By Sarah Wynne

The Kafkaesque problems with HMRC during Covid-19

As accountants work hard to help their clients through the pandemic, they find themselves trapped in a web of HMRC-related miscommunications and delays, writes Director of Wynne & Co Sarah Wynne.

As a profession, accountants have a unique insight into the pressures faced by business owners. During the pandemic we’ve gone above and beyond to keep our clients supported. We’ve helped them claim grants, understand changing rules, and generally navigate a route through what has been a make-or-break period for business.

We’ve seen clients struggling under huge stress, which we’ve experienced a great deal of ourselves. We’ve all pulled together, and HMRC has joined us in that effort. I’m not alone, however, in feeling they could have done more.

HMRC have been difficult to reach, pushed clients to the brink with delays, and expected accountants to take on additional tasks when they were already overstretched, often for no fee and with ever-changing rules.

We empathise – this is a trying time. But HMRC has given accountants no allowance for the difficulties our increased workload is creating. We were expected to rapidly adapt to furlough claims and payroll calculation changes with no agent support helpline.

As a firm, we’ve encountered a litany of blunders and miscommunications in our dealings with HMRC during the pandemic.

Accounting bodies asked HMRC for an extension to the tax return deadline of 31 January. However, they failed to act until six days prior to the deadline, by which time the work was mostly complete.

Our staff are showing mental and physical health issues due to stress, which was preventable. HMRC could have told us that we were going to have another month without penalty. Instead, we endured the worst January deadline I’ve ever seen in 21 years of accounting.

Among other demands, we were asked to advise certain clients the reasons why they were not eligible for SEISS, to reduce calls to HMRC. They claimed their staff were too busy to answer the phone themselves!

VAT and SA frustrations

We have a client for whom we have been trying to get a UTR for a 2019-20 tax return. We first applied online in December 2020, and got a submission receipt. HMRC lost the application, which we waited three months for them to even confirm. We have now been told they are expecting to look at this by June 2021 – pre-pandemic, this would have taken around ten days.

We lodged a VAT claim for another client during December 2020. HMRC denied receiving it. During April, we received confirmation that the repayment would be made – the client is now still owed £22k and it’s having a catastrophic cash flow effect for them.

HMRC are taking up to 56 working days to deal with VAT related correspondence. Clients are left in the lurch; we’re unaware if we should prepare VAT returns for them, or if there are potential penalties for late registration when the delay is HMRC’s fault.

We switched one of our clients onto quarterly VAT returns from annual. Despite receiving confirmation, we couldn’t submit anything. Nine months later that’s still the case. Meanwhile, the same client received a letter saying that because they have not made their monthly payments towards their annual VAT, they are being thrown off the scheme.

We have clients who HMRC have inexplicably stopped issuing VAT returns for. They don’t inform the client – we only find out when we go to file them. HMRC has informed us there’s an issue with the address and we’ve got to try and get that resolved. As the process doesn’t seem to work online, we have had to write to HMRC in paper form, and we still can’t seem to get them to make the corrections.

Delays in tax repayments have also hit our clients during a time of financial crisis. One client was due a £4,500 repayment when Covid was first affecting sole traders, without any help. HMRC held onto this for four months, despite numerous calls. We couldn’t charge this time to our struggling client, as it wasn’t his fault. Meanwhile the client couldn’t trade, and had no income whatsoever.

We eventually established that the issue was related to £100 that HMRC said our client owed from several years ago, which HMRC had never chased. Instead of just deducting the £100 and giving him the rest of the repayment, they held onto the whole lot.

The SEISS grants were a real challenge because HMRC didn’t give us the ability to claim them for clients. They made the client do it – and most of the time the client didn’t have the information they needed to make a claim at home.

No communication

When you phone HMRC you’re frequently told, “We can’t do that in our department”, “We can’t see this on our system”, and “We’re trying to work at home”. They’ve made no allowance for the fact that accountants have also had to work remotely.

We had to recruit an additional employee, who spends 80% of her time dealing with these issues (usually on hold). Because there’s no dedicated agent line for VAT, it’s not unusual for our team members to be on hold for 45 minutes before somebody even answers. When we eventually make contact, the problem is rarely resolved.

What would we like from HMRC?

A bit more consideration for us as a profession, and the pressures that we and our clients are under. We don’t want to whinge, because our clients have got it worse, but trying to get hold of HMRC to resolve issues has been a nightmare.

All these issues have hit us against a backdrop of having to deal with Brexit, the new domestic VAT reverse charge rules, and the extended IR35 rules. We are working hard to help our clients meet all of HMRC’s requirements, but we really need HMRC to meet us halfway.

It must be acknowledged that we have dealt with some incredibly helpful members of HMRC staff, who have themselves expressed frustrations over the difficulties with their own systems. Sometimes it’s a question of getting through to the right person. So, we have some sympathy for HMRC employees too!

An HMRC spokesperson commented:

“We’re doing all we can to offer the best possible service to our customers at this difficult time, whether it’s supporting them with their taxes or delivering the government’s support schemes we’re working hard to ensure they can access the help they need and have adapted to serving customers in the pandemic.

“Wait times for some of our services are longer than we would like, and we’re sorry about the inconvenience this causes to customers at busy times. We’re continuing to redesign our business to meet our customer demand needs in the most effective way, based on our available resource.”

Wynne & Co Expand as Catrin appointed Director

We’re all set for further growth following the promotion of accountant Catrin Burt to the role of Director.

Catrin has been with Wynne & Co for 6 years and has now gained her ACA Practising Certificate from the Institute of Chartered Accountants in England and Wales (ICAEW). This qualifies her to take a more senior role within the company, so she has been appointed Director, alongside the company’s founder and Managing Director, Sarah Wynne.

Having two directors will enable us to continue the steady growth we’ve pursued since starting life in 2012. Wynne & Co currently has eight staff (all women!) based across its two offices. Sarah and Catrin aim to provide ample opportunities for career progression within Wynne & Co, enabling them to retain talent and grow the company organically.

Sarah said:

“I’m excited at the prospects that are opened up by Catrin’s promotion. I’m hugely proud of what she has achieved over the past couple of years, and I’m really pleased for her and for us that she has now become a Director. I’m highly ambitious for Wynne & Co and having a second director opens up further opportunities for expansion. Training and development are one of our strengths and having Catrin in her new role enables us to train staff to a higher standard and give them opportunities to progress their careers within the firm.”

Catrin said:

“I’m really excited about the opportunities this is going to bring for me personally and for the firm. Achieving my ACA practising certificate enables me to progress further in a career I love, with a company I’m proud to be part of. Working at Wynne & Co is more than just a job that you forget about at the end of the day. I really care about doing a great job for my clients and want to make sure that they are well looked after. I’m also keen to help my colleagues progress in their careers, and my new role will help me to do that.”

Wynne and Co. Chartered Accountants

Covid-19 – Advice for businesses

We’ve put together a guide on the latest advice and support measures in place for businesses in this challenging time. We’ll update this post as measures change…

Updated: 23rd March 2020

Watch our video for Sarah’s 12 point plan on helping your business cope with Covid 19.

Looking for more information with the support measures that the Goverment’s announced? This is what we know so far:

Coronavirus Job Retention Scheme

Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were in employment on 28 February.

To claim under the scheme employers will need to:

  • designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation; and
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

While HMRC is working urgently to set up a system for reimbursement, we understand existing systems are not set up to facilitate payments to employers.

Business that need short-term cash flow support, may benefit from the VAT deferral announced below and may also be eligible to apply for a Coronavirus Business Interruption Loan.

VAT payments

The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.

The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.

Income Tax payments

Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

Universal credit

Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay.

HMRC Time to Pay

HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559.

Business Rates holidays and cash grants

No rates payable for the 2020-2021 tax year for any business in the retail, hospitality or leisure sectors.
In those sectors, if your rateable value is between £15K and £51k, you’ll also receive a cash grant of up to £25,000 per property.

Any business which gets small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000 (increased from £3,000 announced in the 11 March Budget).

The rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.

Coronavirus Business Interruption Loan Scheme

These should be available from Monday 23 March and are delivered by lenders that partner with the British Business Bank, including all the major banks. The lender receives a guarantee of 80% of the loan amount from the government.

They are available for UK-based businesses with turnover of no more than £45 million and can provide for a facility up to £5 million. The borrower remains liable for 100% of the debt.

No interest will be charged for the first 12 months.

You should be aware that normal bank lending criteria apply, it is not a loan from the government.  It may be difficult to get these loans and also take time, so its not a “quick fix”

Mortgage and rent holiday

Mortgage borrowers can apply for a three- month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don’t pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.

Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.

Insurance claims

Businesses that have cover for both pandemics and government-ordered closure should be covered. The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc., is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses should check the terms and conditions of their specific policy and contact their providers.

However we have spoken to commercial insurance brokers and been advised that the vast majority of customers do not have cover for this.

Statutory Sick Pay (SSP)

If you’re a director of a limited company with less than 250 employees, you can pay yourself two  weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP.

The government will refund £94 per week, maximum £188, to your company.

It will also refund SSP for staff of businesses with less than 250 employees  for up to two weeks.

 

Keep in touch with updates

Follow us on Facebook to keep in touch with our latest news, as advice is clarified or updated.

Merry Christmas!

From the whole team here at Wynne and Co we would like to thank you for your continued support and we look forward to working with you more in the coming year.

Christmas closures:

Carmarthen: Friday 21st December 12pm, re-opening at 9am on Wednesday 2nd January

Cross Hands: Thursday 20th December 5pm, re-opening at 9am on Wednesday 2nd January

We would like to take this opportunity to wish you a Merry Christmas and a very prosperous and healthy New Year.

It’s the little things…

Would you like a tax efficient way to give little perks to your employee’s? (or even yourself!)

Employers are allowed to provide “trivial benefits”, without having to report them on a P11D, and without having to pay any tax or national insurance on the cost. In fact, the expense is tax deductible for the employer, and you may be able to recover the VAT.

So what sort of things could you give?

  • Store gift cards
  • Wine
  • Hampers
  • Chocolate
  • Flowers

What are the conditions?

  • The trivial benefit must cost £50 (incl. VAT) or less
  • The benefit cannot be cash or a cash voucher
  • The benefit cannot be a reward for performance
  • The benefit cannot be provided as a term of their contract

This “trivial benefit” rule also applies to the directors of a company, but please note for close companies there is a limit of £300 for each director each tax year.

These benefits aren’t just related to Christmas though, you can provide them to employee’s for any occasion… birthdays, anniversaries, or just because the sun is shining that day!

If you would like more information about this, please get in touch with us and we’ll be happy to help!

Would you like to save yourself some time…?

We have signed up for some great new software called “Receipt Bank” and we are offering it to all Wynne and Co clients free of charge!

It’s a great tool to cut down your admin time, so you have more time for the things that really matter to you. Simply take a photo of your receipt, email it, scan it, or pull it down from the supplier, and it will upload the information straight in to Xero for you. It really is that simple!

We can provide complete Xero and Receipt Bank training, as well as ongoing support, so if this has peaked your interest – please get in touch to find out more.

Come and see us in Cross Hands!

Our Cross Hands office is officially open!

The office is manned full time by the same dedicated team who look after you in our Carmarthen office, rotating throughout the week, to make sure you have the same experienced staff, no matter which office you visit.

The office is open Monday – Friday, 9am – 5pm and our new address is:

4 Heol Bryngwili
Cross Hands
SA14 6LR

Please feel free to pop by and say hello.

Wynne and Co. Chartered Accountants

Congratulations Amy!!!!!!!

Amy celebrating success!

FANTASTIC NEWS!

We had some great news at Wynne and Co HQ on Friday when after three years of hard graft Amy had the results of her finals and she passed them all first time!!!

A huge congratulations to Amy on this achievement – with a little paperwork left to be done she should be a fully qualified Chartered Accountant before we know it!! We all enjoyed helping her celebrate and shed tears of pride after seeing all her hard work pay off.

After a well deserved holiday Amy will start properly developing her skills, working with clients in Carmarthen office on Mondays, Tuesdays and Fridays and Cross Hands on Wednesdays and Thursdays.

Sarah Wynne Shortlisted for Chwarae Teg Womenspire 2017 Award for Women in Business/Enterprise

Hi All!

I’m extremely proud to say I’ve made the shortlist for the Chwarae Teg Womenspire 2017 Award for Women in Business/Enterprise! 

The category is for women who have setup a business and in their words “bucked the trend” with regards scale and who also promote other women in business in Wales.

Anyone who has met me will already know that I believe the sky is the limit and I am doing my best to prove that women can have a successful business whilst also having a great family life and being totally committed to, and there for their children. You DO NOT have to chose between the two!

Do you know a women with a business idea?

Do you know a women who has a business idea but doesn’t know how to get started? Or who wants to grow their business? If so get them to ring me on 07811 394558 or email me sarahwynne@wynneandco.co.uk. I’d be happy to hear their idea and give any support I can.

Wondering where the future will take you?

Me too!  Could this be the face of the future of Wynne and Co?

One thing’s for sure my future will always involve helping people develop themselves and their businesses, whether its be giving financial/business advice, helping minimise their tax bills or just giving plain old moral support when cash flow is giving them sleepless nights or staff aren’t performing as well as they should.

I repeatedly hear the same issues and challenges from my clients and friends in business – you are not alone and if you think I have all of this sorted in my own company then you are mistaken.  At Wynne and Co we can work with you, becoming an extension to your team to help you through these struggles. Contact me if you want to grab a coffee and discuss how: sarahwynne@wynneandco.co.uk

Don’t have anyone to look after the kids whilst you come for a meeting with us?

So bring them with you!

Both Catrin and I have kids and are well used to the fun that is trying to have a conversation with the kids in the background.  We even have some toys to keep them occupied in the office.

 

And finally……..

A huge thank you to those who have supported me and to the ladies who I know nominated me for this award.  I will let you know how I get on.

Sarah