August 2020

Technical and Client Update

In this issue

New Coronavirus Hub

Self-Employment Income Support Scheme – the service to claim the second grant is now open

More details on hospitality VAT reduction

VAT treatment of deposits

Interaction with VAT Flat Rate Scheme

Second home buyers and Buy-To-Let landlords welcome SDLT cut

Reporting property gains within 30 days

Rumours of CGT increases

New online service to improve Lasting Powers of Attorney (LPAs)

Trust Registration Service

Returning from furlough

New Apprentice

New Coronavirus Hub

Throughout the Coronavirus pandemic we have been updating our Coronavirus Hub webpage with the latest updates issued by HM Revenue & Customs (HMRC) in relation to the financial support and initiatives available.

We have now updated the Hub splitting the news updates into the relevant sections for Businesses, Individuals, CJRS, SEISS etc. We hope you will find this page useful; should you have any questions or concerns please contact a member of the team.

We will continue to update the hub with the latest developments so please check back regularly. Alternatively you can follow us on our social media channels below:

Coronavirus Hub Contact Us

Self-Employment Income Support Scheme – the service to claim the second grant is now open

If you're self-employed or a member of a partnership and your business has been adversely affected by Coronavirus (COVID-19), on or after 14 July 2020, use this scheme if you're eligible to claim the grant. You must make your claim for the second grant on or before 19 October 2020. Claims for the first grant are now closed.

Who can claim

You can make a claim even if you did not make a claim for the first grant if your business has been adversely affected on or after 14 July 2020.

You must also meet all other eligibility criteria.

You should not claim the grant if you’re a limited company or operating a trade through a trust.

What you will need

You will need your:

  • Self Assessment Unique Taxpayer Reference (UTR) – if you do not have this find out how to get your lost UTR
  • National Insurance number – if you do not have this find out how to get your lost National Insurance number
  • Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
  • UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
    • bank account number
    • sort code
    • name on the account
    • your address linked to your bank account

You must make the claim yourself. You must not ask a tax agent or adviser to claim on your behalf as this will trigger a fraud alert, which will delay your payment.

Please click here for further information or click here to start your claim.

More details on hospitality VAT reduction

When the Chancellor announced a temporary cut in the rate of VAT for the hospitality sector and attractions in his Summer Statement on 8 July there were a number of areas that needed clarification.

The reduction applies to supplies made between 15 July 2020 and 12 January 2021. HMRC have now set out more details of which supplies will attract the 5% temporary rate as well as the impact on invoicing, deposits and the flat rate scheme.

What does the 5% temporary VAT rate apply to?

The temporary 5% rate applies to the following supplies, but is not an exhaustive list:

  • Catering, including hot takeaway food
  • Accommodation in hotels, guest houses and similar places
  • Tourist attractions such as theme parks, zoos, theatres and cinemas

Note that as far as catering is concerned, the 5% rate only applies to food and non-alcoholic drinks. The 20% rate continues to apply to alcoholic drinks.

Please contact us if you are unsure as to whether the 5% rate applies to any of your supplies.

VAT treatment of deposits

It is fairly common, particularly in the summer holidays, to pay a deposit when booking a hotel or self-catering accommodation but how should the deposit be accounted for?

HMRC have confirmed that the hotel has the option of charging VAT according to the ‘basic tax point’ (dates of the stay) rather than the ‘actual tax point’ (invoice/payment dates).

For example where the customer paid a non-refundable £300 deposit in February 2020 for a £1000 holiday in Cornwall in August, using the actual tax point, the hotel would account for 20% VAT on the deposit received in February 2020 and 5% on the balance payable after 15 July 2020.  The hotel could choose to use the basic tax point rule which would mean that the 5% rate would apply to the entire cost of the stay and make an adjustment for the VAT already accounted for.

Please contact us if you need advice on dealing with the invoicing or accounting for such transactions.

Interaction with VAT Flat Rate Scheme

Small businesses with turnover below £150,000 may join the VAT flat rate scheme which makes their VAT accounting much simpler as they merely pay HMRC a percentage of their VAT inclusive turnover.

The temporary reduction in the rate of VAT from 20% to 5% reduces the flat rate percentages for affected businesses as set out:

Type of Business

15 July 2020 to 12 Jan 2021

From 13 Jan 2021

Catering services including restaurants and takeaways



Hotel or accommodation






Note that to use the flat rate percentage for pubs the turnover must be predominantly “wet sales”.

Second home buyers and Buy-To-Let landlords welcome SDLT cut

Although the temporary increase in the Stamp Duty Land Tax (SDLT) threshold to £500,000 was aimed at those buying their main residence, it also benefits those buying a second or subsequent property where there is a 3% supplementary charge.

Thus, the rate of SDLT on a second home costing up to £500,000 is now 3%. Previously, the rate was 3% up to £125,000, then 5% up to £250,000 and then 8% up to £825,000. So the SDLT on a second home costing £400,000 is now £12,000 compared to £22,000 if the purchase had completed before 8 July 2020. 

Note that there are different thresholds and rates of Land and Buildings Transaction Tax for properties located in Scotland and Wales.

Further information on these changes were detailed in our July newsletter. The 2020/21 tax rate card has been updated to reflect these changes. Please download your copy below.

Tax Rates 2020/21

Reporting property gains within 30 days

Since 6 April 2020 where UK residential property is disposed of (property that has been your own home throughout ownership is exempt), the resulting capital gain needs to be reported and the capital gains tax paid within 30 days of completion of the disposal.

There have been a number of teething problems with the new online reporting system and HMRC stated that there would be no penalties imposed for late returns, provided the returns were submitted by 31 July 2020. Taxpayers need to obtain a Government Gateway account and apply for a CGT or property reference number to report disposals, although they can authorise their accountant to report the disposals on their behalf.

Therefore if a Government Gateway account does not exist for that taxpayer it is important to create one online; ideally in advance of the completion of the sale of the property so there is sufficient time for us as accountants, if requested, to be authorised to report on behalf of clients.

Currently only the first disposal may be reported using the online reporting system with any subsequent disposals being reported using a paper return. We have been told that the new system will be fully functional shortly.

Rumours of CGT increases

There has been a lot of speculation in the Press that the Chancellor may introduce radical changes to capital gains tax to start to repay the substantial Government borrowings to support businesses and employees affected by the coronavirus pandemic.

It has been suggested that the current £12,300 CGT annual exemption will be reduced and the rates aligned with the rates of income tax. It has also been suggested that the capital gains uplift on death may be abolished following recommendations by the Office of Tax Simplification and the House of Commons Treasury Select Committee.

The Treasury Committee has recently launched a new inquiry called ‘Tax after coronavirus’. That inquiry will consider different ways of raising taxes, in particular a thorough review of UK tax reliefs which has also been recommended by the Public Accounts Committee.

The Chancellor has also hinted that there may be radical changes to the way that the self-employed and directors of family companies may be taxed in future.

New online service to improve Lasting Powers of Attorney (LPAs)

People managing their loved ones’ affairs will find it easier to safeguard their finances and wellbeing after a new online service launched on 17 July 2020, which will be available for all LPAs registered from that date.

The new digital ‘use a lasting power of attorney’ tool will help those acting as an attorney to contact organisations like banks and healthcare providers more easily. This will improve the speed with which they can make important decisions, such as those related to their loved ones’ care or property. It also replaces a paper-based system which delays important decisions and will maintain safeguards to protect elderly and vulnerable from abuse.

If you have any questions relating to the above please contact a member of our Trust and Estate Support Services team.

Trust Registration Service

Increase in the registration of trusts

The Trust Registration Service (TRS) was introduced in 2017, requiring the trustees of all tax reporting trusts to register with HM Revenue & Customs to accord with regulations set out in the 4th Money Laundering Directive.

As a result of the 5th Money Laundering Directive the number of trusts that need to register with HMRC will be increasing from March 2022 as all express trusts, whether they have tax reporting or not, will need to register by then. Fortunately, HMRC have recently succumbed to pressure and identified certain such trusts that will now not need to comply with these changes in reporting.

The express trusts that will no longer have to register include:

  • Pension scheme trusts
  • Life policy trusts
  • Pilot trusts holding less than £100
  • Trusts for joint ownership of property
  • Trusts created on death wound up within two years of death.

Reporting changes in trusts

HMRC’s long awaited online facility for updating trusts’ details on TRS is now available to trustees and their advisers. There is not only an obligation for trustees to update TRS for certain changes within their trust but to access TRS once a year whether there have been changes or not. Trustees can access the facility via HMRC’s Government Gateway.  They can also authorise, via the Government Gateway, the trust’s professional advisers to access TRS online on their behalf. 

If you are a trustee and need advice on registering your Trust, either now or in the future, or require assistance in updating your trust’s details, please do contact one of our Trust and Estate Support Services team at

Returning from furlough

Bringing your employees back from furlough is not a straightforward process.

As furloughed employees begin to return to work, business owners and managers need to consider both the practical and emotional aspects of returning to “normal”. The impact of the Covid-19 pandemic has been unprecedented. After several weeks of lockdown and social distancing, some employees may be fearful of commuting or sharing an office space with other people. Others may be living with a vulnerable or high-risk individual.

Managers need to talk to their team members before they return to work to understand their personal situation and to allay any concerns. The key to successfully returning furloughed employees to work is listening to them and communicating with them.

Action plans should be put in place before furloughed employees return to work. Employees should be engaged and the management team should involve them in creating plans to get everyone back up and running in the new normal. Return to work plans should include practical aspects such as how social distancing can continue to be observed as well as logistical and operational requirements.

Employers should also check any agreements they have with trade unions or employee representatives, to see if they need to enter into any formal consultation.

In some cases, employees may not want to return to work because they are worried about catching Coronavirus or perhaps they have issues around childcare etc.

If this happens, take the time to listen to the concerns of the particular employee(s) and take reasonable steps such as offering flexible working arrangements or agreeing some temporary leave if the individual(s) are unable to work for a period of time.

If the employee(s) still do not want to go back to work, they may be able to take some time off as holiday or unpaid leave, although the employer doesn’t have to agree to this. Guidance on how to manage this type of situation is freely available on  

Returning to work after furlough is going to be a sensitive time for everyone involved. Employees are likely to be nervous but if managers take the right steps and communicate regularly with their teams, things should go smoothly.

New Apprentice

We are pleased to announce that Joel Brierley has joined Humphrey & Co as our latest Apprentice. Joel will complete his AAT Level 3 in September and will be continuing with Level 4 to achieve his Accounting Technician qualification. Joel will be working with the Dental Team for Partner Greg Penfold. We welcome Joel to the firm and wish him every success with his studies.