New Rules for Using Losses (& other things)
Update 51 - Office Closure, Losses & COVID Grants
Unfortunately one of the team has contracted Covid and although we have been very careful and "covid-safe" in the office, I have made the decision to close the office for at least a week (happy freedom day!).
In other news:
1. The SEISS final grant will soon be opening for application. The details about the fifth grant for the self-employed can be found in a previous article
2. CJRS and other grants. When you complete your tax return (company or personal), you need to declare in special boxes the amount of money you have received from the CJRS grant or from Eat Out To Help Out or SEISS. If we do your return for you, we will ensure this is done correctly. It is important you give us these details when we ask for them. If you do your own return, you must make sure these boxes are completed properly. If they are not, HMRC will amend your return to add them in, so you could end up being taxed twice on this income.
3. HMRC have started to ramp up their CJRS (furlough) enquiries. You must make sure that you have all the required documentation, such as signed letters for every time you change an employee's furlough status , board meetings, timesheets to prove hours worked/not worked. The penalty for mis-declaration of furlough is 100% so it could be very expensive to get this wrong.
4. Company Losses. Previously, we could only carry back company losses for one year. Under new rules, for accounting periods ending between 1 April 2020 and 31 March 2022, we can carry losses back for 3 years. There are specific rules that you need to follow, and if we do your tax return we will of course do this for you (assuming it is the best course of action). HMRC have said that if the loss is under £200,000 you will be able to make a claim outside of a tax return, but I just do not see the point in this and think it will potentially cause all sorts of issues.
However... any one who has ever tried to carry a loss back will know that you will be waiting at least 6 months, if not a year, for this to be processed, so don't expect or rely on getting the money back quickly from HMRC.
This article was first published on 19 July 2021. Some of the grants may no longer be available or the information may have changed or been updated. Please check the current rules and legislation with a professional