Below I have summarised all the main tax related updates we have seen this week.
• Making Tax Digital (MTD)
• Defer Self-Assessment Payment on Account Due to Coronavirus
• How Different Circumstances Affect the Self-Employment Income Support Scheme
• Thinking of Starting a New Business? Read our New Business Kit
• Read our Fact Sheet on Universal Credit
If you have any queries regarding this week’s content, please do not hesitate to contact me.
I hope you have a great weekend!
Steven Hillman ACA
Tel: 01934 444100
Making Tax Digital (MTD)
The Government this week published an overview of Making Tax Digital. The big news is that all VAT registered businesses with VAT turnover below £85,000 will be required to follow MTD rules for returns filed on or after April 2022. That might sound a long way off, but we strongly recommend you taking action now so that you are well prepared for the changes. Please talk to us – we can help you go digital now and you will be amazed at the simplicity of Cloud software and how it will improve your business!
Making Tax Digital for VAT
VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.
If you are below the VAT threshold you can voluntarily join the Making Tax Digital service now.
VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return starting on or after April 2022.
Making Tax Digital for Income Tax
Self-employed businesses and landlords with business turnover above £10,000 will need to follow the rules for MTD for Income Tax from their next account period starting on or after 6 April 2023.
Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital service for Income Tax. If you are a self-employed business or landlord you can voluntarily use software to keep business records digitally and send Income Tax updates to HMRC instead of filing a Self-Assessment tax return.
Defer Self-Assessment Payment on Account Due to Coronavirus
You can choose how and when you delay making your second payment on account for the 2019 to 2020 tax year.
You have the option to defer your second payment on account if you are:
• registered in the UK for Self-Assessment and
• finding it difficult to make your second payment on account by 31 July 2020 due to the impact of coronavirus
You can still make the payment by 31 July 2020 as normal if you are able to do so.
The June 2020 Self-Assessment statements showed 31 January 2021 as the due date for paying the July 2020 Payment on Account. This is because HMRC updated their IT systems to prevent customers incurring late payment interest on any July 2020 Payment on Account paid between 1st August 2020 and 31 January 2021. The deferment has not been applied for all customers by HMRC and it remains optional.
HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021.
How Different Circumstances Affect the Self-Employment Income Support Scheme
The Government has updated its page on the Self-employment income support scheme. If you are self-employed or member of a partnership find out how your circumstances can affect your eligibility for the scheme.
The scheme is now closed for claims for the first grant.
The scheme has been extended. If you were eligible for the first grant and can confirm to HMRC that your business has been adversely affected on or after 14 July 2020, you will be able to make a claim for a second and final grant from 17 August 2020.
The scheme allows you to claim a second and final taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.
As with the first grant HMRC will contact you if you’re eligible.
HMRC will work out your eligibility for the second grant in the same way as the first grant.
You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant.
Thinking of Starting a New Business? Read our New Business Kit
If you’re considering starting your own business, we have produced a New Business Kit which highlights many of the practical points that you need to consider before trading begins.
You can download our New Business Kit for FREE from our website at: https://www.hillmans.co.uk/new-business-kit
We understand that starting your own business can be daunting. If you'd like some friendly business advice with no obligation, please get in touch for a FREE consultation.
Read our Fact Sheet on Universal Credit
With many individuals falling into Universal Credit and the world of State Benefits (as a result of the COVID-19 Pandemic), we thought it would be useful to write a fact sheet on Universal Credit for our clients.
You can download our fact sheet here: https://www.hillmans.co.uk/universal-credit
Full information on Universal Credit can be found at: http://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/how-much-youll-get/
We hope you find the information useful.