The Chancellor recently announced that the temporary increase in the Annual Investment Allowance (AIA) for expenditure on plant and machinery has been extended to 31 December 2021.
New VAT rules for the construction sector are finally due to come into effect this March which will impact on accounting for VAT for transactions.
At this time of year we think about New Year’s resolutions and pension planning could be a great way. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April.
Diary of main tax events for November / December 2020: 1/12/20 Corporation tax for year to 28/02/2020 unless quarterly instalments apply
Where possible taxpayers should “Gift Aid” any payments to charity to provide additional benefit to the charity. Higher rate taxpayers obtain additional tax relief on the grossed up amount donated.
For example, where an individual makes a £20 cash donation to charity the charity is able to reclaim a further £5 from HMRC making a gross gift of £25. Where the individual is a 40% higher rate taxpayer he or she is able to claim a further £5 tax relief under self-assessment, reducing the net cost of their donation to £15.
Note that the donor is required to make a declaration that they are a UK taxpayer and those that have not suffered sufficient UK tax to support the Gift Aid amount will taxed on the shortfall.
Remember that Gift Aid does not just apply to gifts of cash. Many charity shops will now sell donated items on your behalf and are able to treat the sale proceeds as Gift Aided donations. It is also possible to gift quoted securities and land and buildings to charity and claim Gift Aid on the market value
Whilst it is not yet fully known what will happen, 31 December 2020 marks the end of the Brexit transition period for UK businesses.
Have you thought about your Christmas gifts for employees yet? Remember that certain gifts to staff at Christmas are also tax free if structured correctly. Employers are allowed to provide their directors and employees with certain “trivial” benefits in kind tax free.
With more of us working from home there is good news from HMRC that employees can now make a claim for tax relief to cover some of their costs while they are working from home.
HMRC have announced that they will be imposing penalties of up to 100% of the amounts over claimed CJRS, SEISS and “eat out to help out” grants, on businesses during the coronavirus pandemic so make sure that your claims are correct.
An employee’s reference pay will depend upon whether or not they were on the payroll and subject to an RTI submission for 2019/20 on or before 19 March 2020. Where that is the case their reference pay will be that used under previous furlough claims.
We now have further details of the operation of the extension of Coronavirus Job Retention Scheme “furlough” grant that will apply from 1 November 2020 through to the end of March 2021.
Have you thought about a virtual Christmas party for your business? This year, all face to face meetings and events have been replaced by virtual meetings and events
Please see below for the diary of main tax events November/December 2020. As always, if you need help to reach these deadlines
The government will provide a voucher up to £5,000 that covers up to two-thirds of the cost of energy efficiency and low carbon heat improvements to your home. See which improvements are included in the scheme below.
If you sold your property after 6 April 2020 you must report and pay Capital Gains Tax within 30 days of selling property in the UK. You may have to pay interest and a penalty if you do not report gains on property within the time limit.
2018/19 tax returns can be amended by the taxpayer up until 31 January 2021. Where the omitted property income or gain relates to earlier tax years the taxpayer should consider disclosing using HMRC’s let property campaign.
In the March 2021 Budget, it was announced that CGT Entrepreneurs’ relief (ER) was replaced by CGT Business Asset Disposal relief (BADR) for disposals on or after 11 March 2020.
Those taxpayers who may have difficulty paying the tax due under self-assessment on 31 January 2021 can agree more time to pay with HMRC provided the amount outstanding is no more than £30,000.
You may have seen in the newspapers that Airbnb will share data with HMRC about the earnings of hosts (those who let out property) on its UK platform in the years 2017/18 and 2018/19.
A further update again for those who are self-employed – the next self-employed income support grant will increase from 55% to 80% of average profits – up to £7,500, covering November 2020 to January 2021. This is a new announcement made yesterday by the Chancellor.
Good news for the self-employed – the government announced yesterday it will increase support over the coming months with a Support Scheme Grant Extension. Please read below for more information.