Latest News


Job Retention Scheme

Following on from the Government public announcement of the grant available for staff that are furloughed more details were published yesterday and can be found by clicking the link below:

Read the latest Job Retention Scheme here 

It is designed to support employers whose operations have been severely affected by coronavirus.

The main point is that furloughed staff cannot undertake any work for you. This includes provision of services or generation of income.

If an employee is on reduced hours or reduced pay they will not be eligible for the 80% grant.

The scheme applies to any type of contract including:

  • Full time
  • Part-time
  • Employees on agency contracts
  • Employees of flexible or zero-hour contracts

You must write to your employee to explain that they have been furloughed and keep a record of communication.

Any employee hired after 28 February is not eligible.

The grant will be based on actual salary before tax as of 28 February 2020. Fees, commissions and bonuses are not included.

The grant available is based on the lower of 80% of staff actual salary as at 28 February 2020 or £2,500 plus employers national insurance and minimum automatic enrolment contributions are also included. You can top up the payment but an employee must remain furloughed for what appears to be a minimum of three weeks. The member of staff is still subject to tax and national insurance.

Any top up including employer’s national insurance will not be funded.

Many of you will engage self-employed secretarial services. On the 26 March 2020 details of grants for self-employed was announced. They should seek advice from their own accountants on their eligibility.

The situation is fluid and many questions are raised about limited companies and directors.

Many people will be on the payroll of their company but at reduced salary or have a spouse or other family members as well. They too would appear to be eligible provided no work is undertaken after they are furloughed. The Revenue have stated they will undertake retrospective audits.

Unfortunately, dividends are not included as earnings for the purpose of this grant.

Once HMRC have received your claim and you are eligible for the grant, they should pay it via BACs payment to a UK bank account. We expect this to be in April.

Financial update

From the partners and staff at Sandison Easson & Co we owe you all a debt of gratitude during this period.

All of us have family and friends that work in various sectors of the NHS and appreciate the task that will lie ahead.

What we can do to help, as we always have, is with your financial affairs. We understand that your normal working day will be altered and as such the partners and associates will be available night or day to deal with any queries you may have.

All of us are in this together.

We will still be attending to deadlines of tax returns and accounts which will be even more important as financial planning will be on your minds and you will want to focus on dealing with patients.

The Revenue will have some flexibility with regards to tax payments. These are explained below.

Coronavirus job retention scheme

Due to the speed at which this scheme has been rolled out, there remains many areas to clarify but at the time of writing we know the following:

  • All of our clients are eligible for the scheme where they employ staff through a PAYE scheme.
  • Workers are given a special status of being ‘Furloughed’ (see further information below).
  • HMRC will reimburse 80% of their wage cost subject to a maximum of £2,500 per month. 
  • Effective from 1 March 2020 if you have already had to take steps with your employees.
  • HMRC are working on their systems to facilitate the above.

We understand that one of the eligibility criteria will be that a PAYE scheme has to be in place for your employee(s).  Many clients pay salaries below the level required to maintain a PAYE scheme and at the time of writing we do not believe that anyone in that position will be eligible for the scheme.  Additionally, anyone engaging the services of as secretary on a self-employed basis cannot use the scheme but one would expect your secretary payments to be reduced following a reduction in activity.

Where eligible, HMRC will provide funds to support the worker’s wages and prevent the need to make them redundant.

Furloughed worker    

Where a business does not have sufficient work to retain the services of an employee they can designate affected employees as ‘furloughed workers’.  They remain an employee and the terms and conditions of their employment are still enforceable. 

Under the scheme, any employee who is furloughed must not carry out work for their employer during the period being claimed.

Under the job retention scheme you continue to pay the furloughed worker through your PAYE scheme.  As we understand matters the employee should receive 100% of the pay unless you agree to reduce pay to 80% as this is a variation of contractual terms.  Therefore, to pay an employee at the 80% level you would need to go through a process to agree these revised terms with them.   

You will need to consider this action now as it will be available for a limited period and staff will need to be informed for contractual requirements and law.

Payment of taxes

Income tax

Payments due by 31 July 2020 under self-assessment are now deferred until 31 January 2021. It would appear that this is only for the self-employed and some of you will have extracted dividends upon which tax still may be due. From our experience the Revenue will still have flexibility and we have given advice and have access to specialist advice should the need be to extend any tax payments for several months at least should the Revenue insist on only self-employed.

It is not clear at this stage whether the usual payments due in January 2021 will be due at the same time so for now assume that this is the case. 

For those entitled to defer, no interest or penalties will be charged during the deferral period.  On this basis, it makes sense for most clients to take the deferral option and allow us to complete your 2019/20 tax return before advising you of your tax position for January 2021.

VAT 

For VAT registered businesses, any payments due between 20 March 2020 and 30 June 2020 are deferred until the end of the 2020/2021 tax year which effectively means 31 March 2021 for companies and 5 April 2021 for the self-employed.

Contact Details

During the special measures period, the partners and team at Sandison Easson will largely be working from home. We do have certain members of the team in isolation and unable to work which is a dynamic situation and therefore we suggest that any queries that require an urgent response are directed to the partner or associate that is responsible for your affairs.  Their contact details are:

Finally, we thank you for everything you are doing for us and our families.

In this months' publication of Independent Practitioner, one of our partners, Ian Tongue, explores some of the more common ways consultants work together.

You can read his article here

One of our partners, Aaron Swinton, has been invited to speak at the next Dinner and Conversation Evening held by DGL Practice Manager.

The event will be at the Swan, Shakespeare's Globe in London on Wednesday 20th June 2018 from 6.30pm onwards.

Aaron will discuss ways to minimise the effect that Tapering of the Annual Allowance has upon Consultants' tax affairs.

If you would like to attend this event then please contact Lisa Goodall on 01625 527 351 or send her an email to lisa@sandisoneasson.co.uk

The Scottish Public Pensions Agency has announced it will now accept a scheme pays election from members who become subject to an Annual Allowance tax charge even where the charge or part of the charge relates to pensions growth ('pension input amount') between their reduced tapered Annual Allowance and the Standard Annual Allowance of £40,000.

This applies from the 2016/17 tax year and this will be welcome news for members of the Scottish Public Pensions Agency.

Without this option, if a member had pension growth of say £40,000 but was only entitled to a tapered annual allowance of £10,000 then they may have faced an annual allowance tax charge of up to £13,500 payable by 31 January following the tax year. In the first year this applies, they may also need to make a payment on account towards the following tax year which increases the amount due from £13,500 to £20,250. 

As far as we are aware, the NHS Pension Scheme in England has not introduced the same voluntary option.

 

Today one of our partners Aaron Swinton held a talk as an Invited Guest Speaker at the 2018 Winter Scientific Meeting of the Association of Anaesthetists of Great Britain and Ireland. The feedback from the audience was excellent and the topic covered was in relation to the Tapering of the Annual Allowance.

He was also invited to answer questions on the Q&A Expert Panel which followed the talk.

If you are hosting your own event and would like to invite one of our Expert Medical Accountants to talk at your event then please contact us today.

Stop the taxman visiting

One of our partners, Ian Tongue explores some common areas of risk and the steps that can be taken to minimise the risk of the tax inspector ringing your doorbell

You can read his article here

 

Are you considering buying a new car?

One of our partners, Ian Tongue, has written an article in Independent Practitioner for those considering buying a tax-efficient car.

You can read his article here

From 6 April 2018 the £5,000 dividend allowance will reduce to £2,000.

If you are a shareholder of your own company and have not yet taken advantage of the £5,000 dividend allowance since 6 April 2017 then you may wish to consider whether or not you should make the most of the larger dividend allowance whilst it is still available.