Events company collapse

A recent investigation by the Insolvency Service has seen a husband and wife disqualified from being directors for a total of 17 years. The husband and wife team were directors of a company that provided conference and event organisation services across the UK.

The male director had resigned as a director of the company in November 2014 after he was disqualified for 6 years. However, investigators discovered that the banned director had continued running the company behind the scenes in breach of his disqualification and his wife was fully aware of the misconduct. The company was eventually wound up in October 2018.

The disqualification means that the directors cannot be involved, directly or indirectly, in the formation, promotion or management of a company without permission of the court for 11 and 6 years, respectively.

Commenting on the case the Chief Investigator for the Insolvency Service said:

'The length of this ban for the director and the disqualification of his wife, demonstrates that we will tackle those who try to get around their bans by appointing their spouse as director, while continuing to run the business themselves behind the scenes.’

JSS fraudulent claims

The Job Support Scheme (JSS) has replaced the Coronavirus Job Retention Scheme (CJRS) which came to an end on 31 October 2020.There are significant concerns that between 5%-10% of claims made under the CJRS were fraudulent or made in error.

There are additional anti-fraud measures in place to help prevent fraudulent claims made under either the JSS Open or JSS Closed. In order to help make the new JSS more secure, checks will be put in place and payments claimed may be withheld if HMRC suspects a claim to be ineligible. Whilst this may help reduce fraudulent claims it leaves the employer having to fund the government grant which will be paid in arrears.

Other measures announced by HMRC to combat fraud under the JSS include:

  • The amount of any overpayment by the employer must be paid back to HMRC where a claim contains incorrect information.
  • The full amount of any grant must be repaid if a claim is found to be fraudulent. Penalties of up to 100% of the amount overclaimed may be applied where appropriate.
  • HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect Job Support Scheme grant claim.
  • HMRC intends to publish the names of employers who have used the scheme.
  • The public can report fraud to HMRC if they have evidence to suggest an employer is abusing the scheme.
  • Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account.

JSS – financial impact test for large employers

The Job Support Scheme (JSS) Open is available from 1 November 2020 for businesses that remain open but with employees working reduced hours. Employees must work at least 20% of their usual hours, paid as normal, in order to qualify for the JSS Open. The employee will then receive 66.67% of their normal pay for hours not worked. Employees will therefore forego one-third of their pay for the hours that they have not been working.

The contribution for hours not worked will be made up of contributions from the employer and government. The government will fund up to 61.67% of wages for hours not worked per employee whilst the employer will fund a further 5%.

The JSS Open is available to all small and medium-sized businesses, but larger businesses have to meet a financial impact test to demonstrate that their turnover has fallen as a result of the pandemic.

A large employer is defined for this purpose as a legal entity with 250 or more employees across their payrolls on 23 September 2020. If the employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employer's first claim for the Job Support Scheme.

Large employers who are VAT registered and submit quarterly VAT returns should compare the total sales figure on their VAT return, which is due to be filed and paid between 31 August 2020 and 7 November 2020, with the total sales figure from the same quarter in 2019. There are similar measures for employers who submit VAT returns on different staggers. Further guidance is expected to be published shortly for large employers who are not VAT registered.

Any charity with 250 or more employees that is registered with a UK charity regulator or are exempt from such registration is not required to carry out the test and will be considered eligible for the scheme.

Carry back charitable donations

If you pay Income Tax at the basic rate no additional relief is due on your charitable donations. However, if you are a higher rate or additional rate taxpayer then you can claim tax relief on the difference between the basic rate and your highest rate of tax. This relief is given by increasing your basic rate and higher rate band by the grossed-up amount of your gifts.

If you are a higher rate or additional rate taxpayer you have the option to carry back your charitable donations to the previous tax year. A request to carry back the donation must be made before or at the same time as your previous year’s self-assessment return is completed.

This means that if you made a gift to charity in the current 2020-21 tax year that ends on 5 April 2021, you can accelerate repayment of any tax associated with your charitable giving. This can be a useful strategy to maximise tax relief if you will not pay higher rate tax in the current tax year but did in the previous tax year.

You can only claim if your donations qualify for gift aid. This means that your donations from both tax years together must not be more than 4 times what you paid in tax in the previous year. If you do not complete a tax return you can submit a claim using HMRC’s P810 form.

Venues required to enforce rule of six

Since 18 September 2020, many designated venues in England have been required to enforce the rule of 6. The 'rule of 6' bans any social gathering of more than 6 people, except under limited circumstances such as if a single household or support bubble includes more than 6 people.

Services included within the legal requirements to enforce the rule of 6 include:

  • hospitality, including pubs, bars, restaurants and cafés
  • tourism and leisure, including gyms, swimming pools, hotels, museums, cinemas, zoos and theme parks 
  • close contact services, including hairdressers
  • facilities provided by local authorities, including town halls and civic centres (for events) and libraries

Children’s centres run by local authorities were included on the original list but were removed on 21 October 2020.

These reporting requirements mean that affected businesses and organisations are legally required to log details of customers, visitors and staff for NHS Test and Trace. Failure to enforce the rules could see businesses face fines of up to £4,000.

Businesses are also required to display the official NHS QR code posters to make it easier for people to check-in at different premises once the app is rolled out nationally. If individuals choose to check-in using the QR code poster they do not need to log in via any other route.

The rule of 6 applies in outdoor and indoor settings in England. There are further restrictions for Tier 2 (High Alert) and Tier 3 (Very High Alert) areas.

Job Support Scheme for closed businesses

The CJRS or furlough scheme ended on 31 October 2020 and has been replaced by the Job Support Scheme (JSS). This JSS has been designed to help businesses and employees deal with a fresh spike of the virus and a winter of uncertainty.

The JSS is now split into two parts, the JSS Open for businesses which remain open and the JSS Closed for businesses that are forced to close because of local or national lockdown measures. The two parts of the scheme will run in parallel for 6 months until 30 April 2021.

The provisions of the JSS Closed are more generous and reflect the fact that the employee is unable to work. This would mean they are under Tier 3 restrictions in England or similar lockdown regulations in Scotland, Wales or Northern Ireland.

Under the specific terms of the JSS Closed, the government will pay two-thirds (67%) of employees’ salaries, up to a maximum of £2,083.33 a month. Employees must be off work for at least 7 consecutive days to benefit from the expanded scheme. Businesses will only be able to use the JSS Closed whilst they are subject to specific lockdown measures that require the closure of their business premises.

Employers will have the discretion to top-up the payments if they so wish. This will help protect employee incomes, limit unemployment, and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.

In line with the JSS Open, the grant will be paid in arrears, reimbursing the employer for the government’s contribution. An employer can claim the JSS Open and JSS Closed at the same time for different employees, for example a retailer with some premises that remain open and some that are forced to close.

Affected employees under the JSS Closed may also be entitled to additional financial support, including Universal Credit.

Temporary extension to the Help to Buy scheme

The Help to Buy equity loans scheme is open to both first-time buyers and home movers on new-build homes in England with a purchase price up to £600,000. The Help to Buy equity loans provide a low-interest loan towards the deposit. The loan is interest free for the first 5 years. New home buyers need a 5% deposit, and the government lends up to 20% of the value of the home (up to 40% for London).

The deadline for the homes to have been finished in order to comply with the equity loan scheme has been extended from 31 December 2020 to 28 February 2021 to ensure home buyers do not miss out if there has been a delay in construction due to the pandemic. The deadline for the legal completion of the sale will remain the same – 31 March 2021. The completion of sale deadline may be extended further to 31 May 2021 if a reservation was in place by 30 June 2020. These changes apply to the equity loans scheme in England and not to similar schemes in Northern Ireland, Scotland or Wales.

The government’s new Help to Buy scheme, which will replace the current scheme, will come into place from 1 April 2021 and run for two years until March 2023. There are no plans for further extensions. The new scheme introduces regional property price caps and will only be available to first time buyers.

Handling food? Wash, those hands

If you are considering any change to your business activities that will involve handling any packaged food or raw ingredients, as you would expect, there are a raft of regulations that you will need to consider and adopt.

The Department of the Environment has published considerable guidance on the GOV.UK website. Simply Google “Guidance for food businesses on coronavirus”. A brief extract from their guidance follows. 

Although it is very unlikely that COVID-19 is transmitted through food or food packaging, as a matter of good hygiene practice your staff should wash their hands frequently with soap and water for at least 20 seconds. This should be done routinely, including:

  • before and after handling food 
  • before handling clean cutlery, dishes, glasses, or other items to be used by the customer
  • after handling dirty or used items, such as collecting used dishes from customer tables 
  • after handling money 
  • after touching high-contact surfaces, such as door handles
  • when moving between different areas of the workplace
  • after being in a public place
  • after blowing your nose, coughing or sneezing. Coughs and sneezes should be caught in a tissue or the crook of your elbow

Food packaging should be handled in line with usual food safety practices and staff should continue to follow existing risk assessments and safe systems of working.

Readers who need more information should research the following:

  • Food Standard Agency’s (FSA) guidance on personal hygiene and hygienic practices in food preparation, 
  • Hazard Analysis and Critical Control Point (HACCP) processes and 
  • Guidance on risk assessment from the Health and Safety Executive (HSE).

Unravelling the jargon: what is a support bubble?

The following notes are copied from the GOV.UK website. At first glance, it would appear that the definition of a support bubble should be fairly easy to grasp. Don’t hold your breath.

Basically, a support bubble is a close support network between a household with only one adult in the home (known as a single-adult household) and one other household of any size.

Once you are in a support bubble, you can think of yourself as being in a single household with people from the other household. It means you can have close contact with that household as if they were members of your own household. Once you make a support bubble, you should not change who is in your bubble.

Continue to follow social distancing guidance with people outside of your household or support bubble. This is critical to keeping you, your family and friends as safe as possible.

You can form a support bubble with another household of any size that is not part of a support bubble with anyone else if you:

  • live by yourself – even if carers visit you to provide support
  • are a single parent living with children who were under 18 on 12 June 2020

You can form a support bubble with one single-adult household who are not part of a support bubble with anyone else.

The government recommends that you form a support bubble with a household that lives locally wherever possible. This will help to prevent the virus spreading from an area where there might be a higher rate of infection.

From 14 September, if you form or continue in a support bubble, you cannot then change your support bubble. It does not have to be the same support bubble you may have been in previously.

If anyone in your support bubble develops symptoms or tests positive for coronavirus, follow the stay at home guidance.

If you share custody of your child, and you and your child’s other parent are in separate bubbles, members of both bubbles should stay at home if someone develops symptoms. This is critical to controlling the virus, as it will help to stop it spreading across multiple households.

Tax Diary November/December 2020

1 November 2020 – Due date for Corporation Tax due for the year ended 31 January 2020.

19 November 2020 – PAYE and NIC deductions due for month ended 5 November 2020. (If you pay your tax electronically the due date is 22 November 2020.)

19 November 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2020. 

19 November 2020 – CIS tax deducted for the month ended 5 November 2020 is payable by today.

1 December 2020 – Due date for Corporation Tax payable for the year ended 28 February 2020.

19 December 2020 – PAYE and NIC deductions due for month ended 5 December 2020. (If you pay your tax electronically the due date is 22 December 2020)

19 December 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2020. 

19 December 2020 – CIS tax deducted for the month ended 5 December 2020 is payable by today.

30 December 2020 – Deadline for filing 2019-20 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2021-22.