HLAS

Below is our weekly roundup of changes to government support information for businesses. Coronavirus Job Retention Scheme (CJRS). The CJRS has been extended until 30 April 2021. Claims for furlough days in January 2021 must be made by 15 February 2021. You can no longer submit claims for claim periods ending on or before 31 October 2020. HMRC has updated its examples to help calculate employee’s wages, National Insurance contributions and pension contributions if you are claiming through the CJRS. A new example has been added for calculating wages for different types of pension scheme. See:  https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages?utm_medium=email&utm_campaign=govuk-notifications&utm_source=05cd36c7-7e90-4622-ba90-f96aa529be12&utm_content=daily The guidance for [...]

It is well over a month since the implementation of a full border between the UK and the EU. Because of the pandemic, trade has been unusually down but what we can say is that there is a huge amount of additional red tape at the borders. This has particularly affected smaller businesses. The French authorities in Calais are now enforcing customs and single market rules more strictly and there have already been problems with fish, meat and cheese exports. The amount of red tape has an impact on smaller businesses attitude to trade with the EU and vice versa. [...]

Today the Government announced a new contract secured with Derby-based manufacturer for validated lateral flow antigen tests, ensuring supply for UK over coming months. Also this weekend the Government started offering all English businesses with over 50 employees’ workplace Covid testing. To register to order coronavirus tests for your employees see: https://www.gov.uk/get-workplace-coronavirus-tests We can now see a picture of the “New Normal” post initial vaccination emerging, with faster and more often testing for the workplace, when travelling and possibly attending events, voluntary social distancing and regular vaccinations against the virus and its new strains.  In the meantime let us have [...]

There has been a lot of speculation on what will be in Rishi Sunak’s second Budget in early March and whether there is any tax planning that you should consider before then. The government will have to start paying down the massive £2 trillion of borrowings at some stage. Increasing tax rates would send the wrong message when the government is trying to stimulate economic recovery. What the Chancellor is more likely to do is abolish or restrict some of the generous tax reliefs that we have got used to taking advantage of. That would have the effect of raising [...]

One area where the Chancellor could raise a substantial amount of tax would be to restrict higher rate tax relief on pension contributions. There have been recent consultations with the pensions industry and it has been suggested that the government top up might be increased to 30% but with no further tax relief. That would continue to encourage people to save for their own pension but the better off would get less tax relief.  The pension rules continue to be complex and this may be announced as a simplification measure. If you have spare cash that you are considering investing [...]

As reported in an earlier newsletter, the OTS suggested simplifying IHT on lifetime gifts including reducing the period of potential exemption from 7 to 5 years. Such a change would mean that the donor would only be required to survive for 5 years following a gift for the transfer to be exempt from IHT. The OTS also suggested that the conditions for Business Property Relief might be tightened up by aligning the rules with the definition of a trading company for CGT. This relief currently provides 100% relief on the transfer of shares in an unquoted company. The suggested change [...]

This time last year businesses were preparing for important changes to the rules where workers supply their services via their own personal service companies. The start date was then deferred from 6 April 2020 to 6 April 2021. The new rules are scheduled to apply to large and medium-sized businesses as defined by the Companies Act. Those businesses will be required to consider whether or not the worker would be regarded as an employee if directly engaged and so deduct tax and national insurance from payments as if they were an employee. This change does not apply where the end [...]

2019/20 income tax, CGT, class 2 and 4 NIC liabilities should have been paid by 31 January 2021 unless you have agreed a payment plan with HMRC. Note that if the balance is still unpaid at the end of February 2020, a 5% surcharge penalty is added in addition to the normal interest charge unless a payment plan has been agreed.

Now that the UK has finally left the EU some taxpayers will start to see additional tax costs. One example is where UK residents own holiday homes in EU countries that they rent out for part of the year. Owners of EU rental properties may now be required to pay more tax in those countries, having previously benefited from a lower rate of tax for EU nationals. Those renting out Spanish properties for example will see the rate of tax they pay in Spain increase from 19% to 24%. There would be double tax credit relief for the overseas tax [...]

The Office of Tax Simplification (OTS) have been asked by the Treasury to review both Inheritance Tax (IHT) and Capital Gains Tax (CGT) recently which again suggests there could be changes to those taxes that may require pre-emptive planning action. Will CGT rates go up? The OTS report highlighted the mismatch between CGT and income tax rates which currently encourages taxpayers to prefer to take profits as capital rather than income. This potential opportunity has been addressed recently in the case of company liquidations where there is now a targeted anti-avoidance rule. There has also been increased scrutiny of share [...]