Firstly, as we’ve written previously, the furlough scheme introduced under the Coronavirus Job Retention Scheme (CJRS) will begin to be phased out from July 1st.
This means that businesses' contributions to their furloughed staff’s wages will increase from 5% to 14% to include a greater share of the national insurance and pension costs.
Businesses that successfully obtained a VAT deferral on payments from 2020 will now have to begin repaying them, while many companies that took out borrowing under the bounce back loan scheme or CBILS will see their repayments come due for the first time if they arrange to defer them six months.
It’s worse news for businesses in the retail, leisure and hospitality sectors too as they lose their business rates exemptions, even while some of them remain closed and unable to trade until July 19th at the very earliest.
Wrongful trading, or trading while insolvent, should be a concern for directors because as well as disqualification, they could also be held personally liable for any debts the business incurs during this period.
The leeway this suspension granted directors has now disappeared and if a business can’t pay its debts when they come due or if their liabilities exceed total assets then they run the risk of wrongful trading and the potential penalties it carries.
Another temporary measure being allowed to lapse involves termination clauses.
This has stopped suppliers from ceasing their supply or asking for any additional payments or security from a business that is undergoing a restructuring or administration process.
All of this might indicate a looming crisis for some companies but Chris Horner, insolvency director with Business Rescue Expert, thinks it can be the perfect window of opportunity, if they move quickly enough to take advantage.
He said: “Directors and business owners have approximately 12 weeks until September 30th when they can take a positive decision to secure the best chance of future prosperity of their companies.
“They will have to move quickly before winding up petitions and other threats such as HMRC enforcement actions and visits from bailiffs become a possibility but they will have a range of options available to them depending on the individual circumstances they’re facing.
“Whether they ultimately decide to close the business through a liquidation process or if an administration or a CVA are more appropriate, all are able to accommodate businesses with PAYE or other tax arrears, bounce back loan or CBILS debt and other unmanageable corporate debt.
“This also applies to businesses that could be at threat from termination clauses being invoked. Construction companies for example that rely on the guaranteed availability of materials could quickly find themselves in difficulties if suppliers start to use their newly restored rights.
“Otherwise profitable businesses could find themselves trading while insolvent through no fault of their own but due to the actions of a supplier. If this happened within this 12 week window of opportunity, they would be able to use the circumstances to their advantage to come up with the best recovery strategy.”
If there’s one lesson the past 18 months have taught us, it’s that things can change very quickly.
As the coronavirus support measures begin to be withdrawn, it provides possibly the last opportunity for business owners and directors to get active in their own rescue and make decisions before they’re forced to, under less favourable circumstances.
We’ll arrange a free, initial consultation where, once we get a better understanding of your situation, we can outline your options and begin working with you on a plan to implement them quickly, efficiently and effectively.
Then you might be able to finally enjoy the summer.
Specifically because the repayments from this and other Covid-19 support measures are coming due this year - if they haven’t already - and there is some confusion for businesses looking to close down about how seriously or not this outstanding debt is being treated.
A recent example of the confusion is a letter that the Business Secretary Kwasi Kwarteng sent in a letter to business leaders this week.
In the letter, he said that HMRC would take a “cautious approach” with companies that were trying to reopen post lockdown and pay down their debt appropriately.
Specifically replying to concerns raised by R3, the insolvency trade body and the Institute of Directors that urged HMRC to help businesses in danger of becoming insolvent due to a combination of issues including:
Kwarteng wrote that HMRC would “adopt a cautious approach to enforcement of debt owed to government that will have accrued” and said that HMRC would soon update its enforcement methods so that any outstanding debt could be brought into managed arrangements for businesses affected by the pandemic and subsequent lockdowns.
He said that using insolvency to enforce payment would remain a last resort and that he recognised that “the path back to full trading will be difficult for many companies, particularly those with accrued debt and low cash reserves.”
This is in contrast to news published by The Insolvency Service in the same week highlighting their success in petitioning courts to wind up five limited companies since this year that had been involved in fraudulent activity involving bounce back loans and CBILS borrowing.
Dave Elliott, Chief Investigator at the Insolvency Service said: “The bounce back loan scheme was made available to help support businesses during the pandemic.
“It’s outrageous that some directors have been trying to abuse this support, and the action we have taken shows we take this issue extremely seriously.”
The new Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, currently before Parliament, will give the Insolvency Service additional powers to investigate and disqualify directors of companies which fraudulently claimed bounce back loans but were then subsequently dissolved.
The investigative power will be retrospective to look at conduct that took place before the law came into place and if wrongdoing or malpractice is found, the sanctions can include a ban of up to 15 years or even criminal prosecution for serious offences uncovered.
Chris Horner, Insolvency Director with Business Rescue Expert, thinks that while it’s useful for HMRC and the Insolvency Service to remind directors and business owners about their responsibilities, the mixed messaging might cause unnecessary confusion.
He said: “From the conversations we’ve been having within the industry and examples we’ve seen it’s apparent that the Insolvency Service are directly targeting abuse of the bounce back loan scheme, CBILS and furlough fraud as their highest priority this summer.
“They will specifically be looking at businesses with bounce back loans who have tried to use the route of dissolution or striking off to close their business down instead of using a more appropriate liquidation procedure.
“In these circumstances it wouldn’t be surprising to see them seeking compensation orders to make directors personally liable for these debts if they have closed their business incorrectly in the eyes of the Insolvency Service.
“Recovery action on defaulted payments will be pursued for at least 12 months as standard and even though lenders will be repaid under government guarantee for bounce back loans for example, they are still required to continue any recovery action.
“They will probably avoid initiating insolvency proceedings just for bounce back loan debt by itself but will continue with debt collection measures including using debt collectors or bailiffs.
“We can also clarify that any personal guarantees given against bounce back loan debt specifically are unenforceable and these debts cannot be sold on to other collectors. They will remain the responsibility of the original lender to collect.
“Another thing bounce back loan borrowers need to remember is that even if they have obtained a payment holiday from their first repayments, interest continues to accrue during the payment holiday.
“If a business with bounce back loan borrowing is contemplating liquidation, which it can do, it will be treated like any other creditor and should not be paid over and above agreed repayment terms.
“This also includes if the funds are being held as cash in their bank account. They should not use this to repay the lender ahead of other creditors as in the event of insolvency it would be treated as a preferential payment.”
If your business has taken out a bounce back loan or CBILS borrowing in the past 18 months and you’re worried about repayments or if you think your best option is to close your company but don’t know how to deal with these specific debts then get in touch with us today.
We offer a free initial consultation for business owners and directors to discuss their situation and we’ll work with them to come up with the most efficient and effective plan to reach their goals.
As it continues to be a challenging environment for companies and will remain so for the rest of the year and possibly beyond, so taking the time to fix any financial difficulties facing your business right now could be the best time investment you make in 2021.
The first story was the return of Crown Preference.
From December 1st, the HMRC has been reclassified as a preferential creditor which means that it will be repaid certain outstanding taxes such as Employees’ PAYE, National Insurance Contributions (NICs) and VAT ahead of floating charge holders and suppliers if a business becomes insolvent.
Previously abolished in 2003, the government announced that it was going to reinstate Crown Preference in the 2018 budget although the economy and business landscape of 2020 is vastly different..
While it’s too soon to observe any immediate changes or consequences of the decision, it’s a fair assessment that there’s going to be some.
For instance, if lenders now find themselves behind the HMRC in the queue for repayment then they could be less likely to lend large amounts in the first place. Or they could raise their interest rates to reflect the additional risk that lending will now carry.
R3, the representative body of the insolvency industry, has been strong in its resistance to the reintroduction of Crown Preference since its announcement.
They have written about how they foresee that there could also be a reduction in the number of successful Company Voluntary Arrangements (CVAs) as another unintended consequence.
Their argument is that as HMRC will now rank as a preferential creditor, their approval will be required in order for CVA proposals to pass.
R3 think they’re unlikely to grant this approval unless the CVA includes a proposal to pay all qualifying tax debts in full. If this happens then the funds available for all other unsecured creditors will be reduced - meaning that it will be harder to secure their approval for proposals where they will receive less.
Equally logically, they assume that with less cash at hand the prospects of the CVA will also be lower as the company will have less money to invest in the business or to have in reserve for any unexpected or emergency situations.
CVAs provide an important route to business recovery and rescue and generally provide a better outcome for creditors than any of the alternatives including administration or liquidation.
If their use or success comes under threat then this will have repercussions throughout the insolvency industry in 2021.
The other news illustrates how seriously HMRC are taking their debt recovery mandate.
As well as using their own staff and recovery operations they can use private debt collection agencies (DCAs) to recover outstanding payment from debtors.
The amount they invest in this operation is not insignificant.
Figures were released this week that showed that over the past three tax years, HMRC spent over £84 million on DCAs with nearly £4.5 million spent on final opportunity letters alone.
The financial secretary to the Treasury, Jesse Norman MP, revealed the figures and said: “As part of their overall collections strategy, DCAs provide HMRC with additional capacity.
“The department keeps under review the cost effectiveness and value for money that using DCAs provides to the exchequer and UK citizens. There are no current plans to move away from using agencies to send final opportunity letters.”
HMRC added: “Over the last few years DVAs have contributed directly to HMRC’s improving performance towards reducing the tax gap - the difference between what tax is owed and how much of it is paid.”
You know that phrase “we’re no experts but…” when somebody wants to make a statement with certainty?
Well, we are experts and we know for sure when HMRC are preparing for a big effort to reclaim any unpaid taxes if not beginning now then definitely in the New Year.
The economic impact of Covid-19 and the various support measures rolled out by the government has had a seismic effect on the Treasurys spending plans as much of it is based on probable income from taxes.
HMRC will be tasked to recover as much as they can before the end of the tax year in March 2021 so the next few months will be critical for them to achieve this task.
If you are behind on VAT, PAYE, NICs or any other tax accounts and won’t be able to settle them in full when asked by a DCA then you need to get in touch with us.
We’ve got a strong track record of helping businesses find solutions to their HMRC problems - either helping them to fully pay off their outstanding debts or reaching agreements for more affordable payments made over a longer period.
Everyone is hoping that 2021 will be a lot better than 2020 but a payment demand could shatter this dream before the Christmas decorations have come down.
Act now and you’ll be able to really look forward to surprise knocks on the door over the holidays.
Not just in terms of businesses they’ve helped support but also how the Treasury and HMRC intend to recoup some of the billions spent underpinning the economy over the spring and summer months.
One way will be to pursue directors that could now be personally held liable for the taxes of their companies owed in cases of tax evasion, tax avoidance or repeated insolvency and non-payment.
The Finance Act 2020 came into effect on July 22nd 2020 and introduced provisions giving HMRC authority to issue a Joint Liability Notice (JLN) to those directors if certain conditions are fulfilled.
A JLN could be issued for repeated insolvency and non-payment of tax if all of the following conditions are met:
The individual has been a director of at least two companies (known as the Old Companies) within a five year period AND:
The JLN would make the director jointly liable with the Old Companies for any tax liability at the date the JLN is issued and also with the New Company for any tax liability it owes at the date of the JLN and any tax liability arising within five years of the JLN being issued.
A repeated insolvency JLN has to be issued within two years of HMRC becoming aware of the facts that make it sufficient for them to issue the JLN.
Anybody issued with one has an automatic right of review by HMRC or a right of appeal to the First-Tier Tax Tribunal although both have deadlines for initiating them.
Chris Horner, Insolvency Director with Business Rescue Expert thinks the repeated insolvency JLN has been set up for a specific purpose.
“Given the combination of conditions attached to issuing a JLN, it would be a rare occurrence for any director to receive one.
“It’s primarily aimed at directors of phoenix companies who continued to trade without paying their tax liabilities and also covers businesses that prioritised creditors such as their suppliers leaving HMRC as the largest unsecured creditor in repeated insolvencies.
“To issue a JLN against an individual they have to have been a director of two failed companies within the five year period where HMRC has been the biggest creditor and be a director of a third company that needn’t be in insolvency but is in the same business or trade as the others.
“The risk of directors being pursued for their companies unpaid tax is quite small and specific and if any director was unfortunate enough to have been involved with two business failures within five years they should definitely seek advice on any potential exposure before launching another venture.”
Directors might have the hardest jobs in any business. Yes there are rewards they can enjoy that others can’t but all the pressure to keep the company alive is on them.
Not only that but if the company becomes insolvent then depending on their actions leading up to insolvency they could also be exposed to claims of misfeasance, wrongful or fraudulent trading, termination of employment and even disqualification from being a director.
Directors are also excellent at seeking out the best specialist advice and support whenever they need it.
We’re available for a free initial consultation anytime you want to talk about your ideas for your business and to go over possible solutions to any issues facing your company.
Our expert team of advisors have decades of experience between them and will likely have dealt professionally with any difficulty or problem you face.
Then you can get back to making your company as successful and profitable as it can be.
Now this doesn’t refer to the order in which Her Majesty likes cream and jam put on her scones (that’s the correct order btw), but relates to the order in which creditors are paid in insolvencies, specifically where HMRC come in the list.
With the new Finance bill passing, there was a small but important change made to creditor preference which restores HMRC’s standing to be classed as a preferential creditor from 1st December 2020.
This means that after this date any outstanding tax or NIC debt will be paid before floating charge providers such as banks, lenders or suppliers can get any money from the administrators.
The new legislation has moved HMRC up the queue which will have ramifications for companies considering or going into insolvency.
R3, the trade body for the insolvency and business restructuring industry have always been firmly against the move.
Duncan Swift, R3’s past president said: “HMRC’s increased payment from insolvencies has to come from somewhere - and it will come from what’s owed to an insolvent business’s other creditors.
“Now these creditors will only receive a return once HMRC has been paid in full, it will be much harder to secure their support for rescue plans.
“It’s ironic that this measure, which is being brought in to try and boost the tax take, is likely to reduce the amount of tax collected, as potentially viable companies are not able to be rescued and are forced to close, while growing businesses are less able to tap into the funding they need to invest and expand.”
The last time HMRC enjoyed this status was in 2002 but it was downgraded as part of the Enterprise Act of the same year.
Chris Horner, Insolvency Director with Business Rescue Expert which has helped many companies manage their HMRC arrears also thinks there will be unintended consequences arising from the move.
“One thing that could immediately affect all businesses, not just those in insolvency or that owe money already to HMRC, could be the access to finance.
“Floating charge finance - that’s funds borrowed against assets like stock or work-in-progress - will now come below HMRC from December.
“That means that this useful and easily accessible type of finance will probably become more expensive and harder to obtain as lenders look to protect themselves from expensive liabilities.
“For some businesses, this might be the difference between survival and liquidation.”
More companies owe money to HMRC than any other creditor in the UK and the change in legislation will see them becoming more confident and aggressive in looking to reclaim outstanding debts with the additional leverage being given to them.
If you are behind on any payments then you should get in touch with us today.
There are several proven strategies and approaches we can help with and use in order to come to a payment arrangement with HMRC. Each can allow a business to continue trading while catching up with their debts but only if they’re executed quickly and properly by professional insolvency practitioners like us.
If the coronavirus pandemic of 2020 hasn’t been enough of a big dipper for businesses, the return of HMRC preference will guarantee an unpleasant end-of-year surprise for several companies - don’t allow yourself to be one of them.
He said that Britain was entering the second phase of the government’s economic response but the job of responding to the Covid-19 crisis had only just begun.
VAT is being reduced from 20% to 5% for the hospitality and tourism sectors for six months so businesses offering food and accommodation as well as attractions he hopes are already more attractive to customers.
To further encourage eating out an inventive new scheme was also announced offering a 50% discount per person up to a maximum of £10 to a meal if enjoyed at an establishment from Monday to Wednesday from August 1st 2020.
He also confirmed that the Coronavirus Job Retention Scheme (CJRS) would definitely be closing on October 31st but sought to alleviate any potential job losses by offering a £1,000 bonus to companies for every staff member they brought back into regular employment.
He hailed the scheme as a success noting that 1.1 million companies had made use of it and 9.4 million positions had been furloughed as a result which could otherwise have been lost outright.
He said: “Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before.”
There was some action on creating new jobs by promising to double the number of Jobcentre work coaches and the announcement of the Kickstart job creation scheme which would see 350,000 fully-funded six-month job placements for 18 to 24 year olds.
This is part of his announced three point strategy to support, protect and retain jobs.
Additionally, apprenticeship would be supported with bonuses for companies. Firms would receive a £2,000 payment for every apprentice they took on (£1,500 for apprentices aged over 25).
As usual with any attractive financial offer, it pays to read the small print as there are one or two speed bumps along the road to recovery.
It emerged that a brief 15-day consultation on draft legislation to introduce rules on the taxation of coronavirus business support grants closed in June and is being carried forward.
What this means is that it grants HMRC powers to tax the Retail and Hospitality Grant Scheme, the Small Business Grant Scheme and the Coronavirus Job Retention Scheme along with the Coronavirus self-employment Income Support Scheme (CSISS).
It would also empower HMRC to recover payments from recipients of CSISS or CJRS if it deems them ineligible to have received them or if CJRS payments hadn’t been used to pay employees, make pension contributions, pay PAYE or NICs. This will be extremely easy to check on their side. If you have claimed the furlough grant, but then not made the scheduled PAYE/NIC payment on time, they may look to open an investigation.
They also threaten further penalties for deliberate non-compliance and state that further provisions may be included in the final legislation when tabled.
The first examples of this were announced yesterday with the first arrests made in alleged Furlough fraud investigations in the West Midlands.
Richard Las, acting director of the HMRC’s Fraud Investigation Service said: “The Coronavirus Job Retention Scheme is part of the collective national effort to protect jobs. The vast majority of employers will have used the CJRS responsibly, but we will not hesitate to act on reports of abuse of the scheme.
“This is taxpayer’s money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.
“As usual, we have built steps in to prevent mistakes and fraud happening in the first place, but anyone who is concerned that their employer might be abusing the scheme should report it to HMRC online.”
If the last few months have been rough then the rest of 2020 and into 2021 look just as stormy even with temporary support measures.
There is always an opportunity within a crisis and this might be the chance to reconfigure your business’s financial situation to withstand an even bigger storm than the one that’s currently blowing down every high street and shopping centre in the UK.
Get in touch with us today and one of our experienced team of expert advisors will arrange a FREE, convenient initial consultation whenever you want one.
They will quickly get appraised of your situation, your circumstances and the issues you’re facing and can work with you on the best way to deal with them.
We don’t know what the future holds or what’s going to happen economically but we do know that the earlier you look for advice, the more options and maneuverability you’ll have.
They might want to pursue other ambitions or they might have accepted a job with somebody else and need to close their business to allow it. Some might want to make use of the tax advantages that come from liquidating their company and taking the profits as a capital payment rather than a dividend.
Whatever the reason - it’s a simple enough process and just requires appointing a licensed firm like ours, and completing the requisite forms. But life happens and sometimes people need to start working again to bring in some extra money or because they might want to take on a short-term challenge or project.
This is where they might have a sticky tax problem called TAAR.
TAAR or the Targeted Anti-Avoidance Rule was introduced in The Finance Act 2016 as a means to combat tax avoidance and phoenixing.
We’ve written about the practice of phoenixing before - it’s where a company allows itself to be run down deliberately so it can relaunch with a slightly different name and no debts or it could be a vehicle to allow previously banned and disqualified directors to illegally run their companies again.
So what does this have to do with someone who’s closed their company with an MVL and just wants to work again?
A lot - if HMRC suspect that somebody has liquidated their company specifically for tax purposes and then reformed relatively quickly or straight away then they will be taking a close interest in what they think would be an attempt to skirt the system.
TAAR is a self-assessed process with no clearance procedure involved. The onus is on the taxpayer to reach a conclusion around their submittance about whether it applies to any distribution of funds relating to their company being wound up.
In order to determine whether a transaction would come under the jurisdiction of TAAR, HMRC look at four conditions:
If all of these conditions are met, then there’s a decent chance that HMRC would investigate. The third condition will often be the largest focus of any investigation for contracts closing their company due to the IR35 changes.
Umbrella may provide shelter (unless there is a hole)
Those looking at post IR35 changes generally have two options, go onto the payroll or join an umbrella company. An umbrella company effectively acts as an employer for contractors who are working on fixed/short-term contracts.
They collect earnings from the client company, deduct the necessary tax, NICs and their fee before paying the remaining amount to the contractor. It’s similar to being a full-time employee but without the accounting and tax responsibilities.
Some contractors may be eligible to claim some associated business costs such as travel and other expenses and some umbrella companies will factor this in in advance and pay more at the outset. The onus on this is on the individual taxpayer so they should find out the arrangements at the start of their contract.
For now, umbrella companies appear to be holding up against the TAAR, however they are not strictly outside the scope of the criteria and the examples set by HMRC. Whilst the risk of this happening is low under an umbrella company, there remains a risk that HMRC could decide to turn your umbrella inside out, if the government pushes them to do so.
The safest way to protect your distribution from the MVL moving forward would be to move onto the payroll of the company. This also appears to be the main practice being adopted to mitigate against future potential IR35 risks, the next obvious step in IR35 is the targeting of umbrella companies.
A Members Voluntary Liquidation (MVL) remains one of the most efficient ways of closing a solvent company but like almost every other method, it still requires expert oversight and advice.
Get in touch with us if your personal circumstances are changing and you think it’s time to make a change.
We can help you prepare everything required to have an orderly closure and help you realise your assets quicker.
When the coronavirus lockdown was formally announced, there was a flurry of activity for companies trying to sort their staffing and business operations out before having to forcibly close their doors.
The various support schemes were announced and finessed and businesses had to do their very best to keep their heads above water in the meantime.
During this hectic time, while the rules and financing for the various arrangements were in their infancy, it would have been easy to accidentally contravene them. It would also have been an opportunity for some companies to look for an unfair and illegal advantage of keeping employees working while receiving furlough money for them.
But these practices are coming to a swift end.
HMRC has been aware of allegations of impropriety and has already received more than 3,000 reports from employees that believe they’ve been asked to work illegally while on furlough for a company or that their company has been claiming money on their behalf without their prior knowledge.
Recent research showed that 34% of furloughed employees had been asked to continue doing their job and another 29% were told they had to undertake more administrative tasks instead.
Another 20% had been asked to cover another employees job within the company or work for another company linked to their employer.
Draft legislation is currently proceeding through parliament which will form part of The Finance Bill 2020 will give companies a 30-day period to admit any inadvertent infractions made contrary to the regulations of the Coronavirus Job Retention Scheme or the Self Employment Income Support Scheme.
After this opportunity expires then HMRC will use both criminal and civil powers to pursue claimants who broke the rules and will likely make one or two high-profile examples to illustrate how seriously they are taking their duties.
The draft legislation also includes the powers to pursue company office holders even if the business later becomes insolvent with joint and several liability.
The legislation is being written to target those that in the view of HMRC have deliberately set out to mislead and take advantage of the schemes so if you’re aware of any mistakes or irregularities with your own filling then now would be the right time to clear these up before HMRC start taking a closer interest in your business affairs.
These are not derisory sums involved. As of June 7th some £20 billion has been paid out to over a million companies in furlough claims while an additional £7.5 billion has been paid to the 2.6 million SEISS claimants.
Business owners and directors should make sure that all their documentation is accurate, that government guidelines were adhered to and that the amounts claimed were correct. Of course they should also make sure that furloughed staff have not been working for the company during the subsequent period.
A spokesperson for HMRC said: “This is taxpayer’s money and fraudulent claims limit our ability to support people and deprive public services of essential funding.
“Claims are checked and payment may be withheld or need to be repaid if the claim is based on dishonest or inaccurate information. We won’t hesitate to take criminal action against the most serious cases.”
Furloughed workers can begin to return to work on a part-time basis starting from July 1st while the percentage of wages paid by government and directly subsidised by employers begins in September and increases in October until the scheme is scheduled to wind-up on Halloween.
The next few months might not be the end of the disruption caused by the coronavirus but it might be the end of the beginning.
There hasn’t been a business quarter like this in living memory and it’s unlikely that things will get back to anything approaching normal for quite some time to come.
As the government’s COVID-19 support systems are wound down and withdrawn, many businesses still aren’t in a position to operate at full capacity or respond to customers as quickly and efficiently as they’d like.
If you’ve got any questions about the future of your business not only about its survival but also about what changes you need to make to give yourself the best chance of reemerging in the best possible shape then get in touch with us.
One of our expert team of advisors will arrange a free virtual initial consultation with you then once they have a clearer and firmer understanding of your circumstances, be able to work with you on a plan to reach the goals and targets your company needs to meet.
Then you can concentrate all your energy on getting back to business - as normal or as close to normal as we’ll get.
The new helpline number is 08000 159559 and is open from 8am to 8pm Mon to Fri and 8am to 4pm on Saturdays. It will be closed on Sundays and Bank Holidays.
Chancellor Rishi Sunak said: “HMRC will scale up the time to pay service to allow businesses and the self-employed to defer tax payments”.
Up to 2,000 experienced HMRC call handlers have been seconded to the service to help support businesses and individuals in the forthcoming days and weeks virus infection is expected to escalate.
The existing HMRC helplines will remain in operation as this one is specifically for COVID-19 related enquiries. Time to Pay was also used in response to previous extraordinary circumstances including the financial crisis and flooding of various communities and offers a guaranteed time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back.
Callers to the helpline will be able to agree an instalment payment arrangement; suspend pending HMRC debt collection proceedings and cancel any due penalties and interest where they have experienced administrative difficulties by contacting or paying HMRC immediately.
The NHS maintains an up-to-date website where you can find out the latest information on the virus including what to do if you think you have symptoms or if you think you have been exposed to the virus while travelling.
The COVID-19 pandemic is creating a unique set of challenges for government and business to overcome.
If you’re worried about your business in the short and medium term then you should get in touch with us.
We have a team of expert advisors available to arrange a convenient free initial consultation with you to discuss where you are now, what areas of your business you need to protect first and where you can strengthen elsewhere too.
We can then look at working on the most efficient and effective plan going forward to both protect your business and let you build on your foundations no matter what the future may hold.
Holmes has lost a First Tier Tribunal (FTT) appeal regarding his status as a freelancer under IR35 rules when a judge determined that his contract with ITV and the programme effectively amounted to employment.
This decision leaves him liable to an unpaid tax bill of £250,000.
His personal services company (PSC) called Red, White and Green Ltd (RWG) was set up in 2001. Holmes began presenting on This Morning in 2006 doing so for a period of about 15 years.
The tribunal heard details of four contracts between ITV and RWG during this period, under the terms of which RWG were required to procure Holmes’ services on an exclusive basis during the specified period or on dates agreed with the executive producer.
He also worked with Sky News between 2011 and 2015 but the tribunal heard that for the tax years 2011/12 and 2012/13, RWG’s main income stream was from This Morning.
As well as a fixed fee for each programme, his contract gave Holmes additional benefits including the provision of a car for travel to the studio, a £5,000 clothing allowance and additional travel and accommodation allowances for certain trips.
There was some argument about the extent of control between ITV and RWG but the judge concluded that there was sufficient mutuality and a framework of control to place the contract between ITV and RWG in the employment field.
ITV was required to provide work on specified dates for a fixed fee and Holmes was required to work on those dates for the fee.
In terms of control, ITV had full control of editorial content, was able to restrict Holmes’ other commercial activities and could require him not to appear on the programme in branded clothing for example.
The FTT concluded that there was sufficient mutuality and at least a sufficient framework of control to place the assumed relationship between ITV and Holmes in the employment field.
An HMRC spokesperson said: “HMRC welcomes the judgement, which confirms we took the right approach.
“The tax rules require that employment taxes are paid even where a person works through their own company, HMRC ensures that tax is paid in accordance with those rules.”
Eight notable TV and radio presenters have challenged HMRC so far at tribunal. Five have lost their cases and HMRC are appealing two of the other cases.
The only case HMRC lost and didn’t appeal involved the notable PSC of Lorraine Kelly where she successfully argued that she was playing an exaggerated version of herself rather than appearing as herself.
What the confusion proves is that sudden change in circumstance or fortune could prove terminal for any business.
If HMRC have dropped an unexpected hammer onto your finances or you’re facing another unexpected threat then get in touch with us.
One of our expert team of advisors can arrange a convenient, free initial consultation to discuss what issues you face and how best to tackle them - together.