31/03/20 Information on Insurance, Furloughing and MTD during COVID-19
As part of our regular and on-going support, we have some more important and useful information for you in the following areas:
– Business Insurance Policy – action required!
– Furloughing Staff – are you following necessary procedures?
– Making Tax Digital – the HMRC soft-landing finishes Wednesday 1st April 2020
Expanding on these headlines, some of the detail behind them is as follows:
Please carefully check your Business Insurance policy (normally business interruption policies) in case it covers infectious diseases or clauses referring to a “loss due to human infectious or contagious disease outbreak”. We have now heard from a few clients, who have found that on close examination, their policies contain an element of cover. Therefore do not assume that you do not have cover – it can pay to check!
If you have furloughed staff or intend to, due to the COVID-19 outbreak, please ensure you have complied with the necessary procedures: –
A couple of quick points:
1. Check the employment contracts to see if there is a contractual right to lay employees off if there is no suitable work for them to do. Without this clause being in place, there is no automatic right to “furlough” the employee if there is a downturn in work. In the absence of such a clause, you will need to discuss and agree with employees that they are “furloughed”, which may involve a negotiation. Realistically, the choice for an employee taking part in these discussions, is to consider whether to agree to the “furlough” (and therefore preserve their job) or alternatively face a redundancy decision. Either way you will probably need some degree of the employees’ consent.
2. Please notify us that you have furloughed staff – we can then provide specific advice once the HMRC portal is set up on how to make a claim for reimbursement.
Making Tax Digital – Value Added Tax
The soft-landing ends this Wednesday 1st April. if you have not already set up digital methods of recording your VAT information to HMRC please contact the office urgently to get advice.
The first wave of mandated businesses – most VAT registered businesses in the UK with taxable turnover above £85,000 – are due to come out of soft landing effective from their first VAT return period starting on or after April 1st 2020.
The soft-landing period was put in place by HMRC to allow businesses to get their digital links in place. During the soft-landing period, it was still acceptable to copy/cut and paste data for your VAT return as long as the submission itself was made by MTD compatible software. Once the soft-landing period expires in April, businesses will have to maintain digital records and link those records digitally to their VAT return. The shift means the end of copy/cut and paste. The good news for spreadsheet record-keeping businesses is that they can continue to store their sales and purchases data in workbooks and use a bridging software to collate the data into such an MTD compliant return. Our preferred option would be to use a cloud based software such as Xero.
Call us on 01908 583800.