After the notable announcement last week about the Job Retention Scheme and Self-Employment Income Support Scheme, the more recent financial updates in relation to COVID-19 are likely to have less of an impact and possibly affect fewer people. Nonetheless, they are still important to know and we appreciate if they help just one person are still worthwhile.
As more details are released on various funding schemes or updates to taxation are announced, we are noticing more enquiries from clients who require further clarification or just a little extra reassurance that they have understood and interpreted the information correctly. Please do not hesitate to contact us. We are here to help. This is what we do. We will probably be able to answer your question quickly giving you peace of mind and allowing you to plan your next steps.
Mortgage Holidays – Renters and Landlords Protection
The Financial Conduct Authority (FCA) has confirmed proposals to extend mortgage payment deferrals until 31 October 2020. This extension applies across residential and buy-to-let (BTL) mortgages, providing relief to landlords whose tenants are experiencing difficulties due to the ongoing COVID-19 situation.
Customers that have already taken a payment holiday on their mortgage, should be offered ongoing support for a further three months, with options including a full or part payment deferral. If you have not yet applied for a payment deferral and are experiencing financial difficulties due to Covid-19, you will still be able to do so until 31 October 2020.
It is important to note that this is a deferral of a loan and as such you will still be charged interest for the period you’re not making payments. This interest will be added on to the total cost of your mortgage and factored into future repayments.
In addition, the recent new law which saw landlords being unable to start new possession proceedings to evict tenants who are who are having difficulty with rent payments due to the impact of COVID-19, has also been extended until 31 October 2020.
Help for Scottish B&Bs via Newly Self-Employed Hardship Fund
The Scottish Government has announced that small B&Bs, who are ineligible for other financial support due to not having a business bank account, will be able to apply for funding which is included in the Newly Self-Employed Hardship Fund.
The funding will be administered by local authorities and applications are expected to open on 15 June. More details in relation to the Self Employed Hardship Fund can be found in our earlier update.
Child Benefit – Reduced Income Could Mean You Can Claim
If your income has altered as a result of the COVID-19 crisis eg. through being furloughed or made redundant, it may affect your eligibility to claim Child Benefit if you have previously opted out to avoid the High-Income Child Benefit Charge.
Child Benefit is calculated on ‘adjusted’ net income for a full tax year. Therefore, if you have had, for example, three months of either no pay or lower pay than usual, you will need to do a calculation to establish what your overall average income will be for the year, to determine if you are below the threshold.
If your expected income has fallen below £60,000 for the current tax year (2020/21) it could be worthwhile reviewing whether you should make a claim for the benefit. Equally, if your expected income is above £60,000 it still may be worthwhile, as although you will be required to repay the benefit, this will not be due until 31 January 2022. Therefore, if cashflow is a concern this could be worth consideration.
A claim can be backdated for up to three months, so if you decide to claim the benefit now but were made redundant, for example, a month ago, you can claim from the date you were made redundant.
If you require any assistance is assessing whether you are eligible to claim child benefit as a result of new circumstances please do let us know.
Domestic Reverse Charge for the Construction Industry Delayed
The Domestic Reverse Charge, which was being introduced by HMRC to try and tackle fraud has been further delayed. It was due to be brought in from 1 October 2020 but has been delayed until 1 March 2021 due to the impact of COVID-19 on the construction sector.
The charge would see a major change to the way that VAT is calculated for businesses in the building and construction industries. You can read full details of the implications of the Domestic Reverse Charge on our website.
Employee Taxable Expenses and Benefits
The government has released information about how to treat certain expenses and benefits that may be applicable to employees during the COVID-19 crisis.
Information can be found here on the GOV.UK website and it includes how to report these to HMRC.
The list of expenses and benefits is pretty extensive and some of the guidance does not allow much flexibility to assist employees bearing in mind the current exceptional circumstances. We would therefore recommend you read the information quite carefully and if you have any questions or require further clarification please get in touch.
The list includes:
- Provision of accommodation
- Paying or refunding fuel and transport costs
- Free or subsidised meals
- Company car availability
- Employee Car Ownership Schemes (ECOS)
- Salary sacrifice
- Employer provided loans
- Employees working from home
Quotas extended for Inshore Fishing (Scotland only)
Further to the announcements in relation to support for the fishing and seafood processing industries, the Scottish Government has confirmed inshore fishermen will be able to access additional fish quota. The additional fishing opportunities are aimed to help diversification into new markets by accessing different fishing opportunities.
Details of the announcement can be found here on the GOV.SCOT website.
Looking for Work or Looking for Workers (Scotland only)
The job market has been erratic to say the least since COVID-19 restrictions were introduced. Many staff have been made redundant and many firms have needed to find new staff very quickly.
As a result, the Capital City Partnership (a not for profit registered charity) have launched a website to assist businesses looking to recruit urgently to respond to high demands as a result of COVID-19 and for those looking to secure work.
The site covers opportunities, including volunteering opportunities, across Edinburgh, East Lothian, Midlothian, West Lothian, Fife and the Scottish Borders. The website is www.c19jobs.org.
Information correct as of 05 June 2020