £750 per month as part of the SEISS scheme. Support for the self-employed continues to be available through the UK Government’s Self-employed Income Support Scheme.
  • Individuals who became self-employed after April 2020 – the Scottish Government has announced a second round of funding through the Newly Self-employed Hardship Fund in January 2021.

Closing dates for applications varies dependant on your local authority therefore we would advise you give this your immediate attention.

The application is straight forward to complete and we would encourage all businesses that meet the eligibility criteria above to apply.

Please refer to your local authority website for the application form.

If you have any queries, please do not hesitate to contact your usual Drummond Laurie contact.

 

3rd SEISS Grant Closing This Week

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The third self-employed income support scheme (SEISS) grant application closes this Friday, 29th January 2021.

The claim covers businesses and individuals who have had a new or continuing impact from coronavirus between 1st November 2020 – 29th January 2021 and is paid in a lump sum of up to a maximum £7,500 to cover the three months. You have to have been eligible under the original criteria to apply for this and you apply through your government gateway in the same way as before. Please do not hesitate to get in touch with your usual Drummond Laurie Contact if you have any queries relating to the above.

 

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