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Bounce Back Loan repayment terms extended to 10 years

Bounce Back Loan borrowers will now have the option to tailor payments under the Pay as You Grow which is available to over 1.4 million businesses, which collectively took out nearly £45bn through the Bounce Back Loan Scheme.

There is now the option to extend the length of your loans from six to 10 years (reducing monthly repayments), make interest-only payments for six months or pause repayments for up to six months.

Amongst other things it means that you can now choose to make no payments on your loans until 18 months after you originally took it out.

The government has confirmed that lenders will reach out to borrowers to provide information on repayment schedules and how to access flexible repayment options.

It will provide businesses with the following options:

  • extend the length of the loan from six years to 10 at the same fixed interest rate of 2.5%;
  • make interest-only payments for six months, with the option to use this up to three times throughout the loan; and
  • pause repayments entirely for up to six months. This option is available once during the term of the Bounce Back Loan.

CJRS – Update and Refresher

If your employee is unable to work because they are ‘caring for children who are at home as a result of school and childcare facilities closing’ then they can be furloughed. This was confirmed by HMRC on 5 January 2021.

The Coronavirus Job Retention Scheme (CJRS) has been extended until 30 April 2021. This was announced late last year and confirmed by the 5th Treasury Direction which was issued on 26 January 2021.

Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 per month. This cap is proportional to the hours not worked. Employers will not be required to contribute or top-up for the hours not worked.

The government will meet the pay of the employee up to this cap, but the employer remains responsible for meeting the pension and national insurance contributions (NIC) costs. The employer will, of course, pay the employee for the hours actually worked in the normal way.

Valentine’s – Tax Efficient Romantic Gestures

Give your spouse/civil partner 10% of your personal allowance

If your taxable income is below the personal allowance (currently £12,500) and your spouse/civil partner is a basic rate taxpayer, you can transfer up to 10% of your personal allowance which could save them tax of up to £250. You can also backdate the claim to include any tax year from 5 April 2016 onwards, provided you both met the criteria in the relevant year.

Make a Covid-wedding gift

Inheritance tax exemptions for gifts on marriage/civil partnership are available (even if you do not make the final limited guest list) and may be even more valuable. The exemption ensures gifts of up to £1,000 per couple are immediately exempt from inheritance tax. This amount is increased to £2,500 for gifts to grandchildren and £5,000 for gifts to children.  

If you’re thinking of transferring assets to your beloved, wait until you’re married

Transfers of assets (such as shares or property) between spouses/civil partners are free from capital gains tax and inheritance tax, but if an asset is transferred before marriage/civil partnership the normal tax rules apply.

 Contribute to your spouse/civil partner’s pension

Pension relief has been restricted for high earners, but you can contribute to your spouse/civil partner’s pension although any tax relief belongs to them. For taxpayers with no ‘relevant earnings’ the maximum pension contribution that can be made in a tax year is £2,880 net (£3,600 gross).

Give a gift that keeps on giving

Not only can this be a more meaningful gift, but you can also claim Gift Aid relief on the donation, which means the charity gets an extra 25% from the government and higher or additional rate taxpayers can claim further tax relief from HMRC.

If you have made Gift Aid donations in the past and not claimed further tax relief, a claim can be made for up to four years after the year in which the donation was made. For example, relief for a donation made in 2020/21 can be claimed up to 5 April 2025.

Pay a late filing penalty

If your partner didn’t submit their 2019/20 tax return before 31 January, save them a £100 late filing penalty and remind them they need to submit it by 28 February 2021.

Grants – new to importing or exporting?

The government has launched the SME Brexit Support Fund giving up to £2,000 to help with training or professional advice on exporting for businesses with up to 500 employees.

The SME Brexit Support Fund is to help businesses get to grips with post Brexit importing or exporting rules.

To provide SMEs with additional support, the fund will be administered through the pre-existing Customs Grant Scheme and will open for applications next month.

Eligible businesses must have a turnover under £100m and will be able to use the grants for training on how to complete customs declarations, manage customs processes and use customs software and systems. This will also cover specific import and export related aspects including VAT, excise and rules of origin.

It can be used to help get professional advice so SMEs can meet their customs, excise, import VAT or safety and security declaration requirements.

To qualify for the grants, SMEs must:

  • be established in the UK;
  • have been established in the UK for at least 12 months before submitting the application, or currently hold Authorised Economic Operator status;
  • not have previously failed to meet its tax or customs obligations;
  • have no more than 500 employees;
  • have no more than £100 million turnover; and
  • import or export goods between Great Britain and the EU, or moves goods between Great Britain and Northern Ireland.

The business must also either:

  • complete (or intend to complete) import or export declarations internally for its own goods; or
  • use someone else to complete import or export declarations but requires additional capability internally to effectively import or export (such as advice on rules of origin or advice on dealing with a supply chain).

Applications for the grants will open in March and PwC will administer the scheme for HMRC through an online portal.

Guidance from HMRC – Importing from, and exporting to, the EU

HMRC have published guides which set out the new step by step processes for both importing and exporting to/from the EU. Below we have set out the stapes but to access the detailed guidelines follow the links below.

Import goods into the UK: step by step

How to bring goods into the UK from any country, including how much tax and duty you’ll need to pay and whether you need to get a licence or certificate.

Step1:  Check if you need to follow this process

Step2:  Get your business ready to import, and check the business sending you the goods can export to the UK

Step3:  Decide who will make customs declarations and transport the goods

Step4:  Find out the commodity code for your goods, and work out the value your goods

Step5:  Find out if you can delay or reduce your duty payment

Step6:  Check if you need a licence or certificate for your goods

Step7:  Check the labelling, marking and marketing rules

Step8:  Get your goods through customs

Step9:  Claim a VAT refund

Step10:  If you paid the wrong amount of duty or rejected the goods

Step11:  Keep invoices and records

https://www.gov.uk/import-goods-into-uk

Export goods from the UK: step by step

How to move goods from the UK to international destinations, including the EU.

Step1:  check if you need to follow this process

Step2:  Check the rules for exporting your goods and apply for any licences you need to export your goods

Step3:  Get your business ready to export and check whoever’s receiving the goods can import them

Step4:  Decide who will make export declarations and transport the goods

Step5:  Classify your goods

Step6:  Prepare the invoice and other documentation for your goods

Step7:  Get your goods through customs

Step8:  Keep invoices and records

https://www.gov.uk/export-goods

Bounce Back Loan borrowers will now have the option to tailor payments under the Pay as You Grow which is available to over 1.4 million businesses, which collectively took out nearly £45bn through the Bounce Back Loan Scheme.

There is now the option to extend the length of your loans from six to 10 years (reducing monthly repayments), make interest-only payments for six months or pause repayments for up to six months.

Amongst other things it means that you can now choose to make no payments on your loans until 18 months after you originally took it out.

The government has confirmed that lenders will reach out to borrowers to provide information on repayment schedules and how to access flexible repayment options.

It will provide businesses with the following options:

  • extend the length of the loan from six years to 10 at the same fixed interest rate of 2.5%;
  • make interest-only payments for six months, with the option to use this up to three times throughout the loan; and
  • pause repayments entirely for up to six months. This option is available once during the term of the Bounce Back Loan.

CJRS – Update and Refresher

If your employee is unable to work because they are ‘caring for children who are at home as a result of school and childcare facilities closing’ then they can be furloughed. This was confirmed by HMRC on 5 January 2021.

The Coronavirus Job Retention Scheme (CJRS) has been extended until 30 April 2021. This was announced late last year and confirmed by the 5th Treasury Direction which was issued on 26 January 2021.

Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 per month. This cap is proportional to the hours not worked. Employers will not be required to contribute or top-up for the hours not worked.

The government will meet the pay of the employee up to this cap, but the employer remains responsible for meeting the pension and national insurance contributions (NIC) costs. The employer will, of course, pay the employee for the hours actually worked in the normal way.

Valentine’s – Tax Efficient Romantic Gestures

Give your spouse/civil partner 10% of your personal allowance

If your taxable income is below the personal allowance (currently £12,500) and your spouse/civil partner is a basic rate taxpayer, you can transfer up to 10% of your personal allowance which could save them tax of up to £250. You can also backdate the claim to include any tax year from 5 April 2016 onwards, provided you both met the criteria in the relevant year.

Make a Covid-wedding gift

Inheritance tax exemptions for gifts on marriage/civil partnership are available (even if you do not make the final limited guest list) and may be even more valuable. The exemption ensures gifts of up to £1,000 per couple are immediately exempt from inheritance tax. This amount is increased to £2,500 for gifts to grandchildren and £5,000 for gifts to children.  

If you’re thinking of transferring assets to your beloved, wait until you’re married

Transfers of assets (such as shares or property) between spouses/civil partners are free from capital gains tax and inheritance tax, but if an asset is transferred before marriage/civil partnership the normal tax rules apply.

 Contribute to your spouse/civil partner’s pension

Pension relief has been restricted for high earners, but you can contribute to your spouse/civil partner’s pension although any tax relief belongs to them. For taxpayers with no ‘relevant earnings’ the maximum pension contribution that can be made in a tax year is £2,880 net (£3,600 gross).

Give a gift that keeps on giving

Not only can this be a more meaningful gift, but you can also claim Gift Aid relief on the donation, which means the charity gets an extra 25% from the government and higher or additional rate taxpayers can claim further tax relief from HMRC.

If you have made Gift Aid donations in the past and not claimed further tax relief, a claim can be made for up to four years after the year in which the donation was made. For example, relief for a donation made in 2020/21 can be claimed up to 5 April 2025.

Pay a late filing penalty

If your partner didn’t submit their 2019/20 tax return before 31 January, save them a £100 late filing penalty and remind them they need to submit it by 28 February 2021.

Grants – new to importing or exporting?

The government has launched the SME Brexit Support Fund giving up to £2,000 to help with training or professional advice on exporting for businesses with up to 500 employees.

The SME Brexit Support Fund is to help businesses get to grips with post Brexit importing or exporting rules.

To provide SMEs with additional support, the fund will be administered through the pre-existing Customs Grant Scheme and will open for applications next month.

Eligible businesses must have a turnover under £100m and will be able to use the grants for training on how to complete customs declarations, manage customs processes and use customs software and systems. This will also cover specific import and export related aspects including VAT, excise and rules of origin.

It can be used to help get professional advice so SMEs can meet their customs, excise, import VAT or safety and security declaration requirements.

To qualify for the grants, SMEs must:

  • be established in the UK;
  • have been established in the UK for at least 12 months before submitting the application, or currently hold Authorised Economic Operator status;
  • not have previously failed to meet its tax or customs obligations;
  • have no more than 500 employees;
  • have no more than £100 million turnover; and
  • import or export goods between Great Britain and the EU, or moves goods between Great Britain and Northern Ireland.

The business must also either:

  • complete (or intend to complete) import or export declarations internally for its own goods; or
  • use someone else to complete import or export declarations but requires additional capability internally to effectively import or export (such as advice on rules of origin or advice on dealing with a supply chain).

Applications for the grants will open in March and PwC will administer the scheme for HMRC through an online portal.

Guidance from HMRC – Importing from, and exporting to, the EU

HMRC have published guides which set out the new step by step processes for both importing and exporting to/from the EU. Below we have set out the stapes but to access the detailed guidelines follow the links below.

Import goods into the UK: step by step

How to bring goods into the UK from any country, including how much tax and duty you’ll need to pay and whether you need to get a licence or certificate.

Step1:  Check if you need to follow this process

Step2:  Get your business ready to import, and check the business sending you the goods can export to the UK

Step3:  Decide who will make customs declarations and transport the goods

Step4:  Find out the commodity code for your goods, and work out the value your goods

Step5:  Find out if you can delay or reduce your duty payment

Step6:  Check if you need a licence or certificate for your goods

Step7:  Check the labelling, marking and marketing rules

Step8:  Get your goods through customs

Step9:  Claim a VAT refund

Step10:  If you paid the wrong amount of duty or rejected the goods

Step11:  Keep invoices and records

https://www.gov.uk/import-goods-into-uk

Export goods from the UK: step by step

How to move goods from the UK to international destinations, including the EU.

Step1:  check if you need to follow this process

Step2:  Check the rules for exporting your goods and apply for any licences you need to export your goods

Step3:  Get your business ready to export and check whoever’s receiving the goods can import them

Step4:  Decide who will make export declarations and transport the goods

Step5:  Classify your goods

Step6:  Prepare the invoice and other documentation for your goods

Step7:  Get your goods through customs

Step8:  Keep invoices and records

https://www.gov.uk/export-goods

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