We’re living through unprecedented times; it’s not going to be easy and we are all going to have to work together to get through it. Many of you will have questions on what this will mean from a financial perspective and where you go from here. There is a certain amount of help and support out there but making sense of it isn’t always easy. HW Fisher have pulled together some key guidance and highlighted where you can look for good advice.
The Chancellor has announced several initiatives to support businesses that may run into financial difficulties as a result of the impact of coronavirus. Some useful references on each of these are listed below:
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service.
For concerns about upcoming tax payments, there is a dedicated helpline and Time To Pay service in place: https://www.gov.uk/difficulties-paying-hmrc
There may be additional avenues of support open to you as well, including insurance claims for business interruption. There may be scope to claim from your insurance company, depending on the type of cover and policy you have in place.
Now, more than ever this is vital. Keeping on top of your tax obligations is often time-consuming and the many different rules and regulations can often make it seem quite tricky. However, it will be important to make sure your records are up to date.
It is important to keep full records of income and expenses, including receipts wherever possible. It is also useful to annotate credit card and bank statements and to keep diary notes of expenses where receipts are not available.
Recording expenses will help to keep tax liabilities down and will also assist in dealing with any queries raised by HMRC in an Enquiry. They tend to want to argue about the level of expenses claims so it is important to have as much ammunition in place as possible. It will in future be a good idea to have a separate account for your business activities, particularly when Making Tax Digital is introduced.
One of the most understated claims is that of use of home as office. If you have a room that is furnished as an office, it is worth noting that a claim for running costs can be made for 365 days a year. For example, these can include rent or mortgage interest, council tax, buildings insurance, contents insurance, water, repairs and decorating, service charges, as well as light, heat and power.
Authors can generally claim most cultural expenditure e.g. books, theatre tickets, or Netflix subscription if it is business related. We would recommend excluding a percentage to cover any private element. If you’re not sure, speak to your accountant.
The Government will support businesses to access bank lending and overdraft facilities. They will also provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
Most authors cannot live on what they make from writing books. Many have to rely on income from employment, pensions or partners’ incomes. Those authors who are lucky enough to have a publishing contract will know when royalty advances will be paid. Once the advances have been earned fully and royalties are due, publishers can sometimes be persuaded to pay royalties ahead of the payment dates specified in the contract. This is only likely when they know that sales are going particularly well. Authors who are short of funds, therefore, might like to give this a try.
The Society of Authors has access to charitable and emergency funds available to provide support for authors affected by the coronavirus.
The Business Interruption Loan Scheme is available to small and medium sized businesses. As long as they have been run profitably in the past and have lost business owing to the coronavirus, loans should be available for viable projects and business proposals. Applications should be made via your own bank.
Should you have any questions, please do not hesitate to contact us.
25 March 2020
The information contained in this guidance has been obtained from public sources and every attempt has been made to ensure its accuracy at the date of publication. In this ever changing environment, this information is subject to change and we will not accept liability for losses arising from changes in the law or the interpretation thereof.