October 2020 Newsletter | Cylchlythyr Misol Hydref 2020
The Autumn Budget has been cancelled by the Chancellor due to the ongoing uncertainty caused by Covid-19. Instead, further financial support measures were announced:
Job Support Scheme: from 1 November 2020, support is available for employees that are working reduced hours. The employer pays for all hours worked at the normal rate, but for the usual hours that are not worked, two thirds of this time will be paid between the employer and the Government. Eligible employees must work at least a third of their normal hours to qualify.
Full details can be found here
Self-Employment Income Support Scheme: a third and fourth grant for the self-employed has been confirmed by the Treasury. The third grant will provide support based on 20% of average profits (significantly lower than previous grants). We await confirmation of the opening date for applications. Remember that the deadline for the second grant is 19 October 2020.
Full details announced to date can be found here
Deferral of tax payments: self-assessment income tax payments of up to £30,000 due by 31 January 2021 can be repaid over 12 months by applying to use HMRC's "Enhanced Time to Pay" scheme, however interest of 2.6% will be charged on the amounts due.
The Welsh Government have announced that they are re-opening their Economic Resilience Fund during the week commencing 26 October 2020. This fund offers grants of up to £10,000 for micro businesses, up to £150,000 for SMEs and up to £200,000 for large businesses.
From 31 October 2020, many banks will introduce overdraft interest rates of 40%. Check the impact on your accounts and consider a short-term loan to clear the overdrafts, if cheaper.
Numerous online app banks, such as Tide and Coconut, are not covered by the Financial Services Compensation Scheme (FSCS) which protects deposits of up to £85,000 per financial institution. If you have significant deposits held with these online app banks, consider spreading your deposits across banks that offer FSCS protection.
Ask Huw: I have been resident in the UK for the last 5 years and own a rental property in Spain. I will be moving permanently to France to work next month. Will I pay UK tax on my Spanish income?
When you move into or out of the UK, there is a possibility that your tax year will receive "split year treatment". Although you are an overseas citizen, for the period that you are resident in the UK, normally worldwide income is subject to UK, less broadly any tax paid overseas. If you leave the UK midway through a tax year, your UK tax will be based on income received in the UK up to the date of departure along with foreign income earned up to the date of departure.
These scenarios can get complicated very quickly, therefore please get in touch if you or your family have any queries relating to foreign income.