Anyone selling a residential property since April 2020 has had to report and pay their Capital Gains Tax to HMRC within 30 days of the sale completing.

Buried in the Budget documents was some welcome confirmation that company car tax rates and bands will be frozen from 2022 through to 2025.

The Budget documents confirm that the Recovery Loan Scheme to help businesses get back on their feet following the pandemic, will be extended until 30 June 2022.

A new temporary 50% business rates discount was announced for these sectors, in a bid to help their recovery after the pandemic, which will apply from April 2022 to March 2023, capped at £110,000 per business.

Following the consultation launched at the Spring 2021 Budget, the Chancellor confirmed that R&D tax reliefs will be reformed from April 2023.

The Chancellor confirmed that the current £1 million Annual Investment Allowance, which provides tax relief on the full cost of purchasing plant and machinery (and vans) for your business (whether new or second hand), will remain at that level through to March 2023.

This measure was also announced last month (see previous Tax Bulletin), alongside the NIC increase, in a bid to bring parity for limited company owners that often remunerate themselves with a low salary plus dividends.

The Budget documents confirm Rishi’s announcement last month that NIC will increase by 1.25% for both employees and employers from April 2022, with all wage levels over the NIC threshold affected.

In a bid to encourage those on lower incomes to work more without such a significant drop in their universal credit, the Chancellor announced a permanent reduction in the taper rate at which universal credit is withdrawn for every extra £1 earned, from the current 63% to 55%.

As already released to the media ahead of the Budget Speech, Rishi Sunak confirmed that the National Living Wage for employees aged 23 and over will increase from £8.91 to £9.50 from April 2022, an above inflation increase of 6.6%.

In a bid to level the playing field with business owners who take lower salaries and supplement their income with dividends which do not attract NIC, the government also announced an increase in dividend tax rates by 1.25% from April 2022.

In order to bring parity between employed and self-employed workers, it was confirmed that the 1.25% increase will also be applied to the Class 4 National Insurance rates paid by the self-employed (which includes partners in a partnership or LLP).

Alongside the increase to employee NIC rates, it was also announced that the 1.25% increase will also apply to employer NIC contributions, from April 2022.

The Prime Minister announced that in order to fund wide ranging reform to the health and social care sectors, it would be necessary to increase the rate of National Insurance paid by employees by 1.25% from April 2022.

With recent changes to Entrepreneurs Relief (now Business Asset Disposal Relief) many fear that the days are numbered for paying 10% tax when you sell your business.

Now that we’re into the full swing of preparing 2020/21 Self Assessment Tax Returns, we’ve had a number of clients query their tax bills, which include tax and NIC owed on SEISS grants.

As set out in our Tax News article, the fifth SEISS grant opens at the end of this month, but this time there are two levels of grant dependent on your reduction in turnover as a result of COVID-19.

Earlier this month, HM Revenue & Customs issued some guidance about the fifth, and potentially final, Self Employed Income Support Scheme grant which kicks off at the end of this month.

The Chancellor confirmed that there will be two further three-month grants for self-employed taxpayers once again set at 80% of past profits, and capped at £7.5k.

Almost a year ago, on the eve of the first lockdown, the Chancellor announced that businesses could defer their quarterly VAT liability falling due in April/May/June 2020 until the end of the tax year.

Every tax year the National Insurance and tax thresholds change, and we think carefully about the most tax efficient salary levels to recommend to company Directors.

Rishi Sunak certainly bigged up the new super-deduction in the Budget earlier this month, prompting many clients to get in touch to see how they can benefit from it.

It was confirmed in the Budget earlier this month that two further SEISS grants will be available to self-employed taxpayers whose businesses continue to be adversely affected by Coronavirus.

With the current Bounce Back and Coronavirus Business Interruption Loan Schemes due to end soon, a new 80% government backed Recovery Loan Scheme has been announced offering loans between £25k and £10 million to support businesses through the next stage of their recovery.

£5 billion has been pledged to fund new Restart Grants which provide a one-off cash grant of up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses in England.

The current business rates holiday for certain sectors including retail, hospitality and leisure has been extended to 30 June 2021, as expected, with a 2/3rds discount then applied for 9 months up until 31 March 2022, to allow businesses in these sectors time to recover.

n a bid to help businesses adversely affected by COVID, the usual rules that allow a business to carry back losses for one year have been amended to allow losses made in the 2020/21 and 2021/22 tax years to be carried back and offset against profits in the previous 3 years.

Alongside the freezing of the tax-free personal allowance and higher rate tax thresholds, the Chancellor also announced that the VAT registration threshold will be frozen at £85k for 3 years, while the Capital Gains Tax annual exemption of £12,300, the pensions Lifetime Allowance of £1,073,100, and the current Inheritance Tax thresholds will be frozen for 5 years until April 2026.

The current £500,000 threshold for Stamp Duty on residential properties that was due to end on 31 March 2021 has been extended to 30 June 2021. After this the usual threshold of £125,000 will be temporarily doubled to £250,000 for a further 3 months up until 30 September 2021.

The current much needed VAT cut to 5% for the hospitality and leisure sectors was due to end on 31 March 2021, but the Chancellor announced earlier today that it will be extended until 30 September 2021, after which it will be increased to 12.5% until 31 March 2022.

Rishi Sunak announced that from April 2021 until March 2023 a super-deduction will be offered to any companies that invest in new equipment, by allowing 130% of what they invest to qualify for tax relief (currently 100% but subject to limits).

In better news, the Coronavirus Job Retention Scheme has been extended to 30 September 2021, although businesses will need to contribute 10% of the 80% wages paid to furloughed workers in July, and 20% of their 80% wages in August and September 2021.

The Chancellor also announced that the new personal allowance of £12,570 which arrives in April 2021 will be frozen for 5 years until 2026.

Let’s start with the worst news first. In a bid to rebalance the books post COVID, Rishi Sunak announced a rise in the Corporation Tax rate to 25% from April 2023 which was higher than expected.

The government have yesterday launched a new loan scheme for small businesses which is simpler and quicker to access than the existing Coronavirus Business Interruption Loan Scheme (CBILS).

As part of a package of measures to assist businesses, the Chancellor announced £10,000 grants for businesses that qualify for Small Business Rates Relief.

The Coronavirus Self-Employment Income Support Scheme was announced back in March, and gives the self-employed a grant of up to £7,500 if their business has been affected by COVID-19.

The Job Retention Scheme allows for 80% of a furloughed employee’s wages to be reclaimed from HM Revenue & Customs, providing they are doing no work for the business.

HMRC will usually accept a small amount of incidental private use, for example stopping off for a sandwich on the way back from a business journey, but beyond that they are highly likely to challenge any recovery of VAT on the car’s purchase.

In last year’s Budget, the Chancellor announced the introduction of a new capital allowance for new commercial structures and buildings, known as the SBA.

Due to our continued growth, and with one of the team retiring, we’ve been on the lookout for another bookkeeper and a Payroll Manager to join our team.

Regular readers will know that the combination of a low salary and dividends is usually the most tax efficient way for a Director/shareholder to be paid by their company.

Most business owners will do some of their work from home, but what tax relief can they claim for this? An unincorporated taxpayer (i.e., a sole trader or partner in a partnership) may be able to claim a proportion of its costs for working from home for things like:

Changes to VAT on vouchers were introduced on 1 January 2019 for vouchers sold on or after that date.

Prior to this change, the sale of a voucher was treated as two separate supplies for VAT purposes; the supply of the physical voucher or gift card; and the underlying goods/services it can be exchanged for.

Buy-to-let landlords have been under attack in recent years with the 3% stamp duty surcharge, the restriction of tax relief for mortgage interest, and now changes to letting relief.

The Employment Allowance covers the first £3,000 pa of Employers National Insurance, and is currently available to all but the very smallest employers.

However, what if you instead employed your nanny through your company, by adding them to the company’s payroll?

In April 2017 the government introduced two new £1,000 per annum tax-free allowances in relation to property and trading income.

The Chancellor announced a new structures and buildings capital allowance, which will be set at a rate of 2% per annum, will apply to all newly constructed non-residential buildings and structures where construction works commenced on or after Budget Day.

It was announced that, with effect from April 2020, the current extension of private residence relief to periods where a private residence is let out (known as ‘letting relief’) will only apply where the owner is in shared occupancy with the tenant.

Following a call for evidence on the design of the UK VAT threshold (which is higher than most other countries), the government have decided to freeze the registration threshold at £85,000 until 2022. With Making Tax Digital for VAT arriving in April 2019, which only applies to VAT registered businesses with a turnover above the VAT registration threshold, this provides greater certainty.

From 6 April 2019, the minimum period that the conditions must be met to qualify for Entrepreneurs Relief will be extended from 12 months to 2 years.

In a measure designed to reduce tax leakage where multinational companies operate online platforms and pay little or no tax in the UK, a new 2% digital services tax will be levied on revenues from the UK market in relation to search engines, social media platforms, and online marketplaces.

In a bid to help independent retailers (shops, cafes etc) on our high streets, a one third business rates discount will be given on retail properties with a rateable value below £51,000 for a 2 year period, commencing April 2019.

While not referred to in the speech itself, the Budget document confirmed that the National Living Wage for workers aged 25 and over is set to increase from the current level of £7.83 per hour to £8.21 per hour from April 2019, an increase of almost 5%.

The Annual Investment Allowance allows businesses tax relief on 100% of qualifying expenditure on plant and equipment, and is currently set at £200,000 per annum.

When you are alone for days or weeks at a time, you eventually become drawn to people. Talking to randos is the norm. After a long time I could witness the sunrise. I could feel the sun rays falling on my body.

The Chancellor confirmed that the government’s target of reaching a tax-free Personal Allowance of £12,500 and a higher rate tax threshold of £50,000 by 2020 will be met one year early, with those amounts being introduced from April 2019.

With Making Tax Digital for VAT arriving in April 2019, we are holding a free seminar exploring the forthcoming changes and how your business will be affected.

Rental property owners that live in the property for a period of time may be able to mitigate their potential Capital Gains Tax liabilities on an eventual sale through careful planning.

Taper relief reduces the Inheritance Tax payable on gifts made during a taxpayer’s lifetime, providing they survive at least 3 years from making the gift.

We are pleased to report that Callum Andrews passed his final ACCA exams last month, and is now fully ACCA qualified.

The additional 3% surcharge rate of stamp duty land tax that applies on the purchase of a second property is notoriously hard to avoid.

Entrepreneurs’ Relief applies to the sale of business assets or shares in a trading company, reducing the Capital Gains Tax rate to 10% for qualifying disposals.

Due to our continued growth, and also to enable some role changes with existing staff, we’ve been on the lookout for another accountant and a Payroll Manager to join our team.

The transferrable marriage allowance arrived in 2015 but was widely considered to be a bit of a damp squib as very few couples could claim it and a separate claim needed to be made.

Many readers are probably blissfully unaware of the Corporation Tax quarterly payment regime, since this only applies to companies with annual profits in excess of £1.5 million.

With GDPR now live, we want to ensure that all of our clients are made aware of our privacy policy.

With company car tax based on CO2 emissions and the list price when new, company cars are rarely tax efficient for company owners, usually due to the type of cars they want to drive!

Most readers are probably familiar with the general block on reclaiming VAT on costs associated with entertaining customers or suppliers. But are there any exceptions?

As KRW continues to grow we have been on the lookout for another administrator to join the team.

Several clients have asked this question over the years, and for a very good reason. There is no VAT on wages, so surely recharging wages to another business is VAT-free too?

For a number of years now we have been offering our clients a pre-year-end tax planning meeting, and these are becoming increasingly popular.

There are many reasons to consider holding the shares in your trading company through a separate holding company, the main one being to safeguard retained profits.

Rent-a-room relief allows you to let out part of your home without any income tax liability, providing your rental income does not exceed £7,500 per annum.

By now all existing employers should be aware of Auto Enrolment and should have a qualifying scheme in place.

With the 31 January Self Assessment tax payment deadline looming, we often encounter clients that want to reduce their tax liabilities. But surely it’s too late now?

We all know that company car tax rarely makes it tax efficient to run a company car, but what about a company van? Are the rules the same?

Company car tax is based on the car’s list price when new, and its Co2 emissions, and with annual increases, the tax/NIC on a company car benefit can soon mount up.

As KRW continues to grow we are always on the lookout for talented individuals to join the team, so that we can continue to improve our service.