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Covid-19 - Business support, advice, guidance and working arrangements

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Covid-19 Client Business Support - 19th March 2020

Posted on 19 Mar 2020 - News

Coronavirus

Rental Tenants

Under emergency coronavirus legislation announced by the housing secretary, private and Housing Association tenants who are unable to pay their rent will not be evicted from their homes for at least three months.

Unless the Government subsidises landlords, after the three month period landlords will be required to enter into a debt repayment plan with Tenants.

It is unclear whether the announcements made on 17 March for relaxation of mortgage payments for private mortgages will extend to the residential lettings sector. If it does not, this will leave landlords footing the bill for unpaid rent and it may be likely in the majority of cases that tenants will be in permanent default of rent.

This may cause a shock to the sector, especially for those with portfolios of highly geared debt.

UK Finance has announced that lenders have agreed a three month moratorium on residential and buy-to-let possession action, starting from today.

The trade body says the move will help "provide customers with reassurance that they will not have their homes repossessed at this difficult time".

IR35 Reforms delayed until 6th April 2021

The implementation of reforms to IR35 tax rules in the private sector have been postponed by government for a year in a bid to safeguard the economy against the coronavirus crisis.

Speaking at yesterday’s Budget debate in the House of Commons, chief secretary to the Treasury Steve Barclay announced the reforms to IR35 off-payroll working rules would now not come into effect until 6th April 2021.

What does this mean?

If you are a medium or large sized business, from 6th April 2020 you would have been responsible for determining the IR35 status of those contractors who undertake work for you through intermediaries, most typically Limited Companies.

Medium or Large for these purposes means meeting two out of the following three criteria:

  • Turnover of more than £10.2million
  • Balance Sheet of more than £5.2million
  • More than 50 employees

The extension of reasonability also meant if you were the fee payer you had to ensure the correct amount of tax was collected and if you were not, you had a responsibility to pass the IR35 determination to the worker and fee payer.

However, this shift in the responsibility has now been delayed for 12 months and this means it is still the responsibility of the contractors operating through their Limited Companies or other intermediaries, for determining their IR35 status and applying the correct amount of tax.

What is important to note is that for all businesses who engage with workers operating as sole traders, these continue to be the end client’s responsibility to determine their employment status.

What should you do?

If you are the worker operating through your Limited Company or other intermediary, then you will need to ensure you are assessing your IR35 status.

If you are a medium or large business, then we sympathise that currently you will likely have far more pressing issues at hand and welcome the delay. However, when you are ready to assess your contractor workforce our team of experts are on hand to guide you through the rules and help you to put processes in place.

For more information please get in touch with our tax team who will be happy to help.

Is your finance team ready to work from home?

More and more employers and their employees are putting in place plans for working from home in line with government direction to manage the impact of Covid-19. Working from home will be easier for some more than others, certainly remote working of a finance team comes with its own challenges.

However, over recent years there has been some significant developments in the availability and functionalility of accounting software, especially cloud based progammes. These include remote Xero, QuickBooks Online (QBO) & Sage 50Cloud, all of which make it possible and easier for those charged with managing the finances remotely.

Whilst you will need to consider the details, such as the actual technology or devices staff plan to work on, confidentiality and logistics of remote working, the following considers the practical access issues of getting onto your accounting software.

Xero and QBO

If you are using cloud based accounting software (like Xero or QBO) your accounting staff will be able to log on to their account from home.

As this system is truly cloud based, the software can be accessed on any device with internet access.

With Xero, in some instances, the software will ask for confirmation of login if you haven’t logged in from that location before – in which case you will need access to your email account as well.

With QBO the 2 factor authentication (an authorisation code via text /email) confirms the user’s identity.

Sage 50Cloud

Sage 50Cloud requires a little more planning. It needs to be installed on a specific pc or laptop. If you wish to work on Sage 50Cloud remotely you need to install the software on the specific machine you wish you work on (e.g. a laptop you are taking home). This will need to be set up before you wish to work remotely.

In order to work on live data (rather than a backup) you need to set up your Sage Drive.

Sage Drive creates a ‘live copy’ of your data in the cloud and shares this with the remote user. Any transactions entered by the remote user are pushed back to the office server.

Your Sage data still remains on your office server – the Sage Drive acts as a ‘live copy’, moving data to and from the server and the remote user.

Sage Drive also requires the set up of encryption passwords.

If you already use that laptop in the office with Sage, you may need to set up a second installation or change your data to look at the sage drive instead of the server during a period of working out of the office.

Finally, remember you will still need to back up your data as normal.

Below are the links to setting up Sage Drive and the sage Working From Home guide.

https://ask.sage.co.uk/scripts/ask.cfg/php.exe/enduser/std_adp.php?p_faqid=33604

https://ask.sage.co.uk/scripts/ask.cfg/php.exe/enduser/std_adp.php?p_faqid=46314

For help with the set up you can contact the Sage support line on 0800 33 66 33.

Using Sage Drive requires time to set up; if you think you may want remote access to your Sage 50Cloud, we would suggest you arrange this as soon as possible.

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