Support available for businesses due to COVID-19

The impact of the ongoing coronavirus pandemic on businesses is unsettling and evolving fast.

At gHawk Accounting, we are working hard to support our clients starting with those with the greatest need. Our team is fully set up and working from home as our software is cloud based and can be accessed over the internet.

Below is a summary of the help available from the government to support businesses affected by Covid-19.  We will continue to update this page as more information is released on the support schemes available, who is eligible and how to get the assistance.

Full details are available on this government page

Ask gHawk: COVID-19 Frequently Asked Questions

We will update this page with questions we are receiving from our clients, so feel free to message us with your question and we will add to our Frequently Asked Questions.

Am I self-employed or employed?

A self-employed person trades in their own name as opposed to through an intermediary e.g. a recruitment agency of company. So, if you are a director or shareholder of a limited company and the company runs a Pay As You Earn (PAYE) Scheme – then you are an employee, and not self-employed

How do I get the support if I am self-employed?

You can claim a grant of up to £2,500 per month through the coronavirus (COVID-19) Self-employment Income Support Scheme

How do I access the grants recently announced?

Refer to the image above -your local council will write to you if you are eligible.

What taxes can I defer

You can defer VAT payments from 20 March 2020 to 30 June 2020. Income tax payments due under the self-assessment system may be deferred until January 2020. If unable to pay any other taxes, you should apply for a Time To Pay arrangement by calling HMRC on 0800 0159 559

What if I can’t pay the rent for my commercial property

The government has introduced Protection from eviction for commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.

These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.

There is the option for the government to extend this period if needed.

This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.

I am an employer and may have to lay off employees as our work has run out. What should I do?

You can access up to 80% of your employees’ wages up to £2,500 per month through the Coronavirus Job Retention Scheme. This allows an employer to ‘Furlough’ their employees for up to 3 months from 1 March 2020. Furloughed employees cannot provide services to a business, otherwise a claim cannot be made under the scheme.

I am a director of a company and pay myself a salary and dividends. Are my dividends covered by the coronavirus job retention scheme?

No Sadly dividends is not covered by the scheme, but your salary is.

How can I apply for the Corona Virus Business Interruption loan?

All major banks are now offering the scheme. Speak to your bank or visit the British Business Bank website to find out the participating banks.

Transferring your VAT Registration Number

transferring your VAT number

VAT can be complex and confusing at times. Under current guidelines, you need only register for VAT if your VAT taxable turnover exceeds £85,000. You can also register voluntarily, if you wish.

VAT – Value Added Tax is a consumption tax which applies to good and services. The current VAT rate (as of 2011) is 20% – this must be added to the price of good and services where VAT applies. Supposedly, VAT only applies to ‘non-essential, luxury items’, but there are some inconsistencies, so it’s worth checking.

With services, such as plumbing, decorating or building work, you only have to pay VAT if the company is VAT registered (i.e turning over in excess of £85,000).

There may be circumstances where a VAT registration number needs to be transferred to another business. Here, we answer some common questions about the process and how to navigate it with ease.

Why would you need to transfer your VAT registration number?

You may wish to transfer a VAT registration number if you have bought a company and wish to continue using it’s VAT registration number, or likewise, if you are selling a VAT registered business. You may set up a new business and wish to transfer your VAT registration to the new one, as the old business will no longer meet the threshold. Be aware the continually transferring a VAT registration number may arouse suspicions. If you are buying a company, but you are already VAT registered, you may use your current VAT registration number.

How to do it…

The first thing to remember about VAT registration transfers is that both parties must tell HMRC of the intention.

  1. Cancel any and all direct debits connected to the VAT registration number in question.
  2. Use your VAT online account to fill out a transfer form, OR send a VAT68 form by post.
  3. Within 3 weeks, you will receive confirmation from HMRC that the transfer has been successful.

Responsibilities…

Once the VAT registration number has been successfully transferred, there are a few final steps to complete to ensure VAT compliance.

  1. The original registration holder should cancel their VAT online account’s accountant access. (Unless the new registration holder intends to use the same accountant).
  2. Any and all records relating to the previous owner’s VAT registration number should be passed over to the new owner, to compile a complete VAT history.
  3. The new owner must set up new self-billing arrangements, in order to pay their VAT correctly – in order to do this, they must register for VAT from the day they take over the business.
  4. As the new business owner, you may only claim VAT on purchases for the business once you own it. These can be reclaimed on your first VAT return.

Once you are registered for VAT, you must pay your quarterly tax return online. There are some tax benefits to paying VAT, such as claiming VAT in director’s mileage.

If you’re confused or concerned about transferring a VAT registration, paying your VAT contributions or claiming back VAT, check out the HMRC website or get in touch today.

7 things you need to discuss with your accountant

7 things you need to discuss with your accountant

As business owners, many of us know that we need an accountant. This might be because we don’t have the time or expertise to keep up with our finances, or because we are concerned about being properly tax compliant.

However, getting an accountant involved in your business doesn’t mean that you no longer need to think about your finances – in fact, it’s good practise to leverage your accountant’s unique skillset in order to learn, implement and grow!

Having had hundreds of detailed financial discussions with our clients over the years, here are my recommendations of a few things you might want to discuss at your next meeting.

1. Your business goals

According to Leon Tec, M.D., A sailor without a destination cannot hope for a favourable wind. When running a business, you must set some goals so that you are clear what a good day’s work looks like. Your accountant will need to know what you are hoping to achieve in order that they can advise and guide you to help you get there. Most successful businesses have their goals documented in a business plan – usually on one page. A business plan is alive document which you should review with your accountant regularly.

2. Your personal goals

Your business goals will be different from your personal goals. Your business should help you achieve your personal goals e.g. having enough time off work, family holidays, financial freedom or to make a difference to your industry. Whatever you are passionate about. It is important to have a clear understanding of what you are trying to achieve for YOURSELF through your business.  And if your accountant knows that too they can help you and hold you accountable.

3. Pensions/Retirement

If you’re in your thirties, forties or fifties – thinking about your retirement may seem a little premature. However, any charted accountant will tell you that it’s never too soon to prepare for the inevitable. Who knows, you might get lucky and be able to retire early if you plan well enough in advance.

Involving your accountant in the early stages of planning for your old age means that you’ll be getting the best advice and maximising your tax benefits from the start. There are several different types of pensions, including: personal, stakeholder, company, Self-Invested Personal Pensions (SIPP) and state pensions – plus many more. Allow your accountant to help you navigate the choices.

4. Managing risks with business insurance

Getting insurance is a great way to protect yourself and your business. An accountant will be able to advise you on insurance types and how to claim the premiums back as expenses. There are many types of insurance, with different business needs in mind. Some examples include: professional liability insurance, property insurance, personal accident cover, life insurance, home-based business insurances, product liability insurance and many more, dependant on your industry. Business insurance will qualify as an allowable expenses to reduce the amount of tax you pay.

5. Business Purchases & Expenses you can claim

Whether you’re a service or product based business, there are many items and services that you purchase in order to run your enterprise. It is often surprising to many people that a lot of their purchases can be claimed back as expenses. From mileage to paper supplies, home offices to dry-cleaning – an accountant will be able to advise on easy areas to save and conserve costs when it comes to your tax return.

6. Taxes – what they are when they are due

The end of the tax year needn’t strike fear into your heart. Your accountant can look after your tax liabilities, whether you’re freelance, contracting, a limited company or VAT registered. In fact, the larger your company gets, the more complicated your tax return can become. Bigger businesses will be required to report their VAT liabilities more frequently than smaller businesses. You can involve an accountant at any point in the process, but it is advised to have some professional input when it comes to preparing your tax returns.

7. Systems for your business

In the digital age, it’s worth understanding the security and storage of your business records. With the increasing use of smart phones and cloud accounting technology, you should consider using systems that allow you to have access to your data securely from any devise. Your accountant can provide the necessary training to help you get confident with using cloud systems. Using cloud accounting systems will also mean that you and your accountant have joint access. It is  beneficial to work with an accountant who utilises your chosen software. Having 24/7 access to your accounts can give you peace of mind and help you to learn about your business finances at the same time.

If you’d like to discuss any of the above points with us, we’re happy to give impartial and no-obligation advice. Check out our services page for more information, drop us an email or give us a call.


VAT on postage of orders

VAT isn’t always utterly straight-forward to understand. When it comes to postage, it can get even more confusing.

Is postage exempt? Do I charge VAT on packaging and delivery? Who pays the VAT on my carrier charges?

It’s a minefield. Never fear, here are some examples to help simply the process.

Charging VAT on postage

Posting letters or parcels with Royal Mail is exempt from VAT (unless you’re recharging those costs), however, other couriers or delivery costs charged by delivery companies are subject to VAT. Businesses that supply delivered goods and use the Royal Mail Group for delivery will not be charged VAT, so there will be no VAT to reclaim.  However, where other courier and delivery companies are used, VAT will be charged and that VAT can be reclaimed in the normal way.

Using the government’s current VAT on postage guidelines, these examples should answer whether or VAT is owed for postage on ‘delivered goods’.

I deliver goods to customers, but delivery is free

If delivery is free (or accounted for in the price of the product itself), VAT is accounted for by the sales price of the goods.

I deliver goods to customers and charge them for postage

Whether the postage is separately itemised, or included in the price, the VAT is based on the liability of the goods.

I deliver zero-rated goods

If you deliver zero-rated goods (e.g. printed materials), then the postage is zero-rated also.

I am a retailer using a retail scheme

Accounting for delivery charges will depend on the type of scheme you are registered under. Check the relevant guidance.

Claiming VAT on postage

Postage costs are a business expense. When the courier charges you VAT, you claim it back in the same way you’d claim back any other VAT-charged expense.

Charging VAT within the EU

At the moment, if you sell goods or services to someone who is not VAT registered in another EU country, you must charge VAT as you would for a UK customer. You must include the sale in your VAT return, as normal.

If you are selling goods to someone who is VAT registered, in the EU, you can zero-rate the supply for VAT purposes as long as:

  • You sent goods out of the UK to an EU country
  • The person you are sending to is VAT registered in their EU country and you have their VAT number
  • You have evidence of the sale and postage (sometimes known as ‘evidence of removal’)

You must keep the evidence of this sale for 6 years, in case HMRC would like to see it and you must still include zero-rated sales on your VAT return.

To keep up to date with changes on the postage VAT guidance, check with HMRC. After Brexit, there may be several changes to the ways in which we claim and charge VAT, both inside and outside Europe.

If you’re concerned about the implications of Brexit on your small business, please get in touch or check out our article on Brexit Implications.