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Lenders relax evidence requirements for business interruption loan scheme applications

On 27 April 2020 the UK’s seven largest small business lenders announced they had relaxed their evidence requirements for applications to the Coronavirus Business Interruption Loan Scheme (CBILS).

The lenders will use their own information when processing and approving applications, rather than relying on businesses providing forecasts and business plans.

In a joint statement, the seven lenders and trade association UK Finance stated:

‘The reforms to CBILS announced by the British Business Bank and HM Treasury with the support of the regulators provide welcome changes that should enable banks to provide finance to businesses more quickly alongside other forms of support including capital repayment holidays.

‘Lenders are working hard to ensure we provide support swiftly and responsibly and we will continue to work closely with customers to help them identify the finance that is right for their business and financial circumstances.

‘Following the changes to the scheme announced today lenders will only ask businesses for information and data they might reasonably be able to provide at speed and we will not require the provision of forward-looking financial information or business plans from businesses applying for CBILS-backed lending, relying instead on our own information to assess credit and business viability.’ Continue reading...

HMRC delays introduction of off-payroll rules to private sector

HMRC has delayed the introduction of off-payroll rules to the private sector as part of its measures to support businesses through the COVID-19 pandemic.

The reforms will shift the responsibility for assessing employment status to the organisations employing individuals. The rules would have applied to contractors working for medium and large organisations in the private sector, and were due to come into effect on 6 April. Steve Barclay, Chief Secretary to the Treasury, stressed that the introduction of the rules has simply been delayed, rather than cancelled. The rules will now take effect on 6 April 2021.

In a statement, HMRC said:

‘This is part of additional support for businesses and individuals to deal with the economic impacts of COVID-19.

‘This means that the different rules that exist for inside and outside the public sector will continue to apply until 6 April 2021.’

The introduction of the off-payroll rules to the private sector, which are known as IR35 and have applied to the public sector since 2017, was reviewed earlier this year. The changes were due to go ahead alongside the implementation of measures to support affected businesses and individuals.

Commenting on the delay, Andy Chamberlain, Director of Policy at the Association of Independent Professionals and the Self-Employed (IPSE), said: Continue reading...

Job Retention Scheme goes live

On 20 April 2020 the government’s Coronavirus Job Retention Scheme went live for applications.

The scheme allows businesses to furlough their employees, with the government paying 80% of their wages up to a maximum of £2,500.

The Coronavirus Job Retention Scheme is open for four months and was backdated from 1 March 2020 to the end of June. Chancellor Rishi Sunak stated that the scheme would be kept under review and extended if necessary.

There were applications from over 430,000 employers covering over three million employees in the first week of the scheme’s operation.

The Chancellor said:

‘We’ve taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures… it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.

‘It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so.’

Regulators request delay in corporate reporting

Financial regulators have requested a moratorium on corporate financial reports for at least two weeks. The Financial Conduct Authority (FCA) has been communicating with the Financial Reporting Council (FRC) and the Prudential Regulation Authority (PRA) about a package of measures to ‘reinforce trust in the reporting system’.

These will be aimed at ensuring companies and their auditors take the necessary time to prepare appropriate disclosures and address current practical challenges. The FCA says that it is vital that investors can rely on trustworthy information from companies.

However, the FCA added that recent unprecedented events mean that the basis on which companies are reporting and planning is changing rapidly. Consequently, the regulators say companies must give due consideration to the fast-moving coronavirus crisis, and previous timetables may not give them necessary time to do this.

In a statement on 26 March, the FRC said it ‘encourages listed companies and their auditors to consider carefully whether they should delay other corporate reports for the next two weeks, such as interim financial statements and final audited financial statements, except where necessary to meet a legal or regulatory requirement’.

Chancellor unveils help for self-employed workers

On 26 March, Chancellor Rishi Sunak announced a scheme to help self-employed workers who have been hit by the COVID-19 crisis.

Under the scheme, the government will pay self-employed people a taxable grant based on an average of their earnings over the past three years. The grant will cover up to 80% of earnings, up to a limit of £2,500 a month.

To be eligible, self-employed workers must have filed a tax return for the 2018/19 tax year and have average trading profits under £50,000 for the past three years. Directors of their own companies who are paid through Pay as You Earn (PAYE) are able to get support using the Coronavirus Job Retention Scheme.

The self-employed scheme will be available from June this year and will run for three months, but may be extended if necessary. In the meantime, the Chancellor said people can access Universal Credit, business loans or keep on working. HMRC will contact self-employed workers if eligible for the scheme and invite them to apply online.

Chancellor’s business support packages for coronavirus pandemic

On 17 March, Chancellor Rishi Sunak unveiled a £330 billion package of support for the UK economy as it combats the COVID-19 pandemic. The measures dwarf the £12 billion made available in the 2020 Budget. The package includes an increase in government-backed loans, higher cash grants, widened business rates relief for some sectors and mortgage holidays for struggling homeowners. The government has extended the Coronavirus Business Interruption Loan Scheme announced in the Budget from £1.2 million to £5 million, with no interest due for the first 12 months. On 3 April, the Chancellor announced changes to the loan scheme in order to make it easier for small businesses to access loans. The current Business Interruption Loan Scheme has been extended so more small businesses benefit. Lenders will be banned from requesting personal guarantees on loans under £250,000. Additionally, a new scheme has been announced to bolster support for larger firms not currently eligible for loans.

Changes to business rates as a result of the COVID-19 pandemic have been put into place as well as some grants. The latest information for businesses located in England can be found here. Information for businesses in the devolved nations can be found here: Wales, Scotland, Northern Ireland.

Commenting on the measures, Dame Carolyn Fairbairn, Director General of the Confederation of British Industry (CBI), said: Continue reading...

Rise in contactless card payment limit

From 1 April the spending limit for contactless card payments rose from £30 to £45.

The decision to increase the payment limit was reached following consultation between the retail sector and the finance and payments industry, and echoes similar increases in other European countries.

UK Finance stated that the change had been under consideration before the outbreak of COVID-19, but has been brought forward in order to support consumers during the pandemic.

Commenting on the increase, Stephen Jones, CEO of UK Finance, said:

‘The payments industry has been working closely with retailers to be able to increase the contactless payment limit to help customers with their shopping at this critical time for the country.

‘This will give more people the choice to opt for the speed and convenience of purchasing goods using their contactless card, helping to cut queues at the checkout.’

UK Finance said that, given the pace at which the change is being rolled out, the new payment limit will take ‘some time’ to be introduced across all retailers.

Consumers spending more than £45 will be able to make use of many other ways to pay, including Chip and PIN, cash and mobile payments.

6 steps to make self assessment easier on you and your clients

Has the self assessment deadline got you tearing your hair out? AccountancyManager can make it easier on both you and your clients, in six simple steps:

1. Ready-made self assessment checklists

Use the template self assessment form provided, make your own tweaks or build custom forms from scratch to collect the client data you need. Share your documents with clients through our secure, GDPR-compliant portal.

2. Automatically chase clients to complete forms

AccountancyManager will remind your client to complete their forms at regular intervals – as set by you. The forms are built in, so the system will know whether they’ve been completed or not and notify you and remind clients accordingly. 

3. Easy, fast client approval 

It couldn’t be easier for your clients to approve their self assessment. They simply log into their portal and e-sign the docs. You can track approvals and completed forms in your client timeline.

4. Plan your time around returned forms, records and approvals

You don’t need to keep track of which clients have responded; AccountancyManager will alert you. Confirm that you’ve received the required records, then filter your task list to easily see what submissions you can now complete.

5. Automatic tax payment reminders

Make sure your clients pay their tax on time by setting up automatic email and text reminders. They’ll appreciate the nudge and you don’t need to lift a finger.  Continue reading...

Combatting Money Laundering – Part 2

Dishing the Dirt

By: Alex Byrne – 22 January 2019

KEY POINTS

  • Tax practitioners should take care to ensure that clients are not tipped off about money laundering reports.
  • Understanding when a suspicious activity report should be made.
  • The difference between internal and external reports.
  • There are limited exemptions from making reports.
  • Advisers should take care not to risk their businesses by falling foul of the anti-money laundering legislation.

In the first part of this article (‘A dirty business’, Taxation, 29 November 2018), we considered the basic principles of the anti-money laundering (AML) regulations and recognising the circumstances that might indicate suspicious activity. In this issue we will consider ‘tipping off’, reports and exemptions.

Accountancy and tax practice staff must be properly trained on tipping off, which is covered in paragraph 6.1.20 of the CCAB’s Anti-Money Laundering Guidance for the Accountancy Sector. Similar paragraph references in this article refer to this guidance.

The offence of tipping off is committed when a relevant employee in the regulated sector discloses that a suspicious activity report (SAR) has been made and this disclosure is likely to prejudice any subsequent, current or contemplated investigation into allegations of money laundering or terrorist financing (MLTF).

There are some exceptions at paragraph 6.1.23 of the CCAB guidance.

  • A person does not commit an offence, for example, if they make a disclosure to a fellow employee of the same undertaking.
  • Nor is an offence committed if:
  • a relevant professional adviser makes a disclosure to another within the same profession (for example, accountancy) but from a different firm, who is of the same professional standing, when that disclosure relates to a single client or former client of both advisers and is made only to prevent a money laundering offence; and
  • is made to a person in an EU member state or a state imposing equivalent anti-money laundering requirements.
  • No disclosure offence is committed if an adviser attempts to dissuade their client from conduct amounting to an offence. And no offence is committed when enquiries are made of a client regarding something that properly falls within the normal scope of the engagement or relationship. This might be to understand a specific transaction or even, for example, to ask about an invoice that does not appear to have been included on a client’s tax return.
  • Individuals concerned about tipping off may wish to consult their money laundering reporting officer (MLRO). It is important that documents containing references to the subject matter of any AML report are not released to third parties without first consulting the officer.

The AML guidance advises that MLROs may seek advice from a suitably skilled and knowledgeable professional legal adviser or from the helplines and support services provided by the professional bodies (paragraph 6.1.29). A discussion with the National Crime Agency (NCA) and law enforcement may also be valuable, but the guidance warns that they cannot provide advice and are not entitled to dictate the conduct of a professional relationship. Continue reading...

Combatting Money Laundering – Part 1

By: Alex Byrne – 27 November 2018

Alex Byrne sets out the ways practitioners can protect themselves from the charge of money laundering and looks at published guidance.

KEY POINTS

  • Why is money laundering so important to accountants?
  • The application of the rules and examples of money laundering activities.
  • Avoiding committing a money laundering offence
  • The ‘Flag it up’ campaign and signs of money laundering.
  • Risk assessment, potential tax fraud and deciding whether to report.

A dirty business

As the government relaunches its ‘Flag it up’ campaign against money laundering activity, Alex Byrne considers the important role played by accountants and tax advisers in combating the practice.

The Consultative Committee of Accountancy Bodies (CCAB) is the umbrella group of various chartered accountancy bodies: the ICAEW, ACCA, CIPFA, ICAS and Chartered Accountants Ireland. In March 2018, it published a new document, Anti-Money Laundering Guidance for the Accountancy Sector. My initial reaction was surely we did not really need a 73-page document that is not legislation and does not spell out the things to look for. Most accountants seek practical guidance on anti-money laundering, especially something they can pass on to staff to strike a balance between, at one extreme, failing to carry out the requisite procedures and, at the other, swamping the firm’s money laundering reporting officer (MLRO). However, on rereading, the guidance improves with familiarity.

Familiarity, not contempt

The anti-money laundering (AML) guidance has legal status, so accountants remaining unfamiliar with it or not applying its provisions do so at their peril. The regulations apply, with some exceptions, ‘to the persons (“relevant persons”) acting in the course of business carried on by them in the UK’. This includes (reg 8(2)(c)) auditors, insolvency practitioners, external accountants and tax advisers and (reg 8(2)(e)) trust or company service providers and company services in the UK, other than under a contract of employment. Continue reading...

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