It's been a while since our last update...because not much has changed and your inbox is precious space, let's not fill it up just because 😀
GET READY for the Self-Employed Income Support Scheme (SEISS) - Part 2
Regardless of whether you claimed in Part 1 or not, the portal for Part 2 opens on the 17th August. It'll be similar to before, i.e. you will start an application, answer a few questions and be given a time and date to log in and make you claim. This is to avoid overloading the system.
The criteria remain unchanged from last time - I won't repeat them here, but please call me if you want to run through them again - and the only real change is the grant is now 70% not 80% of your average profits.
Please let me know if you need help with this (especially if you haven't claimed before).
Incorrect or Fraudulent Furlough Claims
It's OK. You're only human (and, goodness, so am I!), but the elephant in the room is:
What do you do if you've claimed more furlough grant that you should have? This could be a result of a miscalculation, or perhaps you claimed in error for staff who were in fact not eligible.
Or (as we're hearing on the grapevine) some firms who aren't passing on all the furlough claim to their employees, and pocketing the difference.
I'm sure nobody reading this falls into that final camp. But, if they do, I'll help them find a new accountant. Because it's theft. And we're not that sort of firm. 🤦♂️
This week we had new guidance from HMRC. Ideally, if you are making another claim between now and the end of October, they ask you to simply reduce your next claim accordingly.
BUT if you're not going to be making any further furlough claims, speak to HMRC on 0800 024 1222 to arrange your repayment.
The deadline for notifying HMRC of an overclaim is the LATER of 90 days after you received any funds you were not entitled to, OR 20th October.
Thankfully HMRC has confirmed they will NOT be seeking to penalise innocent errors in their compliance investigations, which we expect to start early next year, probably in February after the tax return filing deadline. This is a welcome "common sense" approach because, let's not forget, all the furlough money is paid over to staff anyway, so unless the employer has pocketed anything in the middle, they are no better or worse off.
Click this link for the full documentation on penalties for overclaims.
Eat Out to Help Out - VAT calculations 🍔🍕
I hope you've been able to take advantage of the EOTHO scheme this month - certainly from the media reports, it seems to have gone down a storm. Put in your postcode here to find some local places you might not have been to. Mrs Penguin and I are off to sample Nobregas on the Crescent in Taunton for the first time in a couple of weeks, courtesy of EOTHO.
However, a question we're being asked a lot by cafe/pub owners is "what about the VAT implications of the discount?"
In short, VAT is chargeable at the normal rates on the FULL amount of the bill.
In long, remember we now have THREE rates of VAT for catering services: the temporary 5% for most food and soft drinks, 20% for alcohol, and optional service charges/tips which are outside the scope of VAT entirely.
Remember, service charges and alcohol can't receive the EOTHO discount.
VAT on PPE 😷
We don't have any clients who sell PPE, but as we work with many people in medicine, health and the care professions, we have a LOT of people who purchase or use it.
You'll recall the govt removed VAT on a range of medical PPE from 1st May. At the moment, we're still expecting this to revert back to 20% on the 31st of October.
Whilst I don't want you to start stockpiling at the expense of others it might be sensible, now that supplies are recovering, to build up a little extra reserve before the prices jump up 20% in November.
The benefits are twofold. Firstly, of course, it saves you 20% on your PPE bill, which is nice. But more practically, I'm sure a lot of people (who aren't reading this 😜!) won't realise til mid-October that the prices are going up overnight, there will be knee-jerk orders and I'm sure we will see a mini rush as people clean out suppliers before 1st November.