Income tax roundup

Here’s our guide to the changes for 2021, including a personal allowance freeze and Covid-related exemptions Income tax rates remain unchanged but personal allowance will be frozen for five years Personal allowance will rise to £12,570 from April 2021. It will subsequently be frozen at this level until April 2026 and no longer adjusted for inflation. The income tax higher …

New VAT penalty regime

Reform of existing regime with a £200 points-based late submission penalty. The reforms will come into effect as follows: VAT taxpayers for accounting periods beginning on or after 1 April 2022 Income Tax Self Assessment (ITSA) Return for taxpayers with business or property income over £10,000 per year (who are required to submit digital quarterly updates through Making Tax Digital for ITSA) …

Extension to the Coronavirus Job Retention Scheme

An extended version of the CJRS provides further support for employees until the end of September In December, the CJRS scheme was extended to the end of April 2021 in anticipation of lockdown measures ending by around March. Due to the gradual lockdown lifting measures announced recently, chancellor Rishi Sunak has now announced a further extension of the Coronavirus Job …

More grants via the Self-employed Income Support Scheme

The latest round of grants for the SEISS has been announced, with more applicants potentially qualifying. Applications for the third grant for the Self-employed Income Support Scheme closed on 29 January 2021, with the details of the fourth grant slated for announcement on Budget day. The chancellor in fact went further in the Budget announcement that a fourth and fifth …

Corporation tax to rise – marginal rate relief returns

Small profit and main rates of CT make a come-back, along with marginal rate relief  The chancellor announced the return of the small profit rate and main rate of corporation tax from April 2023. The applicable corporation tax rates will be 19% and 25%. Businesses with profits of £50,000 or below would still only have to pay 19% under small …

VAT round-up

Temporary VAT rate reduction extended until September To support the most vulnerable businesses hit by the pandemic, chancellor Rishi Sunak announced the extension of the reduced rate of VAT of 5% to the hospitality sector, holiday accommodation and attractions until 30 September 2021. After this date, the VAT rate will be 12.5% to 31 March 2022, before reverting to the …

MTD for VAT: end of the soft-landing era

Systems must be compliant for MTD from 8 April The soft-landing period for Making Tax Digital for VAT is coming to an end for VAT periods starting on or after 1 April 2021. From this date your systems must use digital links for any transfer or exchange of data between software programs, products or applications used as functional compatible software, …

Don’t miss the 1 April tax payment deadline

If you benefited from HMRC’s filing extension, make sure you avoid the 5% penalty Around 1.8 million individuals benefited from a hard-fought campaign which encouraged HMRC not to charge a late filing penalty – provided that returns were submitted online by 28 February. HMRC has confirmed that the initial 5% late payment penalty on self-assessed tax won’t be charged if …

Employment Allowance set to continue

Businesses will not to have to pay employer’s NIC on the first £4,000, so take care when you claim! Organisations will continue to not have to pay employer national insurance contributions (NIC) on the first £4,000 of their annual bill. It had already been announced that, from 6 April, the allowance is available only where the Class 1 NIC bill …