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Accura Accountants – Update

Following on from this morning’s email, as expected approximately an hour ago our Chancellor announced the following assistance to the self-employed:

The payments that could be claimed, will be based on 80% of trading income capped at £25,000 in line with previous assistance to furloughed workers.

This is only claimable for traders declaring £50,000 or less as declared on the tax returns for 2019 (that should have been submitted by 31st January 2020).

The net £20,000 will be taxable and should appear on tax returns in the year of receipt, namely 2021 declared within tax return submission by 31st January 2022 for year 2021.

It will be necessary if receiving this offer to include this in tax returns to 5th April 2021 and also account for tax in July payment on account, however deferred to 31st January 2021.

Unfortunately, as expected there was no allowance for “other income” such as rentals that may have been affected due to Covid 19 and inability of tenants to pay their rent.

Furthermore, the Chancellor did not provide any assistance to the vast number of people who trade via a limited company.

The only reference initially is addressed to the self-employed, who are not working under the guise of a limited company.

It was also stated that no monies would be forthcoming before earliest June 2020 and any person who was suffering from cash flow difficulties could claim under other emergency provisions, as referred to in my earlier updates.

At the moment, I await full details to be published and will email all clients should there be any changes or improvements. I am sure that there will be lobbying to address the enormous numbers of people receiving monies that have been affected by Covid 19, we await the Governments due consideration.

I conclude this email by giving my opinion on how the Government will be able to fund these enormous bail outs with reduction in tax revenues based on a general slowdown and downturn in profits for virtually every business, whether limited company, rentals or trading.

They will be forced to increase tax revenues with higher taxes going forward.

I have emailed the Prime Minister’s office with what I believe is a very pragmatic remedy to fund the costs and avoid increased taxation. I await due response, although to date I have only received acknowledgment to my email proposals. 

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