Covid Payment Self Assessment Reminder

HMRC has recently reminded individuals to declare any Covid 19 payments they've received in their self assessment tax return.

This article will discuss the importance of declaring any Covid 19 funds you have received and guide how to do so.

We'll also explore the biggest lessons businesses can learn from the pandemic, as well as how you can start rebuilding now you’re in the aftermath.

HMRC’s Covid 19 self assessment tax return

HMRC is reminding every self assessment customer to include any Covid 19 payments they’ve received in their tax return for the 2021 to 2022 fiscal year.

HMRC reported that, “Approximately 2.9 million individuals have benefited from at least one SEISS payment up to 5 April 2022; these funds are taxable and must be declared on returns by 31 January 2023.”

The SEISS system and remittance periods during the 2021 to 2022 financial year were:

• SEISS 4: 22th April 2021 up to 1 June 2021

• SEISS 5: 29th July 2021 to 30th September 2021

And, those who have been self employed, in a partnership or running a business may need to include other Covid 19 assistance they've received on their taxes if they had any during the same period.

You'll need to include these on your tax return if you're:

• Self employed

• In a partnership

• A business

Myrtle Lloyd, the Head of Customer Services at HMRC, said: “We aim to assist customers in getting their tax returns precisely from the start. There is access to guidance and instructional videos online to aid individuals with their Self Assessments.”

Help and support are offered on GOV.UK for those filling out their Self Assessment tax returns and a series of videos available on YouTube. You can also use the HMRC app to pay Self Assessment taxes.

Other payment options include:

• Paying via PAYE tax code (this is subject to eligibility)

• Paying via online banking

Those who can't settle their tax liability can access the aid and counsel attainable on GOV.UK. HMRC could lend a helping hand by establishing an inexpensive payment scheme called Time to Pay.

It’s best to do this electronically. Visit GOV.UK for more facts. All Self Assessment clients must be on guard against swindlers emailing, telephoning or texting claiming to be from HMRC.

Scams include those threatening detention for tax evasion and those proffering a tax rebate. These contacts should raise suspicions, and HMRC encourages customers to be cautious and search for 'HMRC scams' on GOV.UK.

HMRC insists that customers never reveal their HMRC login credentials as someone may use them to steal from the customer or submit a false claim using their name.

Critical insights on self assessments

If you’re self employed or in a partnership and received any form of coronavirus monetary support, you’ll have to declare it on your self assessment tax return.

If you’re self-employed:

• Fill out form SA103S
  If your tax affairs are uncomplicated and your income was beneath the VAT brink (£85,000) for the tax year.
  

• The form SA103F can be used
  If your annual receipts were above the VAT limit for that year.

Business lessons learned from the Covid 19 pandemic

The pandemic was make or break for many small businesses and startups. It’s often said that the biggest lessons are learned in the toughest times. So, what has the pandemic taught us, and how can we carry those through to our future business plans?

Lesson 1: have the right talent on hand

You’re only as good as the people you surround yourself with. In short, your team is make or break for your business, tough times just make it clearer. Businesses with the right resources, skills, and personnel in place before the pandemic hit were able to pivot more quickly and effectively than those without. They continued operations and created new services and products to meet the needs of a changing marketplace. Having the right talent to draw upon in times of crisis is invaluable.

But how can you do that? It’s best to prioritise variety in your team building. Focus on employing a wide range of skills and expertise, from technical and operational personnel to marketing and communications experts.

But, we get it, talent is pricey. If you’re unable to build out the full team you’d like, it’s worth having flexible staff who can move between departments, depending on where their skills are needed most. Alternatively, freelancers and contractors can be beneficial if you need a specific set of skills for a short period.

Lesson 2: Have a defined workflow

Tidy processes = smooth sailing. A clear workflow helps streamline operations and help to make sure that everyone is on the same page.

Each team member should understand their roles and responsibilities and how they fit into the larger scheme. A well defined workflow also helps avoid bottlenecks, which can be especially damaging during periods of uncertainty. Defining your workflow allows you to plan, anticipate potential issues, and find solutions before they become a problem.

During the pandemic, businesses with a clearly defined workflow were able to respond better to customer needs. But why? When everyone knows their role and the processes that need to be followed, teams can take action more quickly and efficiently. This not only helps with customer satisfaction but also boosts employee morale and ensures that everyone works together in the most effective manner possible.

If done correctly, having a well defined workflow can provide your business with the stability it needs to weather any storm.

Lesson 3: Communicate an opportunity, not an obstacle

When the Covid 19 pandemic began to spread worldwide, it became clear that many businesses would need to adjust quickly. While it might be easy to focus on the potential obstacles, smart business owners understood that there were also opportunities to be seized.

Businesses needed to communicate these opportunities to remain successful during this time. Instead of simply focusing on the negatives, they recognised the potential growth areas and found ways to capitalise on them. This included taking advantage of changing customer needs, offering new services, or even expanding into new markets.

So, the lesson here is to lead with opportunity. You should communicate with your teams often, explain changes, and provide direction and support.

Lesson 5: Don’t let failure be an option

In times of crisis, staying agile and prepared to adjust as needed is essential. It’s important not to allow fear of failure to keep you from taking risks and trying new approaches. Have faith that there is always a way forward, and don’t get stuck in old ways of doing things.

A growth mindset is crucial; don’t let the fear of failure stop you from growing and improving. Instead, you should include crisis management into your strategies. Don’t just consider your best case scenarios - it’s far more helpful to think about the worst. That way, you have steps ready if those bad things do happen.

Rebuilding your startup after a crisis

1. Assess the financial damage

The first step in rebuilding your business is to assess the financial damage. This includes assessing the financial impact of lost sales, reduced income, higher operating costs, and other losses.

Begin with the quantitative data. If your financial statements—such as income and expenditure or cash flow statements—are outdated, getting them up to speed will be useful.

Afterwards, you can contrast them with the prior year's statistics to assess how much your business has been impacted.

Even though only a few entrepreneurs have acknowledged profiting from the pandemic, 3% as recorded by NFIB, the harm might not be as serious as anticipated.

2. Map out your business plan

The Covid 19 pandemic has changed how small businesses operate. Any future crises will likely have a similar effect. So, it’s a good time to take a second look at your existing business plan and adjust it accordingly.

Consider how you can adjust your strategy to accommodate new consumer demands and changes in the market.

When assessing your company's plan and framework, be aware of what your business can do well and where it may be lacking.

Reflect on previous strategies and brainstorm ways to change or refine them to stay competitive. You should make sure that your objectives are achievable in the present circumstances.

Evaluate what new products or services you could offer, how to best use technology, and how to market yourself in this new environment.

3. Consider if you need funds to recover

Depending on the extent of the damage caused you may need additional funding to help your startup recover.

Exploring the various financing options available to you is important. You should consider whether you may be eligible for grants, loans, or other forms of support from the government.

When it comes to funding your small business during this time of restoration from Covid 19, there are a number of potential solutions. The Small Business Administration (SBA) offers loans that could be useful in this situation.

The Paycheck Protection Program, for instance, is created to give financial support to startups with difficulty protecting their staff.

And, Economic Injury Disaster Loans may provide short term financing if you need capital for something other than staff retention.

4. Revamp your budget

Once you’ve assessed the damage and identified any additional funding needs, you’ll need to create a new budget. This’ll ensure you have enough money to cover expenses and fund any new investments needed to rebuild your business.

As part of your recovery, you need to understand what costs to prioritise and where to cut back to maximise revenue.

The goal here is to decrease any overspending and make your business expenses as efficient as possible. This way, when the opportunity for expansion presents itself, you can capitalise on it.

5. Strategise a timeline for rebuilding

Once you have a plan, it’s important to set a timeline for rebuilding your business. This will help keep you focused and motivated while giving you a sense of progress as you rebuild your business.

Be sure to break down tasks into manageable chunks and determine short term milestones you want to achieve. This’ll give you a clear path forward and help make sure you stay on track with your rebuilding efforts.

To sum up

The pandemic has been very challenging for businesses around the world. With HMRC's self assessment reminder to declare Covid 19 payments, you need to know the rules and regulations surrounding them.

You should start prioritising and understanding the best ways to protect your business during crisis and how to rebuild in the aftermath.

With our tailored insights and tips, you can make the most of these challenging times, and future proof your business.

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