30th April 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Business News Update
• No Employers NICs for a year if you hire ex-military staff
• Fourth round of SEISS grants have now opened up to the public
• Paying back VAT deferred due to coronavirus

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a good bank holiday weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Business News Update

This week, there is more positive news on the vaccination front with more than 13 million people now having had their second jab and approximately 34 million their first.

UK Economy set to grow at its fastest level ever!

The good news this week is that EY item Club has improved its estimate of the UK’s economic performance in 2021 – and forecasts a rebound in growth over the next two years and predicts a return to growth for summer 2021 with GDP to rise by 5% in 2021 and 6.5% in 2022. 

The bad news is that Government borrowing hits record high. The cost of dealing with Covid-19 has meant UK borrowing is at its highest level since the Second World War. Public sector borrowing reached £303 Billion in the year to March the Office for National Statistics have reported. This borrowing will need to be addressed at some point in the near future and now may be a good time to take some time and plan a business strategy to keep you and your business flexible and resilient to changes in government taxation policy. 

No Employers NICs for a year if you hire ex-military staff

National Insurance “Holiday” if You Hire Military Veterans

HMRC have provided guidance on this new incentive designed to encourage employers to take on military veterans. This relief is only available for 12 consecutive months from the veteran’s first day of civilian employment. This zero-rate can be applied up to the upper secondary threshold (£967 per week). This relief is available from 6 April 2021. For the 2021/22 tax year employers will need to pay the associated secondary Class 1 National Insurance contributions as normal and then claim it back retrospectively from April 2022 onwards. From April 2022 onwards, employers will be able to apply the relief in real time through PAYE.

Qualifying veterans

Employers will only be able to claim National Insurance contributions relief on the earnings of qualifying veterans. A person qualifies as a veteran if they have served at least one day in the regular armed forces. This includes anyone who has completed at least one day of basic training.

The relief is available to all employers of veterans regardless of when the veteran left the regular armed forces, providing they have not previously been employed in a civilian capacity.

Employments that qualify

Relief is available for any civilian employment. A civilian employment is one that is not part of the armed forces and includes employments with organisations that may have strong links to HM Armed Forces, such as the Ministry of Defence or NATO. Employment with a reserve organisation is not considered as civilian for the purpose of this relief and does not trigger the qualifying period (outlined below).

Employers can claim relief even if the employment starts before 6 April 2021 but will only be able to claim for the remaining 12 month qualifying period. The first day of employment will be the start date taken from the employment contract between the employer and the employee.

This 12 month period does not change if the employment finishes. This means that current and future employers can also claim this relief if they employ a veteran within their qualifying period. Subsequent employers must determine the first day of the veteran’s first civilian employment and confirm that the veteran is employed with their business during the qualifying period.

Fourth round of SEISS grants have now opened up to the public

The fourth round of Self-Employed Income Support Scheme (SEISS) grants have now opened up to the public.

The Self-Employed Income Support Scheme (SEISS) has been extended to September 2021and details of claims for the fourth grant have now been released. This fourth grant covers February, March and April 2021. There will then be a fifth grant covering May to September 2021. 

The latest grant allows the self-employed to claim 80% of their average profits for the period up to 2019/20, and is again limited to £2,500 a month.

There are lots of conditions that need to be satisfied such as being self-employed in 2019/20 and continuing to trade in 2020/21 or would be doing so if it the business had not been impacted by coronavirus.

In order to be able to make a successful claim the self-employed profits in 2019/20 must not exceed £50,000 and must be more than 50% of the individual’s total income. If that test is not met, then the same £50,000 and 50% tests are applied to average profits and total income over the four years (or shorter period) to 5 April 2020. This means that those who commenced trading in 2019/20 will now potentially be eligible for SEISS grants, having not previously qualified for the first three grants.

Although accountants cannot make the claim on a tax-payers behalf we can help you determine whether you are eligible and assist you with your claim if required.

HMRC will contact you to give you your personal claim date.

Conditions for the fifth grant will be linked to a reduction in business turnover. 

Self-employed individuals whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. We are still awaiting further details of the fifth grant calculation.

Paying back VAT deferred due to coronavirus

Information has been added to the HMRC website on penalties or interest that may be charged if you do not pay in full, or make an arrangement to pay, VAT payments deferred due to coronavirus, and how you may still be able to avoid these charges.

Below are details on how to pay VAT payments deferred between 20 March and 30 June 2020. You can pay now or join the VAT deferral new payment scheme.

If you deferred VAT payments due between 20 March 2020 and 30 June 2020 you can:

• pay the deferred VAT in full now
• join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
• contact HMRC on 0800 024 1222 by 30 June 2021 if you need extra help to pay

You may be charged a 5% penalty or interest if you do not pay in full or make an arrangement to pay by 30 June 2021.

Pay your deferred VAT in full

If you were unable to pay in full by 31 March 2021, you may still be able to avoid being charged penalties or interest by either:

• joining the new payment scheme by 21 June 2021
• paying your deferred VAT in full by 30 June 2021

Join the VAT deferral new payment scheme

The VAT deferral new payment scheme is open from 23 February 2021 up to and including 21 June 2021.

The new scheme lets you:

• pay your deferred VAT in equal instalments, interest free
• choose the number of instalments, from 2 to 11 (depending on when you join)

Instalment options available to you

When you decide to join the scheme will determine the maximum number of instalments that are available to you.

The following sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

If you join by         Number of instalments available to you

19 March 2021 11
21 April 2021         10
19 May 2021         9
21 June 2021         8

How to join

Before joining, you must:

• have your VAT registration number
• create your own Government Gateway account (if you do not already have one)
• submit any outstanding VAT returns from the last 4 years – otherwise you’ll not be able to join the scheme
• correct errors on your VAT returns as soon as possible
• make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

To use the online service, you must:

• join the scheme yourself, your agent cannot do this for you
• still have deferred VAT to pay
• be up to date with your VAT returns
• join by 21 June 2021
• pay the first instalment when you join
• pay your instalments by Direct Debit (if you want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)

Join the scheme now
See: Pay VAT deferred due to coronavirus (COVID-19) - GOV.UK (www.gov.uk)

23rd April 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Recovery Loan Scheme Update
• Restart Grant Scheme is Open
• Mortgage Guarantee Scheme
• Negotiating a new office lease

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a good weekend.

Stay safe and well.

Cheers,

Steve
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

The Mortgage Guarantee Scheme

This government has introduced a mortgage guarantee scheme. The scheme is open to new 95% mortgages until 31 December 2022, with participating lenders offering 95% mortgages under the government guarantee from 19 April 2021.

The idea is to support a new generation in realising home ownership. The scheme will increase the availability of 95% Loan-to-value mortgage products, enabling more households to access mortgages without the need for large deposits.

See:  The mortgage guarantee scheme - GOV.UK (www.gov.uk)

Negotiating a new office lease

In the current uncertain economic climate, signing up to a new office lease can be a tricky business.

One thing is certain at the moment and that is uncertainty. How much office space will you need in 3 to 5 years time? Well, that depends on whether people will want to work remotely or not. Do you need a desk for everyone or say, 50% of your team?

The current uncertain trading environment presents an opportunity for tenants to negotiate more favourable terms with their landlords. For example, the rent rate may only make sense if a certain number of people can be accommodated in particular premises. However, the current social distancing regulations may mean that there is room for less workstations or offices in the premises. This might give the tenant an opportunity to negotiate a lower rent on a staff headcount basis. Large landlords who are sufficiently capitalised to absorb the reduced cash flow may be willing to agree to slightly lower rents in order to get a tenant in place. The current market may also give businesses an opportunity to incorporate more favourable clauses into a lease agreement.

One of the key clauses to incorporate into your lease is a break clause. A break clause gives you the right to end the lease early by giving the landlord an agreed period of notice. This gives you some flexibility to terminate the lease if economic factors or personal circumstances impact your requirement for the premises in the future.

Another useful element to include is a sub-letting clause. This allows you to pass on some of the premises to another lessee if you don’t need all the space right now.

If your business becomes smaller in the future, you may want to be able to sub-let some of the premises in order to generate additional income that you can use to off-set against your lease payments.

Trying to secure a commercial lease with beneficial terms can be a challenging and complicated process. Getting legal advice from an experienced lawyer is a very good idea and it could save you money in the long term - for example if you need to terminate the lease early.

Restart Grant Scheme is Open

To support the recovery of the high street as the Government trading restrictions are relaxed, the Chancellor announced the one-off payment 'Restart Grant'. This grant replaces the local restrictions support grant from April 2021 onwards and supports businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors.

North Somerset Council has advised that it has contacted all eligible ‘rated’ businesses that passed a fraud check and that have historically been paid an LRSG (Closed) grant with instructions on how to apply for the Restart Grant via an online form.

The grants available are determined by the sector the business is in and its rateable value. The grants are:

• £2,667 for non-essential retail businesses with a rateable value of £15,000 or less
• £4,000 for non-essential retail businesses with a rateable value between £15,000 and £51,000
• £6,000 for non-essential retail businesses with a rateable value of £51,000 or above
• £8,000 for hospitality and leisure properties with a rateable value of £15,000 or less
• £12,000 for hospitality and leisure properties with a rateable value between £15,000 and £51,000
• £18,000 for hospitality and leisure properties with a rateable value of £51,000 or above.

An online claim form via the council website will also be available for any ’rated’ businesses that haven’t previously applied for an LRSG grant.

North Somerset Council will also continue to offer discretionary awards to non-rated businesses and anticipates opening claims for this scheme later this month.

The North Somerset Council’s dedicated business grants team can be contacted by phone on 01934 888 114 or email businessgrants@n-somerset.gov.uk.

Recovery Loan Scheme Update

The Recovery Loan Scheme supports access to finance for UK businesses as they grow and recover from the disruption of the COVID-19 pandemic.

Up to £10 million is available per business. The actual amount offered, and the terms are at the discretion of participating lenders.

The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.

The scheme is open until 31 December 2021, subject to review.

Loans are available through a network of accredited lenders, listed on the British Business Bank’s website.

Eligibility

You can apply for a loan if your business:

• is trading in the UK

You need to show that your business:

• would be viable were it not for the pandemic
• has been adversely impacted by the pandemic
• is not in collective insolvency proceedings (unless your business is in scope of the Northern Ireland Protocol in which case different eligibility rules may apply)

Business that received support under the earlier COVID-19 guaranteed loan schemes are still eligible to access finance under this scheme if they meet all other eligibility criteria.

Who cannot apply

Businesses from any sector can apply, except:

• banks, building societies, insurers and reinsurers (but not insurance brokers)
• public-sector bodies
• state-funded primary and secondary schools

What you can get

• term loans or overdrafts of between £25,001 and £10 million per business
• invoice or asset finance of between £1,000 and £10 million per business

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

How long the loan is for

The maximum length of the facility depends on the type of finance you apply for and will be:

• up to 3 years for overdrafts and invoice finance facilities
• up to 6 years for loans and asset finance facilities

How to apply

Find a lender accredited to offer Recovery Loans from the list on the British Business Bank website: Recovery Loan Scheme: current accredited lenders - British Business Bank (www.british-business-bank.co.uk)

16th April 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week. 

• Self-Employment Income Support Scheme (SEISS) Update

• 30-day Capital Gains Tax Reporting on Property Sales

• New Enhanced Loss Relief Rules May Result in Extra Tax Refunds

• Further easing of Covid restrictions from 12th April

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

 

I hope you have a good weekend.

 

Stay safe and well.

 

Kind regards,

 

Steve

 

Steven Hillman BSc (Hons) ACA

Chartered Accountant

Tel: 01934 444100

Self-Employment Income Support Scheme (SEISS) Update

HMRC has updated its guidance with information about the fourth SEISS grant. The online service to claim the fourth grant will be available from late April 2021. If you are eligible based on your tax returns, HMRC will contact you in mid-April to give you a date that you can make your claim from. It will be given to you either by email, letter or within the online service. You must make your claim on or before 1 June 2021.

How HMRC works out trading profits and non-trading income for the SEISS

HMRC will look at your trading profits and non-trading income on your Self-Assessment tax returns to check if you meet the eligibility criteria for the fourth grant. They also use your average trading profits to work out how much grant you will get.

See: Claim a grant through the Self-Employment Income Support Scheme - GOV.UK (www.gov.uk)

30-day Capital Gains Tax Reporting on Property Sales

From last April (6th April 2020), the government made a major change to Capital Gains Tax, whereby a UK resident who sells a residential property in the UK will have 30 days to tell HMRC and pay any Capital Gains Tax (CGT) owed.

HMRC introduced a new online service to allow taxpayers to report and pay any CGT owed.

A CGT report and accompanying payment of tax may be required where the taxpayer sells or otherwise dispose of:

- a property that they have not used as their main home;
- a holiday home;
- a property which has been let out for people to live in;
- a property that has been inherited and not used as a main home.

There is no requirement to make a report or make a payment of tax when:

- a legally binding contract for the sale was made before 6th April 2020;
- the individual satisfies the test for Private Residence Relief (generally a main residence);
- the sale was made to a spouse or civil partner;
- the gains (including any other chargeable residential property gains in the same tax year) are within the tax free allowance known as the annual exempt amount (£12,300 in 2021/22);
- the property is sold for a loss; or
- the property is outside the UK.

Subject to certain exceptions, where there has been a disposal of a residential property, payment on account of the CGT will be due on the filing date for the return, which is generally within 30 days of the day after the date the property sale is completed.

The payment on account required is the amount of CGT notionally chargeable at the filing date. This is the tax that would be due if, under the normal rules for calculating chargeable gains for a tax year, the tax year ended at the time the disposal is completed.

In calculating the amount, any unused allowable losses for capital gains purposes incurred by the time the disposal is completed can be used. Available reliefs and the annual exempt amount are applied in the normal way.

The amount of CGT payable on account is the amount after applying the applicable rate of tax to the net gain.

Since the 30-day payment window can make it difficult for some people to provide exact figures, HMRC allow for certain estimates and assumptions to be made. The taxpayer can make a correction once the exact figures are known, most probably when submitting their self-assessment tax return.

If the resulting amount is higher than the amount previously paid, the difference becomes payable to HMRC and interest may be due. If the amount is lower, the difference becomes repayable along with repayment interest from HMRC.

New Enhanced Loss Relief Rules May Result in Extra Tax Refunds

In the March Budget it was announced that the normal one year carry back for trading losses would be extended to three years. This means that many businesses that have made losses during the COVID-19 pandemic may be able to obtain a repayment of tax paid in that three-year period. This enhanced carry back applies to unincorporated businesses as well as limited companies and the details are set out in the latest Finance Bill.

For corporation tax purposes the loss-making accounting period must end between 1 April 2020 and 31 March 2022 to qualify for the three year carry back. For unincorporated businesses, the trading loss must be incurred in 2020/21 or 2021/22.

For example, if A.Villa Ltd incurred trading losses of £200,000 in year ended 31 December 2020 having made profits of £50,000 in year ended 31 December 2019 it would normally only be possible to relieve £50,000 of the losses.

The new temporary carry back rules would permit losses to be set against trading profits made in the years ended 31 December 2018 and then 31 December 2017 as well. If profits in those years were £150,000 or more then the company would be entitled to a £38,000 corporation tax refund (19% of £200,000).

Further easing of Covid restrictions from today - 12th April

Outdoor hospitality will be among those reopening today (12th April) in England next after the Prime Minister confirmed the roadmap is on track and planned easements can go ahead.

Further parts of the indoor economy and outdoor settings will reopen from 12 April, after data confirmed the government’s “four tests” for easing Covid restrictions had been met.

The Prime Minister last week continued to urge caution, with no changes to social contact rules and many restrictions still in place. Outdoor gatherings must still be limited to 6 people or 2 households, and you must not socialise indoors with anyone you do not live with or have not formed a support bubble with.

Confirmation Step 2 of the roadmap would proceed came after the measures were agreed at a “Covid O” meeting and discussed on a Cabinet call last Monday.

Before proceeding to this step, the government studied the latest data to assess the impact of the first step, which began when schools reopened on 8 March.

The assessment was based on four tests:

• The vaccine deployment programme continues successfully

• Evidence shows vaccines are sufficiently effective in reducing hospitalisations and deaths in those vaccinated.

• Infection rates do not risk a surge in hospitalisations which would put unsustainable pressure on the NHS.

• Our assessment of the risks is not fundamentally changed by new Variants of Concern.

As set out in the roadmap, around four weeks is required to see the impact in the data of the previous step.

The government also committed to provide a further weeks’ notice to businesses, provided through the update from the Prime Minister.

From today, additional premises will be able to reopen – with the rules on social contact applying. Indoor settings must only be visited alone or with household groups, with outdoor settings limited to either six people or two households.

This includes non-essential retail; personal care premises such as hairdressers, beauty and nail salons; and indoor leisure facilities such as gyms and spas (but not including saunas and steam rooms, which are due to open at Step 3).

Overnight stays away from home in England will be permitted and self-contained accommodation can also reopen, though must only be used by members of the same household or support bubble.

Public buildings such as libraries and community centres will also reopen.

The majority of outdoor settings and attractions can also reopen, including outdoor hospitality, zoos, theme parks, drive-in cinemas and drive-in performances events.

Hospitality venues will be able to open for outdoor service, with no requirement for a substantial meal to be served alongside alcohol, and no curfew. The requirement to eat and drink while seated will remain.

People should continue to work from home where they can and minimise domestic travel where they can. International holidays are still illegal.

The number of care home visitors will also increase to two per resident, and all children will be able to attend any indoor children’s activity, including sport, regardless of circumstance.

Parent and child groups of up to 15 people (not counting children aged under five years old) can restart indoors.

Funerals can continue with up to 30 attendees. Weddings, outdoor receptions, and commemorative events including wakes will be able to take place with up to 15 attendees (in premises that are permitted to open).

The government is also publishing an update on the 4 reviews established in the roadmap to determine what measures may be necessary from summer onwards.

See: Further easing of Covid restrictions confirmed for 12 April - GOV.UK (www.gov.uk)

9th April 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Recovery Loan Scheme Launches
• Start an Online Store
• New - The Restart Grant Scheme
• Partially exempt VAT registered businesses affected by coronavirus (COVID-19)

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a good weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Recovery Loan Scheme Launches

The Recovery Loan Scheme launched this week, which aims to ensure businesses continue to benefit from Government-guaranteed finance throughout 2021. Loans will include 80% government guarantee and interest rate cap.

With non-essential retail and outdoor hospitality reopening next week, the Government has tried to ensure that appropriate support is still available to businesses to protect jobs.

Businesses ranging from coffee shops and restaurants to hairdressers and gyms, can access loans varying in size from £25,000, up to a maximum of £10 million. Invoice and asset finance is available from £1,000.

See: https://www.gov.uk/guidance/recovery-loan-scheme

Start an Online Store

Given the current economic challenges, we've had a number of clients ask us how they can set-up an online store or website to start selling their products or services online to generate a new income stream. One popular option is www.shopify.co.uk.

Shopify is an e-commerce platform that provides businesses with the tools to create an online store. It is an incredibly popular platform and is used by over 1 million businesses worldwide.

Shopify provides a lot of flexibility in terms of products and services that you can sell - it allows digital as well as physical products to be sold on the platform.

The Shopify platform offers lots of useful tools and features. The online checkout page is customisable - you can add your company logo, colours and fonts so that everything fits with your firm’s branding. The system also supports international shipping functionality, if needed.

Shopify is a hosted solution, which means it runs on its own servers. Users don’t have to buy web hosting or install software. Businesses using Shopify pay a monthly fee to use the platform. As long as you have access to the internet you can manage your online store from anywhere.

Shopify offers a range of subscription packages for different sizes of business. Businesses can start off with a free 14-day trial to test the platform. In order to start selling products or services you need to sign up to a monthly plan. Basic Shopify starts at £23.48 per month. Users can have unlimited products, abandoned cart recovery and various other features. Upgrading to the Shopify package costs £63.95 per month and includes additional features such as reports, analytics and up to five staff accounts.

Finally, the Advanced package costs £242.04 per month and includes more advanced reporting, calculated shipping rates and more.

In addition to the monthly subscription fee, Shopify charges for any payment made through any payment provider other than Shopify Payments. The charges range from 2% on the Basic plan to 0.5% if you are on the Advanced plan. Shopify Payments accepts most major payment methods.

New - The Restart Grant Scheme

A New grant scheme launched last week: The Restart Grant scheme supports businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors with a one-off grant, to reopen safely as COVID-19 restrictions are lifted.

Eligible businesses in the non-essential retail sector may be entitled to a one-off cash grant of up to £6,000 from their local council.

See: Check if you're eligible for a coronavirus Restart Grant - GOV.UK (www.gov.uk)

Partially exempt VAT registered businesses affected by coronavirus (COVID-19)

There is an accelerated process for VAT registered businesses to request temporary alterations to their partial exemption methods (including combined methods) to reflect changes to their business practices because of the coronavirus (COVID-19) pandemic.

Businesses who make a mixture of taxable and exempt supplies can only recover input tax to the extent that it is used in making taxable supplies. Residual input tax (VAT incurred on purchases used to make both taxable and exempt supplies) must be apportioned using a fair and reasonable method to calculate the percentage which is recoverable.

The standard method, based on the value of taxable supplies made as a proportion of all supplies made by the business, is the default method. A Partial Exemption Special Method (PESM) may, however, be used if HMRC is satisfied that it would produce a fairer reflection of the use of residual input tax than the standard method. Proposed PESMs must be approved by HMRC before they can be used.

Businesses using the standard method may, in any given tax year, find that their actual deductible input tax differs significantly from that calculated based on the use of input tax in making taxable supplies. Where this difference exceeds £50,000, or 50% of the residual input tax and £25,000, they must account for the difference between the 2 amounts by applying the standard method override.

A special method override may be required when an existing PESM is found to be unfair. A business can serve a Special Method Override Notice on HMRC, or HMRC can serve one on the business.

HMRC will be using an accelerated process to make sure coronavirus-related changes to partial exemption methods are considered, and where appropriate, approved swiftly.

Requests for such changes should be sent to the email address: PESMcovid19@hmrc.gov.uk.

All PESM requests must be accompanied by a declaration that the method proposed is fair and reasonable. An example of the format this should take is available in appendix 1 of Partial Exemption (VAT Notice 706).

Where HMRC are satisfied that the aim of the proposal is to address coronavirus issues only, in order to facilitate a quick decision, HMRC will restrict its enquiries to how that proposal addresses those issues. Where there may be significant risk that the remainder of the existing method produces an overall result which is not fair and reasonable, further examination of that method will be considered.

HMRC will apply normal scrutiny to method requests where there is a risk the accelerated process is being used to increase recovery for businesses whose activities have not been directly affected by coronavirus.

See: https://www.gov.uk/government/publications/revenue-and-customs-brief-4-2021-partially-exempt-vat-registered-businesses-affected-by-coronavirus-covid-19/

1st April 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Finishing tax year 2020-21 and preparing for 2021-22
• Consultations Issued on Tax Day by Treasury
• More Details on the New Super-Deduction for Equipment
• Prepare for tax changes if you engage or supply contractors – Off-payroll working rules (IR35)

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

Just a courtesy note that our office will be closed for the Easter weekend, closing at 5pm on Thursday 1st April and reopening at 9am on Tuesday 6th April.

I hope you have a great Easter.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Finishing tax year 2020-21 and preparing for 2021-22

As we head into April now is the time to think about pre-tax year planning, doing the year end administration and filing the necessary forms to HMRC.

Time is running out to make the most of your tax allowances this year as the tax year ends on the 5th April 2021. The first step to making the most of your tax allowances can mean looking closely at your pension. UK residents under 75 can add money to a pension and receive tax relief on it. You’ll automatically get basic rate tax relief (currently 20%) paid into your pension by the government.

If you pay tax at a higher rate you could get up to a further 25%, but you will need to claim it by declaring any pension contributions you have made on your tax return.

The annual allowance is the maximum you can invest in your pension each year that would be eligible for tax relief. It is currently £40,000, or your entire income, whichever is the smaller and there are lifetime allowances to consider.

If you run a limited company then there are some actions you could consider such as dividend and salary planning, purchasing capital items to maximise capital allowances, research and development tax credits and a range of other matters.