Pixel

The Tax Implications Of The Coronavirus Pandemic

Gary Green
Gary Green
March 20, 2020

With the coronavirus causing panic throughout the world, we thought we should look at some of the tax implications.

The coronavirus pandemic is going to cause a number of changes to finance, business and work. In today's article, we'll give you our analysis on how this will affect your tax status, liability and reporting.

Obviously, things are changing by the day. We'll have many more articles in the weeks and months to come as things develop. Please feel free to check out all the other tax articles on our website too.

HMRC has launched a dedicated page to offer support for business. It has a good summary of the measures introduced so far.

Working From Home - Employees

The biggest change to the normal UK working pattern will be the rise in people working from home. If you are a normal, salaried employee, you may be able to claim some tax relief on bills. This includes:

  • Gas
  • Electricity
  • Telephone calls

There are a couple of conditions that you must fulfill:

  • Things like telephone calls must be specifically for business purposes
  • Only a reasonable portion of utilities bills will apply for tax relief
  • You must be working from home at the specific request of your employer

Working From Home - Self Employed

If you work from home as a self-employed person, you have a bit more flexibility. There are broadly two ways you can offset your running costs.

The "simplified" option works off a flat rate. You just need to keep a running total of how many days you work from home each month. It's convenient and simple to calculate (only telephone calls need to be itemised separately). The bands are:

  • 25-50 hrs per month - £10
  • 51-100 hrs per month - £18
  • 101+ hrs per month - £26

As we say, this is the most simple way of doing things. However, you may be able to get more relief via the "fair and reasonable" method. Here you actually work out the direct costs per month and use that figure.

As you can imagine, this requires a bit of calculation. You will have to pro-rata overheads costs (like heating and lighting) by the number of rooms in your house. If you'd like some help doing this, it's often easier to work with a personal tax specialist.

SSP, Wage Subsidies & Business Rates

The government has announced that SMEs can reclaim statutory sick pay (SSP) paid because of coronavirus. The refund covers up to two weeks of pay, and applies to companies under 250 employees.

There have also been discussions around wage subsidies. Under the proposed scheme, businesses will not make staff redundant. They will keep employees "on the books" while cutting salaries (possibly to zero). The government will then make up the difference.

Finally, the government has promised cash grants and business rate "holidays" to the following sectors:

  • Shops
  • Restaurants & cafes
  • Cinemas
  • Hotels

The tax implications of these changes are currently unclear. There will have to be further clarification from HMRC as to how these grants and rebates will be paid, recorded and filed. We will keep you up to date as soon as new developments arise.

If you'd like to discuss with us how the virus might affect your business or your personal finances, please get in touch.

Interested in our services?
Fill in your details and a member of our experienced team will be in touch shortly to discuss your needs.
We adhere to strict GDPR rules and do not reveal or sell your data to any third-parties. For more, please read our Privacy Policy.
Latest Insights
May 5, 2021
How To Reduce Corporation Tax by Claiming Creative Industry Tax Reliefs

Creative Industry Tax Reliefs (CITR) are a collection of Corporation Tax reliefs that allow qualifying companies...

April 27, 2021
National Minimum & Living Wage Considerations For Employers

One of our most important jobs, as employers, is to help control payroll costs. However, one...

April 20, 2021
Employment Allowance: How to Make and Backdate a Claim

The Employment Allowance allows eligible employers to reduce their National Insurance liability. The allowance increased to...

April 20, 2021
How to Get an Overseas Employee Set Up on UK Payroll

Getting an overseas employee set up on UK Payroll can be complex. Employers in the UK...

April 15, 2021
How To File Your Company End-of-Year Accounts For The First Time

If you have recently setup a new limited company or are thinking of doing so, then...

April 13, 2021
How Does Equity Crowdfunding Work? All You Need to Know

In this article, we uncover the ins and outs of equity crowdfunding and the key considerations...

April 8, 2021
Why You Should Set Up a Trust To Cut Inheritance Tax

Inheritance Tax (IHT) is levied on a person’s estate when they die and can also be...

April 1, 2021
The Best Tax-Efficient Options To Pay Yourself As A Business Owner

Most director shareholders want to ensure that they pay the combined lowest rate of tax possible...

March 29, 2021
Chancellor Warns Businesses to Keep Offices – But Remote Working Is Here to Stay

Despite the UK's 'work from home' guidance likely to come to an end in late June,...

View Our latest insights »
Get the latest UK tax & business news and guidance delivered straight to your inbox
We care about the protection of your data. No spam. Unsubscribe anytime.
02037 282 848
Mon-Fri 9am - 5.30pm
contact@keybusinessconsultants.co.uk
expert financial advice at your fingertips
Copyright © 2021 Key Business Consultants LLP. Reg: E&W OC389322
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram