Category Archives: Blog

Business Update & Eat Out Scheme

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Drummond Laurie Chartered AccountantsOur summary of the Summer Economic Update provides an overview of the key announcements arising in July can be found by following this link Business Update July 2020

Measures introduced included a new Job Retention Bonus to support the phasing out of the Coronavirus Job Retention Scheme (CJRS), a VAT reduction for businesses in the hospitality and tourism sector and a temporary increase to the nil-rate band of residential Stamp Duty Land Tax (SDLT).

The government have also launched the ‘Eat Out to Help Scheme’ which starts on Monday 3rd August.  The eat out scheme can be used all day, every Monday, Tuesday and Wednesday from 3rd to 31st August 2020.  It allows a business to offer a 50% discount on food or non-alcoholic drinks, up to a maximum of £10 discount per diner.

To be able to claim this you need to register with HMRC.  The service to claim reimbursements will be available on 7th August 2020 and registration will close on 31st August.

You must  be registered before you can start to claim.

If you would like more detailed, one-to-one advice on any of the issues raised, please do get in touch.

Car Insurance During Lockdown – Can you get a refund?

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Drummond Laurie Chartered AccountantsSince the announcement of lockdown on 23rd March 2020, there has been an evident shift in driving patterns. Invariably we have become accustomed to far quieter roads, as a direct result of individuals now working from home, or not working at all. Despite our motoring habits changing, our vehicle insurance costs have likely not followed suit.

It is believed that motor car insurance companies have therefore benefitted from surplus car insurance cover, for vehicles which have done little to no mileage, over the past 10 weeks.

This benefit is the result of two pivotal actions:

Fewer vehicles on the road has resulted in fewer accidents and claims; and

Fewer journeys being made in response to “essential travel only” has put a pause/go-slow on odometer mileage readings and consequently, estimated annual mileage on car insurance policies is now likely in excess of reality. Subsequently, premiums are higher than required.

During these difficult financial times, it is an important consideration to ponder whether the vehicle, currently sitting in your driveway and of very little use, is still costing you what it would have done, fully utilised and clocking up miles on work journeys, the school run and visiting friends and family.

Where some car insurance companies have actively acknowledged this change in their customer’s vehicle usage (through providing partial refunds) we have found that many car insurance providers are only considering these changes “on request”, with the customer required to make direct contact with their motor vehicle insurance provider. We would, therefore, urge our clients to consider contacting their car insurers to enquire about any potential cost savings available to them.

Admiral customers were the first to benefit from their car insurer’s actions, in response to the COVID-19 pandemic. Admiral has offered partial refunds of £25 for all vehicles insured on 20th April 2020, with this refund due to be made, to all relevant customers, by the end of May. No further action is required by customers. In addition, recently, LV have also announced their offering of partial refunds of up to £50 for customers who are “struggling financially”, in light of COVID-19. Unfortunately, this is not an automatic refund (and neither a blanket approach to all customers). Customers are required to contact LV directly in order to identify if they qualify for the refund.

As far as partial refunds go, there is little further to report, however, there is an urge for more to be done by car insurance companies. Despite this, many of the mainstream car insurance providers have intimated that they are willing to adjust and reduce premiums, where less mileage is being incurred. These adjustments can often be made on the company’s website, over the phone, or in some cases, on an app. It is important to firstly check that these policy changes can be made without incurring any charges. However, we have found that in most instances, these changes can be made for free. It is also worth considering removing any second drivers, where there is no requirement for these.

In line with the above, specifically, Direct Line/Churchill now provide an online form, for completion, in order for customers to update the car insurance company on current driving behaviour. Information regarding your policy, the vehicle in question and an estimate of mileage now being done, along with personal details, are required when completing the form. Following submission, the company advise that this information will be reviewed, with the customer then informed of the outcome.

Although discreetly disclosed, we are aware that some of the common car insurance providers have also implemented some of the following actions, in response to COVID-19:

  • Reduced pricing to reflect the current situation

  • Enhanced cover for NHS and key workers

  • 3 month deferrals for financial hardship

  • Interest free late payments

  • Waived administration and cancellation fees

It is therefore worthwhile exploring the above facilities, if available, when in contact with your car insurance provider.

Where any changes are made to your policy, as a direct result of COVID-19, it is important to ensure that you update your policy again, following a return to your “normal” driving behaviour.

 

OpenSpace Client Portal

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Drummond Laurie Chartered AccountantsOpenSpace is a cloud based system and provides safe, simple and secure data transfer between us as accountants, and our clients.  Not only will this fit in well within our current climate where many of us are now working remotely, it will also further enhance our obligations under the GDPR legislation.

Over the coming weeks, wherever we can, any documents we are required to share with you, whether sensitive information, or paperwork for signing, we will look to do this through this online portal.

We’ve trialled this with a number of clients now, and the feedback on the whole has been very positive, particularly when signing and approving accounts and tax returns.  No more trips to the post box to send paperwork back to us, or remembering which password we have put on a document!

The important point to note is that you are in control of your own account!

The first time we want to communicate with you via OpenSpace, we will send you an email asking you to activate your IRIS account.  Once you receive this email, click on the link to create your own password and the set-up is then complete. Any questions please get in touch with your usual Drummond Laurie contact.

 

COVID-19 – Lockdown and Company Cars

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As the UK responds to government guidelines of lockdown and essential travel only, many businesses and employees now find themselves paying tax on a company vehicle which is, at this time, rendered “non-essential” to their personal and working needs.

The reality that many employees may have a second, personal non-company vehicle, or where their food shop can be done on foot, many company vehicles are as a result not “turning a wheel”. Consequently, unnecessary tax is being paid on a benefit of no personal use.

There is, however, the option to remove this benefit charge from the employee during this period of time. By doing so, the employee is no longer faced with paying the relevant tax on their company vehicle for the period where the vehicle is not used.

Employers may also be aware, that the removal of this benefit results in the company no longer incurring Class 1A National Insurance during a period where the company vehicle is not required and not utilised.

Whilst the above actions are reasonable, it is important to highlight that HMRC will still require to see the appropriate practical measures have taken place in order to remove this company vehicle, from the employee, and thus satisfy the removal of the benefit charge on both the employee and the employer during this period of time.

For employees and employers looking to implement the above during the coronavirus crisis, there is a minimum period of time which this must be implemented for. The company vehicle must be removed from use for a period of no less than 30 days. Therefore, employees must be happy to have their company vehicle made wholly unavailable to them for at least 30 consecutive days. Any period of time which is shorter than this will be considered as a period of chargeable benefit by HMRC.

HMRC recommend the following actions take place in order to support the period of unavailability of at least 30 days:

  • Physical removal of the company vehicle from the employee and/or keys handed back to an individual at the company.
  • The employee should have no access to the vehicle. HMRC will accept that the vehicle is unavailable and that the employee is unable to gain access to the vehicle on the basis that they:
    1. Do not have access to the keys
    2. Do not have the power or authority over the individual who is holding the keys to hand them over
    3. Do not have the power to direct the person holding the keys to drive the employee to a location of the employee’s choice.
  • Written agreement between employee and employer, prohibiting private use, and reiterating that the vehicle will be made unavailable to the employee for the period of at least 30 days.
  • A log of the date that the vehicle was withdrawn from the employee and the date that the vehicle was returned and made available to the employee.
  • A log of where the vehicle has been kept during this time of unavailability. For example, confirmation that vehicle is in a locked parking site/business premises.

Where the company vehicle has not been physically returned to business premises, or a similar location

, it is recommended that odometer readings and the use of trackers are applied. HMRC will expect to see proof that the company vehicle has not been used privately during this period of time. Thus, odometer readings on the date where the keys are handed back to the company, and again on the date that the company vehicle is returned and made available to the employee, will assist in corroborating this.

For employees who are also provided with a fuel benefit, the treatment of this can be stopped in line with the company vehicle benefit charge.

We would recommend that you do speak to your adviser before implementing any changes with regards to your company vehicle benefits. HMRC have yet to release any guidance which would suggest a “softer approach” to the current benefit guidelines and thus it is important that recommended actions are followed as far as possible.

 

ICAS Appointment for Drummond Laurie

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With everything going on in the world at the minute we thought it would be nice to share some good news with you……..We are pleased to announce that our very own Margaret Bunyan has been successfully elected onto the Institute of Chartered Accountants of Scotland (ICAS) Council Board after being appointed into the Scotland East Electoral Area seat.

Margaret has worked in practice for over 13 years and has a vast amount of knowledge and experience on which to draw from. She is responsible for a diverse portfolio of clients, with a particular specialism within the agriculture sector. In addition to this Margaret is also our ICAS Counselling Member and therefore has responsibility for all of our CA and ACCA trainees.

ICAS are our governing body and the global professional body for Chartered Accountants. The ICAS Council oversees the effective management and direction of the Institute’s affairs, it’s an exciting appointment filled with opportunities and we are confident that Margaret will be able to make a very valuable contribution going forward.

Congratulations Margaret, we are very proud of you !

Important Budget Changes

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Drummond Laurie Chartered AccountantsWith everything going on in the world currently it would be easy to overlook some of the changes introduced in the budget announcement just over a month ago…..we would just like to draw your attention to two important changes you should be aware of now that we are entering another tax year!

Employment Allowance

The Employment Allowance allows certain businesses in the UK who employ workers to reduce their annual National Insurance (NI) bill by up to £4,000. New rules on the types of businesses eligible to claim the reduction are being introduced for the 2020/21 tax year.

Prior to April 2020, organisations simply answered a ‘Yes/No’ question to inform HMRC that they were claiming the Employment Allowance. From April 2020 employers must make extra checks to work out whether they are eligible, and submit a new claim for the EA each year.

Eligibility for Employment Allowance from 6th April 2020

From 6th April 2020, the Employment Allowance will apply to smaller businesses only. Businesses with an Employer NI bill of £100,000 or more in the previous tax year (2019/20) will not be able to claim the allowance. For the 2020/21 tax year, the Employment Allowance is increasing to £4,000 (was £3,000 in the 2019/20 tax year).

The complete eligibility criteria for Employment Allowance can be found on the gov.uk website or follow the link  HERE

National Insurance contribution thresholds to rise to £9,500 per year

Confirmation that the Government is increasing the threshold for when National Insurance becomes payable to £9,50

0 is good news, saving 31 million people across the UK up to £104 a year. This means those earning under £9,500 will pay no National Insurance whatsoever.

Even more welcome is the confirmation that those taken out of paying NI won’t lose out on credits towards their state pension. Anyone earning above the Lower Earnings Limit, which will increase with inflation from its current level of £6,136 will still be entitled to a year’s credit. This is important because people need at least 10 years’ credits to receive any state pension and 35 years to receive the full state pension which is expected to rise to £175.20 a week from April. Without this provision, people might have gained from paying less NI today only to suffer from a reduced state pension infuture.

MTD Digital Link Delay

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Drummond Laurie Chartered AccountantsThis may have gone unnoticed by most businesses but HMRC announced this week a one-year delay to its enforcement of rules specifying the digital transmission of transaction data through the Making Tax Digital (MTD) for VAT return filing process. This extends the soft landing period put in place for digital links when MTD was made mandatory for registered businesses above the VAT threshold.

Businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.
Please contact your usual Drummond Laurie adviser or Julie McVicar if you have any questions on this matter.

Drummond Laurie’s Coronavirus (COVID-19) Response

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Given the developing coronavirus situation we are putting practical measures in place to respond in a practical and proportionate manner.  These measures put people’s (both our own team and our clients) health and wellbeing first, whilst also ensuring business continuity for our clients.

We are following the Government’s latest advice, and will continue to do so, and are giving our teams regular updates, support and guidance.  We now want to share with you how we will continue to support you in this fast-changing situation in the coming days and weeks.

Our established business continuity plan guides how we respond.  We anticipate that our teams will increasingly work and communicate with you remotely.  We are confident that we can continue to offer the same high levels of service and support that you have come to expect from us.  We would note the following in particular;

  • The vast majority of our team have access to the necessary software and systems to allow them to work remotely.  Many of them already do this on a regular basis.
  • You will be able to contact most of your key contacts by telephone using the usual numbers in the event of an office closure (which we are not anticipating at present).
  • We are already a “paperless” business and so are used to working without access to hard copy records.
  • Our payroll team are all capable of working remotely and this will be a priority service for us to continue unaffected for obvious reasons.
  • We have the ability to manage Bacs payments remotely and again this will help ensure that our client’s staff and key suppliers continue to be paid at the appropriate times.

We would also note that we have telephone and video conferencing facilities in place and these can easily be used temporarily in place of face to face meetings.

We appreciate your understanding and can assure you of our commitment to continuing to support you and your businesses through these unprecedented times.  Please do not hesitate to get in touch with your usual Drummond Laurie contacts should you have any questions on the above.

David Wheeler, Ian Bilsland & Mary Jack, Partners

COVID-19 Update for Businesses

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Please find below updates from the government websites as of today, Monday 16th March 2020.  We’ll update as and when new information becomes available.

New measures to limit the impact of COVID-19 on the business community in Scotland have been announced and the following steps will be put in place to support businesses during the 2020-21 financial year:

  • 75% rates relief for retail, hospitality and leisure sectors with a rateable value of less than £69,000 from 1 April 2020
  • £80 million fund to provide grants of at least £3,000 to small businesses in sectors facing the worst economic impact of COVID-19
  • 6% rates relief for all properties across Scotland, effectively reversing the planned below inflation uplift in the poundage from 1 April 2020
  • a fixed rates relief of up to £5,000 for all pubs with a rateable value of less than £100,000 from 1 April 2020

The Finance Secretary is also expected to contact all local authorities urging them to respond positively to requests from rate payers for payment deferrals for a fixed period.

In addition, the U.K. government has brought forward legislation to allow small and medium sized businesses and employers reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences, but employees will not need to provide a GP fit note
  • eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. These businesses can contact HMRC’s new dedicated COVID-19 helpline for advice and support. To ensure ongoing support, HMRC have made a further 2,000 experienced call handlers available to support firms and individuals when needed. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

The Scottish Government business helpline number is 0300 303 0660. The helpline will be open Monday to Friday 8.30am to 5.30pm.  Callers should select option one to speak to the COVID-19 team.

As always, we are on hand, please get in touch with your usual Drummond Laurie contact in the first instance.

 

Budget 2020

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Following the UK’s departure from the EU, Chancellor Rishi Sunak presented the 2020 Budget against a backdrop of economic uncertainty.

Our Budget Summary provides an overview of the key announcements arising from the Chancellor’s speech. However, it also looks beyond the headlines and offers details on the less-publicised changes that are most likely to have an impact upon your business and your personal finances.

Additionally, throughout the Summary you will find informative comments to help you assess the effect that the proposed changes may have on your business and you personally.

I would specifically draw your attention to the following;

  1. The maximum Employment Allowance is increasing from £3,000 to £4,000 for eligible employers.  From 2020/21 this allowance requires to be claimed.  I can confirm that if Drummond Laurie run your payroll then this claim will be made by us and no action is required by our client.
  2. The National Insurance threshold will increase to £9,500, effectively giving the vast majority of employees an increase in their take-home pay of £2 per week.  Again, this will be automatically applied through the payroll operation and no action is required by our clients.
  3. The increase in the National Minimum Wage rates has been confirmed for 2020/21.  This confirms a significant increase of 6.2% with the NMW for workers over 25 years old rising to £8.72 per hour.  Again, for those clients where Drummond Laurie run your payroll, these increases will be made as a matter of course and no action is required by you.
  4. Finally, the Chancellor has announced significant change to the operation of Statutory Sick Pay [SSP].  SSP is normally payable only after the first 3 days of sickness.  It will now be payable from day 1 of sickness.  Further, SSP is normally an “Employer Cost”, i.e. it is funded by the Employer.  As announced yesterday, the Government will fully refund employers (with less than 250 employees) for SSP paid for up to 2 weeks per employee where the absence is as a result of COVID-19.  We understand that this will operate on a “Claim Back” basis.  As such, Employers should maintain a record of staff absences and SSP paid to allow this reclaim to take place in due course.

Drummond Laurie Chartered Accountants

The Drummond Laurie summary of the Chancellor’s 2020 Budget is now available via this link on our website Budget Statement – Read Now

If you would like more detailed, one-to-one advice on any of the issues raised in the Chancellor’s Budget speech, please do get in touch with your normal Drummond Laurie adviser.

David Wheeler, Partner

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