HLAS

The Treasury normally issue a bundle of tax consultation documents on Budget Day. This year however they chose to delay the publication until 3 weeks after the Budget. We were expecting the consultation documents to include major changes to CGT and IHT, but it would appear that these have yet again been delayed. The Treasury have accepted a number of recommendations by the Office of Tax Simplification (OTS) on simplifying IHT reporting. From 1 January 2022 over 90 per cent of non-taxpaying estates each year will no longer have to complete IHT forms for deaths when probate is required. The [...]

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. [...]

In the Budget on 3rd March the Chancellor announced a new 130% tax relief for expenditure on new plant and machinery incurred between 1 April 2021 and 31 March 2023. It turns out that this new tax relief is only available to limited companies and the latest Finance Bill reveals a nasty sting in the tail when the equipment is sold, as the clawback on disposal is potentially at the same 130% rate. So, if a new item of plant cost £100,000 the company would be able to deduct £130,000 in arriving at taxable profits thus saving £24,700 in corporation [...]

The Supreme Court has ruled that drivers for the ride hailing App Uber are workers not self-employed individuals and hence are entitled to holiday pay, pension rights and the right to be paid the national minimum wage. This case will have implications for other workers in the "gig" economy and may also have a bearing on the tax status of such workers. HMRC will certainly be taking an interest in the Supreme Court ruling. Note that tax law doesn’t necessarily follow employment law, but the boundaries are becoming increasingly blurred making it difficult to determine an individual's employment status with [...]

The "off-payroll" working rules that apply to certain workers supplying their services to clients via their own personal service companies start from 6 April 2021. Under this new regime end user businesses will be required to determine whether that individual would have been treated as an employee or not if directly engaged. This will be a significant additional administrative burden on the large and medium-sized businesses to whom the new rules apply. This is a complex area based on different decisions by the courts and HMRC suggest that end user organisations use the CEST (Check Employment Status for Tax) online [...]

Over half a million pounds awarded to expand work programmes to help more people gain in demand sector-specific skills has been announced. Two regions will benefit to expand the delivery of the construction skills bootcamps, helping more people to gain vital skills in demand from employers. The funding will focus on developing test models that can be scaled to other areas. Skills bootcamps offer free, flexible courses lasting up to 16 weeks covering areas including construction, digital and technical. The courses are open to adults aged 19 and over and provide a chance to learn sector-specific skills and offer a [...]

Below is our weekly roundup of changes to government support information generally and for businesses, employers and the self-employed. Please contact us if you need help. HMRC Update - financial support schemes available HMRC have published their latest information about financial support schemes available, including the VAT deferral new payment scheme and the Coronavirus Job Retention Scheme (CJRS). VAT deferral – apply now to spread your payments The VAT deferral new payment scheme is open for all businesses who deferred VAT due between 20 March and 30 June 2020 and still have payments to make, or who are unable to [...]

If you run your own payroll, it is time to look at the end of year payroll tasks for the current year and key changes affecting payroll for 2021-22. HMRC have updated their webpage on annual reporting and tasks needed before 5 April 2021. This covers sending your final payroll report, updating employee payroll records, updating payroll software, issuing P60s and reporting expenses and benefits. See: https://www.gov.uk/payroll-annual-reporting HMRC have issued their guidance on P9X: Tax codes, to assist in understanding which PAYE tax codes to change, how to change them and which codes to carry forward ready for the new [...]

As we head towards 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.  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 [...]