Don't Lose Your 2021/22 Personal Allowance

For every £2 that your adjusted net income exceeds £100,000 the £12,570 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.

The restriction applies between £100,000 and £125,140 adjusted net income. 

International Women’s Day 2022

International Women's Day (IWD) takes place on 8 March annually. It is a global day celebrating the social, economic, cultural and political achievements of women.

The day also marks a call to action for accelerating gender parity. The IWD 2022 theme is #BreakTheBias.

Get help and guidance on how to plan (https://www.internationalwomensday.com/Resources) and IWD 2022 (https://www.internationalwomensday.com/Events) activity and how to support the #BreakTheBias campaign theme.

VAT Rates For Hospitality Sector Due to Increase from 1 April

Early in the COVID-19 pandemic, the Chancellor reduced the rates of VAT for the leisure and hospitality sector to just 5%. That reduced rate applied from 15 July 2020 until 30 September 2021 when the rate was increased to the current 12.5%. However, the rate is scheduled to revert to the normal 20% rate from 1 April 2022.

The businesses affected by the temporary rate reduction are those

• supplying catering services including restaurants and takeaways
• operating hotels and providing holiday accommodation and
• operating leisure attractions such as zoos and theme parks

Businesses should listen to the Chancellor’s Spring Statement on 23 March in case he announces an extension of the 12.5% rate.

If there is a change announced on 23 March, there will only be a limited amount of time to implement changes to prices and VAT accounting.

For businesses using the VAT Flat Rate Scheme, the flat rate percentages will revert to the pre 15 July 2020 amounts if the VAT rate reverts to 20% from 1 April 2022.

4th March 2022 – Hillmans Weekly Update

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

• Last chance for pre-April tax planning?
• One month until Making Tax Digital (MTD) for VAT becomes law!
• What is Working Capital Finance?
• Digital Security by Design: Technology Access Programme

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 great weekend.

Stay safe and well.

Cheers,

Steve

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

One month until Making Tax Digital (MTD) for VAT becomes law!

Making Tax Digital for VAT becomes mandatory for all VAT registered businesses from 1 April 2022

From 1 April 2022, all VAT registered businesses must file digitally through Making Tax Digital, regardless of turnover.

We can sign you up to MTD, although you will be responsible for meeting your VAT obligations. Those who do not join Making Tax Digital for VAT may be charged a penalty by HMRC for failure to do so.

What is Working Capital Finance?

Working capital finance solutions offer businesses the opportunity to improve cash flow. The world of commercial finance and asset based lending (ABL) is complex and expansive with products, terminology and contractual interpretation varying from lender-to-lender.

The Benefits of arranging Working Capital are:

• Up to 90% of outstanding invoice value can be advanced within 24 hours;
• Flexible lending - funding increases in line with your growth (UK and Export);
• Confidentiality - lenders can offer a completely confidential service - your customers need not know you have a facility in place;
• Lenders allow you to manage your funding at all times;
• Sector-specific finance is often available;
• Structured ABL - funding for management buy-outs/management buy-ins and
• Trade Finance & Supply Chain Finance Solutions.

Specialists in this area can advise on:

• Invoice Finance - an effective way of quickly accessing a proportion of the value (up to 90%) of your invoices. Effectively a business ‘sells’ its invoices to the lender in return for accessing cash at the point products and services are sold. Specific sector based offerings are available, as is the ability to arrange finance for selected invoices only
• Structured ABL - generate a higher level of funding by unlocking the maximum value tied up in the combined assets within your business, including Debtors, Inventory, Plant & Machinery and Property. Additional forms of funding can be structured in addition to this, such as top up loans in order to drive growth
• Trade Finance - supply chain finance with various options, enabling the purchasing of goods from overseas where you are otherwise unable to obtain credit from suppliers.

Typically you will need to ensure your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need up to date projections before an expert will consider your application.

Please talk to us about finance, we have working capital finance partners who have many years of experience and success in advising businesses across a wide range of sectors in obtaining working capital finance solutions.

Last chance for pre-April tax planning?

The new tax year starts 6 April 2022, so you have one month to consider your options, once we pass this date the majority of the tax planning options for Income Tax and Capital Gains Tax purposes will cease unless actioned before the 6 April.

Do you fall into any of these categories?

• You have or are thinking about a change in your personal status (single, married, separating, joining or dissolving a civil partnership).
• You claim Child Benefit and the income of either parent is likely to exceed £50,000 for the first time during tax year 2021-22;
• Your annual income is approaching or above £100,000;
• You have not yet topped up your pension contributions for tax year 2021-22;
• You are self-employed with a 31 March 2022 year-end;
• You are self-employed and are thinking about the purchase of equipment or vehicles; and
• You are the director and/or shareholder of a limited company and have not yet considered voting final dividends or bonuses for 2021-22.

If you do we can help you discuss your options ahead of the 6 April deadline!

The above list is not comprehensive, and we specialise in helping clients with all taxes including PAYE, NIC, VAT, Corporation, Capital Gains and Income tax. Please contact us for further advice.