Following yesterday’s cancellation of the proposed autumn budget, the Chancellor of the Exchequer Rishi Sunak spoke in Parliament today (24.09.20) to address the next phase of the Government’s economic support during this crisis, dubbed their ‘Winter Economy Plan.’ The chancellor began his speech on a positive note, stressing that the UK is in a better economic position than in March, however he emphasised the need for more financial provisions to accompany the realisation that the virus will remain prevalent for months to come. The measures outlined today can be summarised as follows: 1. Jobs Support Scheme (JSS) The JSS will replace the furlough scheme (officially known as the Coronavirus Job Retention Scheme) ...

Earlier this month, the Government announced a new COVID-19 aid measure aimed at businesses who are required to close as a result of local lockdowns. In light of recent outbreaks of coronavirus, local lockdowns and restrictions have been introduced in high incidence areas. As a result of these new rules, some businesses (e.g. hospitality venues) will be restricted in the services that they can offer and may be required to shut their doors. Going forward, where a business is forced to temporarily close due to local lockdowns or targeted restrictions, they can make a claim to receive a grant of up to £1,500 per property every three weeks. Each payment will be made for a 3-week lockdown period, with each 3-week lockdown period triggerin...

In our previous article Protect & Thrive - Asset Protection & Holding Companies (30 March 2020) we looked at the benefits of inserting a 100% parent company above a trading subsidiary. But what happens when a group decides to simplify and rationalise its structure instead? This article focuses on situations where there are a number of holding companies above one or more trading companies and looks at the reasons why a group may choose to streamline its structure and the different options available. Benefits of a Simpler Structure A group structure may have arisen as a result of one or more management buy-outs and/or capital reduction demergers, rather than a direct conscious choice by the directors. Each company is required ...

The Coronavirus pandemic has not only endangered the health of the UK, but it has also had a huge impact on the economy. This financial strain has led to many people choosing to give up/use some of their income to support: 1) Businesses or employers; or 2) Charities. But what are the tax implications of these acts of generosity? Supporting a business or an employer People are showing support for a business or an employer in several ways such as: 1) waiving salary or bonuses before they are paid; 2) waiving dividends; or 3) giving salary or bonuses back to a business or employer after they have been paid. The tax treatment of this support depends on which route is taken (i.e. 1, 2 or 3). 1. Waiving salary or bonuses before they are...

It is common for business/financial decisions to be guided by the tax treatment of the transaction. However, in light of the tax legislation's complexity taxpayers may seek advance assurance before the event takes place to guarantee that the expected tax implications will indeed apply. In light of this, it is possible to write to HMRC to request advance clearance of the tax treatment of certain transactions. The tax legislation provides for clearances for certain arrangements (i.e. statutory clearances), and HMRC also provides a non-statutory clearance service for areas where the rules do not otherwise provide for it. The most common transactions that we as a firm seek clearance from HMRC include: Share-for-share exchanges Pu...

Many businesses have carried out new activities during the ongoing Coronavirus pandemic or alternatively were forced to temporarily suspend all trading activities. In light of the above, HMRC have recently updated the section in their Business Income Manual which relates to ‘Crisis-driven changes to trading activity’ to now cover the potential specific impacts of the Coronavirus pandemic on trading activities. This blog will cover the main changes: 1. New Trading Activities During COVID-19 & Lockdown When a business carries out an entirely new activity which is completely unrelated to its previous activities, then this will usually be treated as the commencement of a separate trade. However, if a business starts carry...

On the 8th July 2020, Rishi Sunak (the Chancellor of the Exchequer) set out the next round of financial provisions aimed at counteracting the contraction of the economy due to the impact of coronavirus. The headline policies from the fiscal event, dubbed a 'mini-budget,' are as follows: 1.Furlough Funding Eased - The furlough scheme will gradually wind down before concluding at the end of October. Currently, the Government pays 80% of wages up to £2,500 plus associated National Insurance contributions (NICs) and pension contributions leading to a maximum grant of £2,804 per employee. However, there are several changes proposed in the coming months to ease this finance: August - Employers will now need to pay employers NICs a...

In these uncertain economic times, as a business owner you may feel that your company cannot continue to trade; your company may be on the brink of being forced into compulsory liquidation by your creditors or you may have identified that your company is insolvent and unfortunately does not have a future. Alternatively, you might be considering retiring early or taking up employment elsewhere. In any case, closing down your company may be an imminent reality. This blog will look at three different options available for doing so and the tax implications of each of these. 1. Creditors’ Voluntary Liquidation (“CVL”)   A company is usually placed into CVL when it is insolvent or about to become insolvent and the dire...

HMRC have announced temporary changes to to the time limit and rules for notifying an option to tax for VAT on land and buildings. Current Time Limit Normally, HMRC will need to be notified of an option to tax within 30 days of opting to tax the property. This can be done by either: printing and sending the signed notification to HMRC emailing a copy of the signed notification to HMRC The notification need to be signed by a relevant person in the business. Temporary Change to Time Limit Where a decision is made to opt to tax a property between 15 February 2020 and 30 June 2020, the time limit to notify HMRC is 90 days. For an overview of the tax implications of opting to tax a property, please see the following art...

Individuals and businesses with land/buildings may benefit from opting to tax the property for VAT. Furthermore, there may be tax implications to consider when acquiring or selling land/buildings that are already opted to tax. Why Opt to Tax Property? Typically, property that is rented will be exempt from VAT (subject to certain exceptions). To this end, the the owner/business will not charge VAT on rent and will not be able to reclaim VAT on costs. Where the expenses of letting the property are significant, then the VAT on the expenses may represent a material cost. However, owners of commercial (non-residential) property have the option to tax the property, meaning: Output VAT will be chargeable on supplies i.e. rent Inpu...