In August, Esther Guy joined a team of ladies to swim to France as part of a relay, to raise money for Bowel Cancer UK.

Here’s a journal of the event…


girls ALIVE Channel Relay

Wednesday 4th August 2021

The Team (in swim order):

  • Rona Lucas
  • Esther Guy
  • Rebecca Johansson
  • Jenny Davidson
  • Sarah Clarke
  • Sarah Brownwood

 

Coach: Amanda Sharples

Observer: Lorraine Mackie

Boat: Anastasia

Pilot: Eddie Spelling (with crew: Son Mike and Son-In-Law Rob)

Conditions

Shipping Forecast

WIND

Variable 3 or less, increasing 4 at times.

SEA STATE

Smooth or slight.

WEATHER

Showers.

VISIBILITY

Good.

 

Actual Weather on the day:

Clear skies & sunshine, 21 degrees, water temperature 17 degrees. Calm waters in-shore but very lumpy in the middle.

Tuesday 3rd August

Left Surrey in two cars, Esther with Sarah B, Sarah C & Jenny and Amanda with Becca and Rona.  Arrived in Dover and checked in to Travel Lodge in time for a team dinner.  Early to bed with alarms set for 5am.

 

Wednesday 4th August

 

0540 hrs

Met in hotel reception to head to the marina.

Amanda & Esther dealt with parking permits, the rest of the team met our observer, Lorraine.

 

0600 hrs

Headed onto the quayside to board Anastasia

So many bags!  Passed up to the crew and then climbed on for the safety briefing as the boat left the marina.  Two border force jetskis were blocking the exit so lots of horn blasting to get past!

Saw Sammy the seal bobbing around just outside the harbour walls.

Sea was calm and so it was a gentle trip around to Shakespears Beach where Rona dives beautifully off the side of the boat and swims to shore.

0633 hrs

The boat’s horn blasts (but Rona doesn’t hear it) lots of waving and shouting to signal that it’s time for her to swim! Rona powers towards the boat and begins her hour with the sun rising in the sky and the nervous chattering of the team.  Music is turned on, 10 hour Spotify playlist on shuffle!

Solid swim, luckily without any dramas.  Rona is breathing bilaterally so every sixth stroke we can cheer, wave and encourage her on.  Lots of thumbs up and clapping.

It’s such a clear day that we can see France but it’s a very long way off!

Lorraine finds the laminated time sheets, which show 45, 30, 15 and 5 minutes to go.  Rona has asked just to be shown the 5 minutes sheet, which we do with an abundance of cheering and waving, to which she smiles and acknowledges with a wave.

 

0733 hrs

This is Lorraine’s first time observing a relay team and so for the first changeover the pilot’s son Mike takes charge.  

Esther is up second and he talks Lorraine through the process of waiting until there’s a minute to go, undo the safety chains, and send the swimmer carefully down the ladder to the platform at water level.  With a few seconds left he signals Esther to jump in and calls Rona to the boat.  Esther swims around the back of Rona, careful not to touch her.  Mike had said to wait until it’s okay to swim so there’s a few strokes of breaststroke until he gives the all clear and she changes to front crawl. 

Conditions are good for Esther’s swim, however a goggle malfunction means that from about the 15 minute marker water is inside them and the boat is now just a white blob with nobody visible on board! The goggle straps continue to roll up Esther’s hat and with 5 minutes to go she removes them altogether as is worried that she won’t be able to see the call to come in.  

Swimming without goggles is fine, we’ve done it plenty of times before, the difficulty is what to do with the goggles, tuck into the costume, set them free in the sea or hold on to them?  Decided to hold but took some wriggling around to get the lenses into a position where they weren’t filling with water and adding drag!

The call to come in is a welcome relief to the goggle drama.

Back on the boat it takes a couple of minutes of sitting to calm down and release the adrenaline. Amanda thrusts drinks at Esther and demands quick dressing!

0833 hrs

Becca enters the water with her lovely long stroke and rhythmic leg beat, Esther & Amanda decide it’s like the glockenspiel instrument, very soothing.  

The white cliffs of Dover are still visible but fading slowly.  It’s surprising how busy the channel is, there are ferries all the time and lots of tankers.  Also during Becca’s swim there was a Border Force boat towing a rib, apparently a regular sighting on these trips.

The seaweed is increasing and a huge floating mass of weed and debris floats past on the opposite side of the boat.  The sun is glistening on the water, it’s really calm and beautiful.  The WhatsApp group is pinging wildly as our supporters wake up and wish us all the best.

 

0933 hrs

Becca is called into the boat and Jenny takes over with her elegant stroke, we all notice how much her technique has improved in the last year.  She looks efficient and streamlined in the water.

There are lots of jellyfish visible but Jenny manages to avoid them, it’s like a computer game, but without the electronic music!

The swell is starting to build, photos and videos don’t do it justice but we can tell from training that Jenny is having to work hard during her swim.  

The boat is rocking and rolling and Rona now feels poorly, she takes to the front of the boat where she dozes in the sunshine.

Following a swimmer changeover the team is split between those at the back of the boat supporting the person who has just got out of the water and the others are sat up front encouraging the swimmer in the water.  

The boat is alongside the swimmer at all times and the engine ticks over gently, now and then the pilot uses a little thrust and the swimmer finds themselves at the back of the boat looking up at Lorraine.  A dozen strokes later the swimmer is peaking around the bow of the boat feeling super fast, only for the thrust to take you to the back again.  It’s a constant hour of cat and mouse!

Amanda spends most of her time at the back doing amazingly in her role as coach / mother-hen.  She has the swimmers bag in front of her and is rummaging for clothes, whilst also thrusting food and drink at them.  Refuelling is so important but not sure any of us got that part right, mostly we didn’t eat enough, despite bringing ALL the food with us!

 

1033 hrs

Time is up for Jenny as Sarah C takes over, there’s a few strokes of breast stroke as she catches her breath and then into her beautiful front crawl.  Sarah has been really nervous about her speed compared to the others but her hour in the sea proves these fears to be unfounded.

Unfortunately there is a LOT of seaweed during Sarah’s swim, at one stage those on the boat can see her heading for a massive patch with no way of avoiding it.  Our cheers and waving becomes manic, it’s probably obvious to her that something nasty is on it’s way, but she powers through, barely missing a stroke.

Her next challenge is a jellyfish, which stings her thigh, leaving a nasty mark and a bit of pain.  The ammonia pen was worth buying after all!

1133 hrs

Until now all swimmers have been on the port side of the boat, which is where Eddie prefers them as it’s next to the pilot’s window, however there is the choice to swim on the other side if we want.  Sarah B is left-handed and therefore spends her hour on the starboard side, breathing towards the boat every second stroke.

Sarah has a textbook stroke which is long and elegant, it might look to some that she’s not trying but the efficiency of her pull through the water means that she speeds away and continues a consistently quick pace for the duration of her hour.

Sarah goes into the zone and at one point Lorraine is worried that she’s too far from the boat.  She asks Esther to encourage her back.  Lots of waving and shouting does the trick.

Of all the swimmers Sarah B seems to be able to chat whilst swimming, there’s lots of comments from her about weed, jellyfish, asking how long is left etc although she never misses a stroke!

The swell is picking up now and Sarah C is now feeling very poorly with some sickness over the side of the boat.  Becca also has a headache and joins Rona to nap up front.

We try to demonstrate to the WhatsApp group how challenging conditions are but don’t mention the casualties as we don’t want to worry family and friends.

 

1233 hrs

It’s time for Sarah to come in.  The rib boat being towed behind means that there’s a long line in the water and Sarah has been advised to duck under it carefully to avoid rope burns.

That’s a complete team rotation done and so it’s Rona’s turn to get back in, returning to port side once again.  

She has spent almost five hours laying down feeling really bad so we all appreciate how hard this is going to be.  It seems that the water is refreshing though and from the boat we’re impressed that Rona’s second swim is as strong as the first, with lots of smiles reassuring us that she’s doing okay.

 

1333 hrs

Time for Esther once more and by now the waves are lumpy and the boat is rolling.  Luckily we’ve done lots of training in washing machine conditions and so whilst hard work the waves aren’t too scary.

The sun is now high in the sky and is behind the boat so from the water Esther can just see the silhouettes of her teammates.  There’s lots of cheering and encouragement from the front of the boat, which feels odd as Esther hasn’t changed anything about her stroke but then she impales a huge jellyfish with her right hand and everything becomes clear!  The jellyfish leaves a sting down two fingers and onto her wrist but it feels like a stinging nettle injury, so not unbearable.

1433 hrs

It’s Becca’s turn to return to the sea and despite mentioning a slight headache she seems fine.

Less than ten minutes into her hour Becca switches to a single breaststroke, a sign that something is wrong.  She is then horribly sick into the water.  All aboard gasp and feel immediately sorry for poor Becca.  Amanda reminds us not to show our horror and instead we plaster smiles to our faces and shout words of support and encouragement.  Later Becca mentions her confusion at our smiling throughout her misfortune!

Twice more Becca is sick into the water and all on the boat fight back the tears as we feel totally helpless.  The pilot is aware of Becca’s sickness and agrees that we can offer her a drink to rinse her mouth.  Amanda removes her shoes and climbs down the ladder, we call Becca over, who initially refuses, perhaps she thinks her swim is being abandoned?  We make it clear that she’s allowed to take a sip and that the relay is not in jeopardy.  A quick mouth rinse and Becca resumes her front crawl once again.  Whilst a little slower than her first swim we are amazed in her strength to continue when she must be feeling absolutely terrible.  Such a warrior!

 

1533 hrs

Jenny’s hour can’t come quick enough, we all want Becca out of the sea and taken care of.  The waves are still pounding and Lorraine suggests that Jenny switches to starboard to get some shelter from the boat.

Sarah C is still being sick, Rona is lying asleep on the front, Amanda and Lorraine are taking care of Becca, so Esther & Sarah B sit up front to cheer Jenny from the side.

Despite all that’s going on everytime Jenny makes eye contact there’s a massive smile and she appears to be having a great swim.  Later Jenny tells us that her second hour flew past.

The sun is behind her as she swims making for some great pictures and videos to look back on later.

 

1633 hrs

Time for Sarah C once again and as before she remains on the starboard side.

Sarah went into her hour feeling very rough indeed but you would never have thought so judging by her second swim.  She stays close to the boat, a little too close at one point when we lose sight of her under the bow.  

Esther is cheering her on from the side rail (as there are very few places left on the boat without casualties!) From this angle the eye to eye contact is VERY intense.  Esther cheers Sarah on with every breath towards the boat, hoping that it might help just a little bit.

The pilot is checking Becca as he’s concerned for her well being, she is slumped over a bucket on the floor at the back of the boat, fully dressed with dry robe but still cold, not like Becca at all.  He tells Amanda that Becca needs to be sitting upright and suggests we move her to the front of the boat.  She’s propped up at the bow and forced to nibble a ginger biscuit, it seems to help.

Lorraine says that the pilot is very worried about Becca and doesn’t think she’ll be able to swim again.  This means that if we don’t finish in the next three hours (Sarah B, Rona, Esther) then the event will be abandoned.  So much pressure.

He tells Sarah B that if she gives it everything she’s got we could still make it.

 

1733 hrs

Time for Sarah B to give it all she’s got.  Still on the starboard side and with the sun glistening on the slightly calmer sea, Sarah powers into her hour.

Each hour Lorraine has been making a note of our stroke speed, she shouts to Esther that before her swim Lorraine told Sarah she needed to increase by two extra strokes per minute, Lorraine is very pleased that Sarah has actually increased by three, proving that she’s giving it her everything.

Esther sits at the front to cheer Sarah on but she rarely looks up, instead clearly focussed on her stroke.  Lorraine comes forward and tells Esther & Amanda that we’re 800m from the shore, a quick look around and France does seem very close all of a sudden!

The pilot takes Rona downstairs to talk her through the landing process and Mike is released onto the rib boat to warm it up.

Sarah B sees the rib being used and starts imagining all sorts of worst case scenarios.  She is pleading with her eyes for us to give the 5 minute shout but there’s still 9 minutes on the clock so we can’t say anything just yet.

Excitement on board is building as landing the relay is suddenly a reality but Sarah B is unaware of any of this.  

There’s a bit of disappointment that we can’t all swim to shore together, Eddie had said this would be possible if we landed on the beach but the tides mean that we’re at the cap and therefore a rock landing is too dangerous for multiple people.

 

1833 hrs

Sarah is called towards the boat, which she does with huge relief and immediately bursts into tears (from the immense effort and turmoil of emotions).

Rona dives off the back, salmon like, and sprints towards the coast.  Amanda has to tell her to calm her windmill arms, later likened to a wind up bath toy, as it’s too far to sprint.

Anastasia bobs out at sea and Mike follows Rona to shore on the rib boat.  All on board chatter nervously.  We try to take photos but she’s too far away.

Mike stops Rona before she’s at the rocks and we all wonder what’s wrong, later we’re told he was warning her of the rocks close to the surface as we’re landing at the part called Dragon’s Teeth.  The rib bobs a few metres out and Rona does the last bit by herself.

We see her climb a rock then fall down, then she’s up again and the boat horn is sounded followed immediately by our cheers!

Lorraine announces an unconfirmed success of 12 hours 13 minutes.  That’ll do nicely!

Rona swims back to the rib boat and Mike returns her to Anastasia.  She wobbles up the ladder and empties her swimming costume of French pebbles for us to keep as memorabilia of the day, crazy lady!

Eddie says it will take 2.5 hours to get back to England, but that time flies past.  The champagne cork is popped and the bubbles flow.  We are chattering wildly and giddy with excitement.  Becca has perked up a bit but Sarah C is still feeling very rough.

The sun is setting and as we approach the white cliffs of Dover we have a lovely view of the castle up on the hill.

The lighthouse warns of the harbour wall approaching and a green light signals our entry into the marina.  Sarah’s phone rings and her husband tells us to look to our right, on the harbour wall are Sarah’s family and friends with placards and cheering wildly.

Anastasia moors where she started and we unload our bags, still heavy with the food we didn’t eat.  A bottle of wine and biscuits are presented to the crew and to Lorraine.  She says that we are a team she will never forget for our spirit and all the dramas of the day.

We head back to the Travel Lodge in time for dinner and last orders at the bar, but nobody has the energy for booze.  We want hot food and our beds.

Thursday 5th August

The arrangement is to meet at 8.30am for breakfast.  Esther is downstairs first and waits a long time alone until realising that her phone is still on French time and that she’s an hour early!

The team joins for food and drink, a quick song of Happy Birthday to Esther, some lovely presents and then it’s time to check out and head for home.

What an emotional, challenging, enjoyable event.  We made a terrific team and feel honoured to have supported each other to complete the challenge together.

We did it.  We swam the English Channel!

 


A MASSIVE THANK YOU!

Thank you so much to everyone who sponsored us.

Our chosen charity for this event is Bowel Cancer UK, who support and research to save lives.  All donations will go to this amazing charity to educate the public and professionals about the disease and campaign for early diagnosis and access to best treatment and care.  We need people to stop dying of bowel cancer.

All donations make a difference and our fundraising page will remain open for a few more weeks.  If you were inspired by our achievements and would like to give some money then we’d be very grateful.

https://www.justgiving.com/fundraising/estherguy

We hope you enjoyed our journey!

Retail Daily Gross Takings

 

If you work within the retail sector then you will need to review your till software to check your compliance, in line with MTD for VAT.

 

Background

As you may be aware businesses are required to have digital links in place to support their VAT returns, there was a soft-landing period but this has now ended.

 

Details of your sales must be kept, maintained and preserved digitally. The regulations refer to this information as your ‘electronic account’.  Whilst those in retail do not need to create a sales invoice for every customer purchase made, you do need to keep a digital record of your daily gross takings (DGT).

 

The most common way of keeping a digital record is to use of a point of sale system, such as a till, where the VAT liability of the goods being sold is decided at the point when the customer buys them.

 

Most tills are able to produce a report at the end of the day (often called a z-reading) which give a daily gross takings figure and shows the split between zero and standard-rated sales.

 

Action required

  • Confirm if your till software provides a report of daily gross takings
  • Get into the habit of downloading this report regularly
  • Forward it to a4c to be incorporated within Xero, to comply with the Making Tax Digital laws when filing your VAT returns.

 

If you are unsure how to do this then please speak to your till software provider.

 

Of course, if you have any questions regarding MTD, then don’t hesitate to get in contact with the a4c Team on 01737 652 852.

 

Budget Report 2021

The 2021 Budget Report was delivered on Wednesday 3rd March by Rishi Sunak. What was announced and how might his new tax measures affect you?


Coronavirus support

The Coronavirus Job Retention Scheme (furlough scheme) will be extended until the end of September 2021.

      • From an employee’s perspective, nothing will change but employers’ contributions will increase.
      • From July, employers will only be able to claim for 70% of furlough pay and must make up the 10% difference so that furloughed employees continue to receive the 80% minimum.
      • From August, this employer contribution increases to 20% of furlough pay with a 60% grant from the Government.

 

The fourth tranche of the Self-Employment Income Support Scheme will go ahead and there will be a fifth on similar terms. 

      • Those who have submitted their 2019/20 tax returns will now be able to make a claim, which should catch anyone newly self-employed who missed out last time. 
      • As before HMRC will be in touch with you directly when the claim scheme opens.  

 

Working Tax Credit claimants will also be given more support for the next six months, with a one-off payment of £500.  

 

The temporary £20 per week increase in Universal Credit will be extended by six months.  

 

A new Restart Grant of up to £6,000 per premises for non-essential retail businesses in April and up to £18,000 for firms that open up later.  

 

A new Business Loan Scheme for all business offering 80% government guaranteed loans between £5,000 and £10 million.  

Business tax

Corporation Tax will return to a two-tier system from April 2023 when:

      • the rate of corporation tax will rise to 25% for companies with profits exceeding £250,000
      • companies with profits up to £50,000 will continue to pay 19%
      • companies with profits between £50,001 and £250,000 will pay tax at 25% reduced by marginal rate relief rate so that the main rate won’t apply until their profits excess the higher amount

 

Businesses will be allowed to carry back trading losses to set against tax paid on profits of the previous three years.  

 

From April 2021, the new super-deduction (we assume this is an enhanced capital allowance) will cut companies’ tax bills by 25p for every pound they invest in new equipment.  Further details expected at the end of March.  

 

VAT will remain at 5% until 6 September and then an interim rate of 12.5% until 31 March 2022 for hospitality and tourism businesses.  

 

VAT registration threshold will remain at £85,000.  

 

Consultations on R&D Relief and the Enterprise Investment Scheme will look at ways of improving their tax incentives.  

Personal tax

The temporary increase to the stamp duty land tax nil rate band for dwelling of £500,000 will be extended until the end of June 2021.  It will then fall to £250,000 until the end of September when it will return to its normal level.  

 

Personal allowances for 2021/22 will increase as planned to £12,750 but will then stay the same until April 2026.  

 

The higher rate tax threshold will rise to £50,270 for 2021/22 but will also remain the same until April 2026.  

Other measures

Some businesses will be given incentive payments of £3,000 for all new apprentice hires of any ages  

 

Starting from 4 March first-time buyers will be allowed to take 95% mortgages (i.e. only a 5% deposit will be required) backed by a partial government guarantee.

Reference

For the full Budget Report 2021 visit Budget documents.

Or to discuss how the Budget Report 2021 will impact you and your business give us a call on 01737 652 852.

 

January 2020

This week Esther attended a Brexit webinar which covered the key changes you will need to consider if you trade with customers in the EU.

This is a brief summary with links provided for you to obtain further information, if required.

The Key Brexit Changes

      1. Exporting – customs declarations
      2. Work Permits – country dependant
      3. Data Sharing – ecommerce
      4. Northern Ireland Protocol

1.    Exporting Goods

Whilst at first glance it would appear that we have a tariff-free agreement in place with the EU (with some exceptions such as plant and meat exports) this is not necessarily the case.  Instead you need to consider the Rules of Origin.

Rules of Origin

Where goods originate in the UK the export can be tariff-free, however where the goods originate elsewhere there could be tariffs applied, even if they come to the UK for modification before being sold to customers in the EU.

For example, cane sugar is imported to the UK from the Caribbean, where it is then refined in the UK to make the end product (sugar) which is packaged and sold to supermarkets across the world.  As the sugar cane does not originate in the UK, tariffs will apply when the sugar is sold to supermarkets in the EU and customs declarations will be required.

The rules of origin apply in both directions, therefore impact goods you export and goods you import.

Businesses will be able to self-certify the rules of origin for their exports, however qualifying evidence will need to be submitted.  You have a 12-month grace period to gather this evidence.

Exporting to Northern Ireland is tariff-free but businesses need to register for the Trader Support Service on Gov.Uk.

Gov.uk/rules-of-origin-for-goods-moving-between-the-uk-and-eu

Exporting Goods via the Post Office or a Postal Service

Businesses who use a parcel provider to send their goods to customers in the EU will need to consider the value of what is being sent.  The rules now match those already in place for goods sent to the US and other overseas locations, outside the EU

·         Under £900

Where the value of the goods being posted is less than £900 you need to complete a customs form online

·         Over £900

Where the value of goods being posted is greater than £900 you need to carry out a full customs declaration using your EORI number

EORI numbers

All VAT registered businesses should have automatically been provided with an EORI number but if  you haven’t received this you can apply online, it takes around 5 days to be confirmed – Gov.uk/eori

You may need more than one EORI number:

  • If you move goods to or from the EU your EORI number will start with GB
  • If you move goods to or from Northern Ireland you will need an additional EORI number that starts with XI

 

Expect to see an increase in your postal charges as the shipping providers will need to increase fees to cover additional administration costs.

2.    Business Trips to the EU

Unlimited free movement within the EU for UK citizens has now ended.  In its place we are restricted to 90 days travel within a 180 day period, without the need for a visa.  This applies to business travel and holidaymakers.

Visa-free

There are only certain work-related tasks you are allowed to perform without the need for a visa, a few examples include:

  • Conducting meetings and consultations
  • Research and design
  • Attending trade exhibitions
  • Tour guides, where the tour starts in the UK.

 

Excluded:

  • Direct sales activity to the public
  • Musicians on tour

Work Permits

Where the activity is excluded from the visa-free travel you will need a work permit. This is required for each country you’re travelling to.

You will also need to check that the qualifications which permit you to work are recognised in the country you are working in.

ESTA Forms

From 2022 all travellers to the EU will need to complete an EU version of the ESTA form and pay a fee (approx. £6).  ESTA stands for Electronic System for Travel Authorization.

3.    Data Sharing

Nothing much changes in this area for now.  The General Data Protection Regulation (GDPR) rules will remain, as they have been written in to UK law.

E-commerce & online advertising

If you do business with countries in the EU you will need to ensure that you comply with the rules of each country you’re selling to.  This could potentially mean a lot of work to ensure you meet the online sales rules for each place your website is used to sell your products!

4.    Northern Ireland Protocol

The Northern Ireland Protocol avoids a hard border on the island of Ireland, in line with the requirements of the Good Friday Agreement.  Instead the EU border is effectively in the Irish sea.

This means that Northern Ireland remains part of the EU single market and therefore goods from Britain need to be treated as exports to the EU with the necessary customs declarations fulfilled, however as Northern Ireland remains part of the UK, trade with customers here remains tariff-free.

It’s a complicated aspect of the Brexit arrangement you should review this protocol carefully if you have customers in Northern Ireland.

Conclusion

Beyond the politics of Brexit there are a lot of people within the government and at HMRC who want this to be an opportunity for businesses.

There is a wealth of information on the Gov.UK website (Gov.uk/transition), however lots of the rules are not yet set in stone and agreements are still being discussed, therefore there’s going to be a period of time in 2020 where you need to keep checking the rules.

As an alternative source of information, you could visit the Brexit Support Hub, hosted by Enterprise Nation.  Here you will find lots of advice, along with advisors available to help by phone and email.

Enterprisenation.com/Brexit-advice-service/

 

In the coming weeks the team at a4c are booked onto a number of courses which relate to VAT and accounting treatments following Brexit.  We will be sending out further information in this area once we’ve digested it ourselves.

Watch this space…

 

 

 

 

As you may be aware Limited Companies are only permitted to pay dividends out of distributable profits.

 

Due to the Coronavirus Pandemic, you may have had profits available when the dividends were declared but due to the various lockdowns there is no longer the profit to cover the transaction(s).  What happens next?

Unlawful distributions

Dividends paid where there are insufficient profits are classed as unlawful distributions.  When a director shareholder receives a dividend which is unlawful, they must repay the dividend to the company.

In the current circumstances, you may be strapped for cash and simply unable to repay it and therefore the dividend has effectively become a loan to the director from the company.

Corporation Tax Charge on director loans

Be aware that unless the loan is repaid within nine months of the company year end there will be a 32.5% tax charge under s.455 Companies Act 2010 (CA).  This tax is due and payable when corporation tax for the period would normally be paid.

Beneficial loan?

Another snag is the possibility of a benefit in kind charge in respect of beneficial loan interest on the director shareholder, where the loan is in excess of £10,000.  In this instance, the loan value is added to the payroll and tax and NI will be due via a P11d reporting requirement, payable in July.

Repayment options

The ideal situation would be for you to get back on your feet and repay the loan before the s.455 charge kicks in.  This gives you at least nine months from the company year end to find the funds.

You can do so by voting a dividend from post-lockdown profits to credit the loan account.

The alternative is to declare a bonus, however, this would be taxed as employment income attracting a higher NI charge (both for the director and the company) and losing the advantage of the dividend allowance.

If you are worried about your finances and would like to book a health check call with Esther then please get in touch (esther@a4cgroup.co.uk).

 

Keeping up with the constantly changing government guidlines surrounding the Coronavirus Pandemic has been challenging.

If you run a business impacted by the restrictions then it’s even more important that you’re able to quickly understand what financial support is available to you and how to access it.

At a4c we’ve been doing our best to publish updates on our website and directly to clients via newsletters, but often the latest post we’ve written is quickly out of date!

Find coronavirus financial support for your business

This week we came across a useful online tool on the Gov.uk website which we want to share with you.

Click on the link below and follow the steps for a comprehensive list of financial support available to you and your business:

https://www.gov.uk/business-coronavirus-support-finder

If you then have questions about the support schemes identified please don’t hesitate to get in touch with the team at a4c on 01737 652 852 or email esther@a4cgroup.co.uk.

The government has announced that the self-employed will receive taxable grants to cover November 2020 to April 2021 if your business has been affected by coronavirus.

So, are you eligible?

Who can get the grant? The scheme has only been extended for those that are currently eligible for the Self-Employment Income Support Scheme (SEISS) and are actively continuing to trade but are facing reduced demand due to coronavirus.

If you have not claimed a grant under the SEISS so far, but were eligible to, you can still claim the new grant. The key difference between this grant and the previous ones is that you must be actively trading, it does not appear to be available if you would be trading but are not able to due to Coronavirus.

How much will you be paid? The first grant will cover a three-month period from the start of November until the end of January. The government will provide a taxable grant covering 20% of average monthly trading profits, paid out in a single instalment covering three months’ profits.

The maximum amount is £1,875 for three months, so to get the full amount you need to have average profits of £37,500 per annum.

The second grant will cover the start of February until the end of April. The government will review the level of the second grant and set this in due course.

How do we apply? HMRC has not yet released details of how to apply but with the previous grants, individuals were contacted directly by HMRC

CORONAVIRUS

The Chancellor has announced that the Job Support Scheme (JSS), which will replace the Coronavirus Job Retention Scheme from 1st November 2020, will be expanded to help protect jobs and support businesses required to close as a result of coronavirus restrictions.

What’s the extra help if your business is required to close its doors? If your business has to temporarily close because of coronavirus restrictions, from 1st November, HMRC will pay two thirds of your employees’ salaries up to a maximum of £2,100 per month. Under this scheme, you will not be required to contribute towards wages and will only be asked to cover NI and pension contributions.

Eligibility. You will only be eligible to claim the grant while your business is subject to restrictions, i.e. forced to close, and your employees must be off work for a minimum of seven consecutive days. It’s likely that pubs, clubs, restaurants and other hospitality businesses will be the first to claim. It’s our understanding that pubs and restaurants etc. that are forced to close to diners but which provide a takeaway service will be covered by the scheme. This is subject to confirmation once we have all the detail.

How will it operate? This scheme will operate alongside the JSS and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via an HMRC claims service that will be available from early December.

Increased cash grants will also be available. Increased cash grants will also be available if your business is required to close. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to up to £1,500 every three weeks which was available previously.

Whilst workplaces were closed for an extended period, more and more people took to creating dedicated workspaces at home. HMRC is now targeting these spaces – how can you avoid a tax bill?

Sanctuary. As offices closed across the UK back in March, working from home became the norm for many people. Even when things began to reopen later on, many have opted to keep doing so. However, combining this with the closure of schools for nearly six months has meant a need to segregate work life from home life. One option to achieve this is by converting an unused space, for example a spare bedroom, into a dedicated office. But could this lead to a tax problem in the future?

The problem. The issue stems from restrictions to private residence relief (PRR). This generally works so that you don’t pay capital gains tax (CGT) when you sell a property that has been your only (or main) home at a gain. However, if any part of the property is used exclusively for business purposes, HMRC argues that it can’t be a “residence”, and so the relief must be apportioned. The following simple example illustrates the potential consequences.

Example. Ricky bought his three bedroom home in 2000 for £250,000. He converted one of the bedrooms (comprising 20% of the property’s floor space) into an office, and banned his partner and children from using it. He sells the house for £550,000 in 2025. 80% of the gain, i.e. £240,000, will qualify for PRR. However, the other £60,000 is charged to CGT.

Avoid the trap. Fortunately, it is easy to sidestep this trap. Simply ensure that the room has multiple uses. Turn it into a reading room that your desk and computer just happen to be in, and it can’t be said that it is being used exclusively for business. Advertise it as a “study” or “reading room” when you come to sell it, rather than an “office”.

Tip. If the part of your home used for business is one of those fancy sheds in your garden the chance of there being a taxable gain when you sell your home is remote. You should value the “shed” separately from your main home; its sale value is likely to be less than what it cost you to install, i.e. you’ll have made a loss not a gain