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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.