As part of 2020’s commitment to its members by providing online training for accountants in practice, we have provided a Business News Update for our members.
The latest data from the ONS shows that 8 in 10 adults have the COVID-19 antibodies helping their bodies fight the disease and for people over 50 that figure rises to over 9 in 10. Last week we saw further government announcements regarding the easing of lockdown restrictions, and they announced that from 16 August, fully vaccinated individuals and under 18s will no longer need to self-isolate if they are identified as a close contact of someone with Covid-19 or returning from an amber listed country.
Monthly gross domestic product (GDP) grew by 0.8% between April and May 2021 but remained 3.1% below its level in February 2020, which was the most recent month not affected by the Pandemic. The rise in GDP was led by a month-on-month rise of 0.9% in services, although this sector remained 3.4% below its February 2020 level.
The accommodation and food service activities sector contributed 0.87 percentage points to the month-on-month growth in services, with output growing by 37.1% from April; this was driven by growth in food and beverage service activities, which grew by 34.0%, as coronavirus restrictions were eased.
Monthly production grew by 0.8% between April and May 2021 leaving it 2.6% below its February 2020 level; the monthly growth was led by the electricity, gas, steam and air conditioning supply sector, as cold weather and low wind speeds contributed to high demand for gas production in May.
Monthly construction declined by 0.8% between April and May 2021 leaving it 0.3% above its February 2020 level.
Overall it seems the UK is now starting to “bounce-back” and as restrictions ease further we expect this growth to continue.
More details on New Company Loss Carry Back Rules
HMRC have updated their guidance on claiming relief for company trading losses to take account of the extended carry back announced in the Spring Budget and now legislated in the Finance Act 2021. The guidance sets out the details required by HMRC where a company is making a claim for loss relief in advance of submitting its CT600 corporation tax return, where the loss is no more than £200,000.
Temporary extension to carry back of trade losses
In the Budget 2021, the Chancellor announced a temporary extension to the carry back of trading losses from one year to 3 years, for losses up to £2,000,000 for accounting periods ending between 1 April 2020 and 31 March 2022. Losses must be set against profits of most recent years first before carry back to earlier years.
There is no change to the current one-year unlimited carry back of trade losses, however, for the extended relief, the amount of loss that can be carried back to the earlier 2 years of the extended period is capped for each of those 2 years. This is a cap of £2,000,000 of losses for all relevant accounting periods ending in the period 1 April 2020 to 31 March 2021 (financial year 2020).
Groups will be subject to a group cap of £2,000,000 for each relevant period.
Extended loss carry back claims will need to be made in a return, however, claims below a de minimis limit of £200,000 may be made outside a return. This means that any stand-alone or group company with losses capable of providing relief up to a maximum of £200,000 may make a claim in respect of a relevant accounting period without having to wait to submit its company tax return.
Make a de minimis claim
If you want to make a de minimis claim outside the company tax return, you can send a claim submission to HMRC.
You will need to give relevant information such as:
- company name
- agent code (if applicable)
- start and end dates of loss making accounting period
- amount of loss
- dates of accounting periods to carry the loss back to and the relevant amounts
- management accounts as a PDF if a tax return has not been completed for the loss-making accounting period
UK Transition – Keep your business moving
New rules apply to things like travel and doing business with Europe. Use the Brexit checker to get a personalised list of actions for you, your business and your family.
Check what you need to do differently if you are:
- importing goods from the EU
- exporting goods to the EU
- moving goods to or from Northern Ireland
- providing services to EU countries
- travelling to the EU
Click here for more details about the C19 resources and updates available to 2020 Members.