By Katie COVID-19 • Covid-19 Hub • Tax Advice • Tax News 0 Comments

Deferral of VAT payments due to Coronavirus

Deferral of VAT payments due to Coronavirus:

If you deferred VAT payments due between 20 March and 30 June 2020 and still have payments to make, you can:

  • pay the deferred VAT in full, on or before 31 March 2021
  • join the VAT deferral new payment scheme – the online service is open between 23 February and 21 June 2021
  • contact HMRC on Telephone: 0800 024 1222 by 30 June if you need extra help to pay

You may be charged interest or a penalty if you do not:

  • pay the deferred VAT in full by 31 March 2021
  • opt into the new payment scheme by 21 June 2021
  • agree extra help to pay with HMRC by 30 June 2021

You can follow the link here to pay your VAT bill

If you want to join the new scheme

The VAT deferral new payment scheme will be open from 23 February up to and including 21 June 2021.

If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you’ll be invited to join the new payment scheme later in March 2021.

The new scheme lets you:

  • pay your deferred VAT in equal instalments, interest free
  • choose the number of instalments, from 2 to 11 (depending on when you join)

To use the online service, you must:

  • join the scheme yourself, your agent cannot do this for you
  • still have deferred VAT to pay
  • be up to date with your VAT returns
  • join by 21 June 2021
  • pay the first instalment when you join
  • pay your instalments by Direct Debit (if want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)

If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.

Instalment options available to you

The month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.

The table below sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

If you join by: Number of instalments available to you:
19 March 2021 11
21 April 2021 10
19 May 2021 9
21 June 2021 8

You can find out more on the GOV.UK website here

Need more information?

Do you need more guidance on the defferal of VAT payments? Have you been affected by the Coronavirus? We offer a wide range of services which are unique to your business and are here for you. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

Our fantastic team at A&C Chartered Accountants are here to help.

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    By Katie Tax Advice • Tax News 0 Comments

    Subsidised meals for employees

    An employer may provide subsidised or free meals for its staff tax-free. Employer subsidised meals must be:
    –  Available to all staff.
    –  Made available either at a canteen or on the employer’s premises.

    ‘Meals’, include light refreshments.
    ‘Available to all staff’ means available to all staff who work at any particular workplace.
    – Meals may be provided by trolley service rather than from a kitchen in the workplace.
    – Relief does not apply if any staff are excluded. For example, there would be no relief for meals provided in an exclusive director only dining room.

    This tax relief is separate to and independent of the tax relief for Staff parties & Annual Functions or for Subsistence, claimed as part of business travel.
    If the qualifying conditions for subsidised meals are not met, it may be possible to claim relief under the Staff Parties provisions, otherwise, the meals will be taxable benefits of employment and reported on form P11D.

    Practicalities
    – It is possible for a one-person company to claim the relief.
    – If all employees have to work from home, it is possible that the relief can apply per employee per home workplace.
    For example, in the case of a one-person company, where the director works at home:
    – An agreement is made to provide staff lunch.
    – The company may then reimburse the director’s costs of lunch.
    – The director is expected to retain receipts and complete an expense claim form in respect of the expenses (on an actual basis).
    –  Provided that these costs are reasonable and are paid in accordance with the legislation, the expense may potentially be agreed as a Flat-rate allowance with HMRC.
    – It is advised to write into the employer’s PAYE office in order for HMRC to formally approve the flat rate to be reimbursed.
    – If a flat-rate allowance is approved this reduces record keeping requirements.
    – If HMRC does not approve the arrangement and the director in this example has failed to claim the actual amount spent, or does not have receipts to back it up, it is most probable that HMRC would raise a PAYE assessment on the employer.

    Alternatively, a company and director may have an agreement that the director charges the company rent for use of home as a workplace.
    – The provision of subsidised meals may be an additional service that is incorporated into that home working rental agreement at a fixed weekly cost.
    – The director will be required to declare rental income and claim back expenses under Self Assessment.

    Restrictions
    Directors and employees who receive rent or an allowance for Working from home may not claim the £1,000 Trading & Property Allowance due to the restriction that the allowance cannot be claimed if any payment is received by an individual’s employer (or the employer of their spouse or partner).

    Need more information?

    Do you need more guidance on the subject matter of subsidised meals?

    We offer a wide range of services unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the hospitality sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

    Our fantastic team at A&C Chartered Accountants are here to help.

    Contact us below

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      By Katie Tax Advice • Tax News 0 Comments

      European property owners face higher tax bills

      European property owners face higher tax bills

      Now that the UK has finally left the EU some taxpayers will start to see additional tax costs. One example is where UK residents own holiday homes in EU countries that they rent out for part of the year.

      Owners of EU rental properties may now be required to pay more tax in those countries, having previously benefited from a lower rate of tax for EU nationals. Those renting out Spanish properties for example will see the rate of tax they pay in Spain increase from 19% to 24%. There would be double tax credit relief for the overseas tax suffered against the UK tax liability on the rental income, but those who pay UK tax at 20% will see their overall tax bill increase as a result. The UK leaving the EU may also have the effect of increasing the amount of capital taxes and social security taxes payable by property owners.

      The property tax rules vary from country to country, so contact us if you are likely to be affected by these changes.

      Need more information?

      Do you have a European property and need tax help? We offer a wide range of services which are unique to your business and work with clients all over the world. Our team of chartered accountants have a wealth of experience in a broad range of sectors, including property and construction. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

      Our fantastic team at A&C Chartered Accountants are here to help.

      Contact us below

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        By Katie Tax Advice • Tax News 0 Comments

        Diary of main tax events February/March 2021

        Please see below for the diary of main tax events February/March 2021

        Date What’s Due
         

        01/02

        		 Corporation tax payment for year to 30/4/20 (unless quarterly instalments apply)
         

        19/02

        		 PAYE & NIC deductions, and CIS return and tax, for month to 5/02/21 (due 22/02 if you pay electronically)
         

        01/03

        		  

        Corporation tax payment for year to 31/5/20 (unless quarterly instalments apply)
        02/03 5% penalty imposed on 2019/20 income tax, CGT, class 2 and 4 NIC still unpaid at this date unless a payment plan has been agreed with HMRC
         

        19/03

        		 PAYE & NIC deductions, and CIS return and tax, for month to 5/03/21 (due 22/03 if you pay electronically)

        Need more information?

        Do you need further guidance on the diary of main tax events February/March 2021? We offer a wide range of services which are unique to your business and our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property and are here to help. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

        Our fantastic team at A&C Chartered Accountants are here to help.

        Contact us below

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          By Katie Tax Advice • Tax News • Wealth Planning 0 Comments

          Possible changes to capital taxes

          Possible changes to capital taxes:

          The Office of Tax Simplification (OTS) have been asked by the Treasury to review both Inheritance Tax (IHT) and Capital Gains Tax (CGT) recently which again suggests there could be changes to those taxes that may require pre-emptive planning action.

          WILL CGT RATES GO UP?

          The OTS report highlighted the mismatch between CGT and income tax rates which currently encourages taxpayers to prefer to take profits as capital rather than income. This potential opportunity has been addressed recently in the case of company liquidations where there is now a targeted anti-avoidance rule. There has also been increased scrutiny of share for share exchanges and company share buy backs by HMRC. Both of these transactions, if properly structured, can currently be taxed as capital gains instead of income.

          The CGT annual exempt amount is currently £12,300 which is considered a very generous de minimis. It is important that taxpayers do not need to report trivial disposals of capital assets but perhaps we will need to get used to a more modest limit going forward. Consider making use of the current generous limit whilst it is still there.

          A possible change that has featured in a couple of OTS reports recently concerns the treatment of property passing on death. Although the value of the property is subject to IHT, there is currently no CGT and also a tax free uplift to market value for CGT purposes.

          The OTS recommendation is that the value for CGT purposes should be the deceased person’s base cost. Although there would still be no CGT to pay on death, the reduced base cost would mean a larger gain and CGT liability on subsequent sale.

          We are hoping that the current business asset disposal relief that provides business owners with a 10% CGT rate on disposals will continue to apply as this encourages entrepreneurs to build successful businesses.

          POSSIBLE INHERITANCE TAX CHANGES

          As reported in an earlier newsletter, the OTS suggested simplifying IHT on lifetime gifts including reducing the period of potential exemption from 7 to 5 years. Such a change would mean that the donor would only be required to survive for 5 years following a gift for the transfer to be exempt from IHT.

          The OTS also suggested that the conditions for Business Property Relief might be tightened up by aligning the rules with the definition of a trading company for CGT. This relief currently provides 100% relief on the transfer of shares in an unquoted company. The suggested change would mean that more transfers of shares would potentially be liable to inheritance tax and may require a careful review of your plans if you are looking to pass on your business.

          Need more information?

          Do you need help with capital taxes? We offer a wide range of services which are unique to your business and our team of chartered accountants have a wealth of experience in a broad range of sectors. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

          Our fantastic team at A&C Chartered Accountants are here to help.

          Contact us below

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            By Katie Tax Advice • Tax News 0 Comments

            Is pension tax relief under the spotlight?

            One area where the Chancellor could raise a substantial amount of tax would be to restrict higher rate tax relief on pension contributions.

            There have been recent consultations with the pensions industry and it has been suggested that the government top up might be increased to 30% but with no further tax relief. That would continue to encourage people to save for their own pension but the better off would get less tax relief.  The pension rules continue to be complex and this may be announced as a simplification measure.

            If you have spare cash that you are considering investing in your pension you might want to consider bringing that investment decision forward.

            Need more information?

            Do you need further guidance on pension tax relief? We have a dedicated pensions team who offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

            Our fantastic team at A&C Chartered Accountants are here to help.

            Contact us below

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              By Katie Business News • Tax Advice • Tax News • Wealth Planning 0 Comments

              Rishi Sunak’s Budget day is 3 March 2021

              There has been a lot of speculation on what will be in Rishi Sunak’s second Budget in early March and whether there is any tax planning that you should consider before then.

              The government will have to start paying down the massive £2 trillion of borrowings at some stage. Increasing tax rates would send the wrong message when the government is trying to stimulate economic recovery.

              What the Chancellor is more likely to do is abolish or restrict some of the generous tax reliefs that we have got used to taking advantage of. That would have the effect of raising tax revenue without increasing headline rates.

              Although likely to be unpopular with Conservative party voters and backbenchers, it is possible that the Chancellor will target pension tax relief and capital taxes in his Budget. The changes may well be announced as a “simplification” of the rules but that often hides tax raising measures in the small print!

              Those buying property might also want to speed up those transactions if they can as the beneficial stamp duty land tax rates are scheduled increase from 1 April 2021.

              Listen out in the Budget as the chancellor might possibly announce an extension of the SDLT relief to support the property sector for a few more months.

              Another bit of good news to listen out for would be yet further extensions in the CJRS furlough and SEISS grant schemes. These grant schemes are currently scheduled to end on 30 April and it would be nice to get a bit more notice this time

              Need more information?

              If you need help with anything from the budget, please get in touch with us. We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

              Our fantastic team at A&C Chartered Accountants are here to help.

              Contact us below

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                By Katie Tax Advice • Tax News 0 Comments

                Self Assessment customers will not receive a penalty if they file by 28.02

                HMRC has announced Self Assessment customers will not receive a penalty for their late online tax return if they file by 28.02.21

                HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible. However, HM Revenue and Customs’ Chief Executive Jim Harra has announced Self Assessment customers will not receive a penalty for their late online tax return if they file by 28 February 2021.

                Normally, late filing penalties are applied to all returns filed after the 31 January deadline. Those penalties are cancelled if the customer has a reasonable excuse for filing late. However, this year HMRC is not issuing late filing penalties for a month to help taxpayers and agents who are unable to meet the deadline. Late filing penalties will not be issued for online tax returns received by 28 February.

                Taxpayers are still obliged to pay their bill by 31 January. Interest will be charged from 1 February on any outstanding liabilities. Customers can pay online, or via their bank, or by post before they file. More information on how to pay is at GOV.UK.

                Need more information?

                Do you need help with your Self Assessment tax return? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

                Our fantastic team at A&C Chartered Accountants are here to help.

                Contact us below

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                  By Katie Tax Advice • Tax News 0 Comments

                  Diary of main tax events for January / February 2021

                  Please see below for the diary of main tax events for January / February 2021.

                   

                  Date What’s Due
                  1/01 Corporation tax payment for year to 31/3/20 (unless quarterly instalments apply)
                  19/01 PAYE & NIC deductions, and CIS return and tax, for month to 5/01/21 (due 22/01 if you pay electronically)
                  31/01 Deadline for Self-Assessment tax return for 2019/20 if filed online. Also the due date for 2019/20 balancing payment and 50% payment on account of 2020/21 tax.

                   

                  Note that if this liability is no more than £30,000 you can agree with HMRC to spread over 12 months
                  1/02 Corporation tax payment for year to 30/4/20 (unless quarterly instalments apply)
                  19/02 PAYE & NIC deductions, and CIS return and tax, for month to 5/02/21 (due 22/02 if you pay electronically)

                  Need more information?

                  Do you need more help with the main tax events for January / February 2021. We offer a wide range of services which are unique to your businesses who are just getting going! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

                  Our fantastic team at A&C Chartered Accountants are here to help.

                  Contact us below

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