Budget 2021 Update
It’s an introduction only and should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary. The message from the Chancellor was that this is a Budget with three aims: protecting the jobs and livelihoods of the British people strengthening the public finances supporting an investment-led recovery You can read the individual measures and details of some of the numerous consultations below. Rates and allowances 2021/22 2020/2021 £ £ Income tax rates (non-dividend income) 0% lower rate tax – savings rate only Up to 5,000 Up to 5,000 20% basic rate tax 12,571 to 50,270 12,501 to 50,000 40% higher rate tax 50,271 to 150,000 50,001 to 150,000 45% additional rate tax Above 150,000 Above 150,000 Scottish income tax rates (non-dividend income) 19% starting rate tax 12,571 to 14,667 12,501 to 14,585 20% basic rate tax 14,668 to 25,296 14,586 to 25,158 21% intermediate rate tax 25,297 to 43,662 25,159 to 43,430 41% higher rate tax 43,663 to 150,000 43,431 to 150,000 46% top rate Above 150,000 Above 150,000 Personal allowance Personal allowance 12,570 12,500 Capital gains tax annual exempt amount (after personal allowance) These are frozen at £12,300 for individuals and £6,150 for trusts. Dividend allowance The tax-free dividend allowance is unchanged at £2,000. Corporation tax The corporation tax rate will remain at 19% but from April 2023 the applicable corporation tax rates will be 19% and 25%. Businesses with profits of £50,000 or below will still only have to pay 19% under the small profits rate. Grants – restart ‘Restart Grants’ are available in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses Grants – export The SME Brexit Support Fund grant provides up to £2,000 to help with training or professional advice. Enhanced capital allowances: super deduction This introduces increased reliefs for expenditure on plant and machinery. For qualifying expenditures incurred from 1 April 2021 up to and including 31 March 2023, companies can claim in the period of investment: a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main-rate writing-down allowances a first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances Annual investment allowance (AIA) Companies will be able to claim £1m as AIA for expenditure incurred from 1 January 2019 to 31 December 2021. The announcement was made in November and before the ‘super deduction’. Apprenticeship funding Apprenticeship incentive payments for employers will increase to £3,000 per new hire until September 2021. Making tax digital (MTD) There were no announcements on MTD except that the government will publish an evaluation on the introduction of MTD for VAT, expected on 23 March. VAT 2021/22 2020/21 £ £ VAT Standard rate 20% 20% Registration threshold 85,000 85,000 Deregistration threshold 83,000 83,000 The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2022. The reduced rate of VAT of 5% to the hospitality, holiday accommodation and attractions sector is extended until 30 September 2021. After this date, the VAT rate will be 12.5% to the end...
read moreCoronavirus support: Bounce Back Loans
Today the chancellor, Rishi Sunak has announced a new loan for smaller businesses needing a simpler, quicker solution. “Today, we’re announcing a new loan scheme. A simple, quick, easy solution for those in need of smaller loans. Businesses can apply for new Bounce Back Loans up to a maximum of £50,000, or 25% of turnover, with the government paying the interest for the first 12 months. We’ve been in close talks with the banks in recent days and these loans will be available from 9am next Monday. There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in. For most firms, loans should arrive within 24 hours of approval. And I have decided, for this specific scheme, that the government will support lending by guaranteeing 100% of the loan. We shouldn’t ask taxpayers to bear all the risk of lending almost unlimited sums to businesses who may have very little prospect of paying those loans back – and not necessarily because of coronavirus. So, I don’t think it’s right to provide 100% guarantees on all our schemes. Instead, the new Bounce Back Loans carefully target that extraordinary level of state support at those who need it most. And the £50,000 cap balances the risk to the taxpayer with the need to support our smallest businesses.” We’ll publish more information as the detail is...
read moreHow to claim – Coronavirus Job Retention Scheme
Coronavirus Job Retention Scheme Yesterday, HMRC released further details of how you can claim for your employees’ furloughed wages. If we are registered with HMRC as your PAYE agents we can make the claim on your behalf. What you’ll need to make a claim Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment. To claim, you will need: your employer PAYE reference number the number of employees being furloughed National Insurance Numbers for the employees you want to furlough Names of the employees you want to furlough Payroll/works number for the employees you want to furlough your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number the claim period (start and end date) amount claimed (per the minimum length of furloughing of 3 consecutive weeks) your bank account number and sort code your contact name your phone number You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim. If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. If you use a file only agent (who files your RTI return but doesn’t act for you on any other matters) they won’t be authorised to make a claim for you and you will need to make the claim yourself. Your file only agent can assist you in obtaining the information you need to claim (which is listed above). We are making the claim process as straightforward as possible. Claim You should make your claim using the amounts in your payroll – either shortly before or during running payroll. Claims can be backdated until the 1 March where employees have already been furloughed. If appropriate, worker’s wages should be reduced to 80% of their salary within your payroll before they are paid. This adjustment will not be made by HMRC. Minimum furlough periods Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks. After you’ve claimed HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account. You must pay the employee all the grant you receive for their gross pay in the form of money. Furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500). Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment. When the government ends the scheme When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy). HMRC will process all claims made before the scheme ends. You can find...
read moreCoronavirus Job Retention Scheme – A little bit of detail
We’re being asked the same questions by several of our clients regarding the amounts of pay they can claim using the Coronavirus Job Retention Scheme. Here’s a little detail for you: Full time and part time employees For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included. Employees whose pay varies If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either: the same month’s earning from the previous year average monthly earnings from the 2019-20 tax year If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work. If the employee only started in February 2020, use a pro-rata for their earnings so far to claim. Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim. This information has been taken from the government guidance which you can read more about here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme As always, we’re still here and we’ll do our best to help you through this difficult...
read moreCovid-19 – Small Business Grant
The application forms for the small business grant are now available online for: Wakefield Council: https://www.wakefield.gov.uk/business/business-rates/reliefs/small-business-grant Leeds Council: https://forms.leeds.gov.uk/SmallBusinessGrants/ Kirklees Council advise they will write to every qualifying business, any queries can be directed to: business.rates@kirklees.gov.uk Bradford Council also advise that there is no need to apply, they will also write to the qualifying businesses. Sadly, it now looks as though businesses which are not ratepayers in the Business Rates system are not included in this scheme. ...
read moreFollow Us!
