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Blackman Terry - Tax News for March 2021

Welcome...

...to March's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

A year since the first lockdown....what a year it has been! We hope that your family have stayed well and your business continues to prosper. We are missing seeing the daffodils and other spring flowers in the gardens of Blackman Terry offices, but hope to all be back together in the office again soon.   

March 2021

Bounce Back Loan - deadline 31st March 2021

Applications for these loans must be made by 31 March 2021 when the scheme closes. The scheme has been very successful with many businesses securing the funds relatively easily and quickly. The loan term is six years and the amount available is from £2,000 up to 25% of a business' turnover, with the maximum being £50,000. No interest is payable in the first 12 months and thereafter at 2.5%.
The government will provide a 100% guarantee to the lender against the outstanding balance, although the borrower remains liable to repay the full amount.
If you originally borrowed less than the maximum amount available to you, you may wish to claim for a top-up before 31 March 2021

For more information click on this link

Online service opens for VAT deferral scheme

Applications for these loans must be made by 31 March 2021 when the scheme closes. The scheme has been very successful with many businesses securing the funds relatively easily and quickly. The loan term is six years and the amount available is from £2,000 up to 25% of a business' turnover, with the maximum being £50,000. No interest is payable in the first 12 months and thereafter at 2.5%.
The government will provide a 100% guarantee to the lender against the outstanding balance, although the borrower remains liable to repay the full amount.
If you originally borrowed less than the maximum amount available to you, you may wish to claim for a top-up before 31 March 2021

For more information click on this link

Online service opens for VAT deferral scheme

HMRC has announced that businesses that deferred VAT payments last year can now join the new online VAT Deferral New Payment Scheme to pay it in smaller monthly instalments.
To take advantage of the new payment scheme businesses will need to have deferred VAT payments between March and June 2020, under the VAT Payment Deferral Scheme. They will now be given the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021.
Businesses will need to opt-in to the VAT Deferral New Payment Scheme. They can do this via the online service that opened on 23 February and closes on 21 June 2021.

For more information click on this link

Advisory fuel rates for company cars

New company car advisory fuel rates have been published and took effect from 1 March 2021.

The guidance states: 'You can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 March 2021 are:

 Engine size

Petrol

 1400cc or less

10p

 1401cc - 2000cc

12p

 Over 2000cc

18p

 

Engine size

LPG

1400cc or less

7p

1401cc - 2000cc

8p

Over 2000cc

12p

 

Engine size

Diesel

1600cc or less

9p

1601cc - 2000cc

11p

Over 2000cc

12p

Please click here for further information

HMRC clarifies off-payroll rules

HMRC has published a briefing on its approach to the changes to off-payroll working rules, commonly known as IR35, which will be introduced on 6 April 2021.

Reiterating its advice from last year, HMRC has confirmed that it will not issue penalties for inaccuracies in the first 12 months of the regime, unless there is evidence of deliberate non-compliance.

HMRC also confirmed that it will not use information it receives under the expanded regime to open new compliance enquiries into returns for tax years before 2021/22, unless there is reason to suspect fraud or criminal behaviour.

The new tax rules will see the extension to medium and large organisations in the private sector. These reforms will shift the responsibility for assessing employment status to medium and large organisations engaging individuals via a personal services company.

Internet link: GOV.UK

1st April - new deadline for Self Assessment taxpayers

HMRC has announced that Self Assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April.

The payment deadline for Self Assessment is usually 31 January and interest is charged from 1 February on any amounts outstanding.

Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, because of the impact of the coronavirus (COVID-19) pandemic, HMRC is giving taxpayers more time to pay or set up a payment plan.

Taxpayers can pay their tax bill or set up a monthly payment plan online and are required to do this by midnight on 1 April to prevent being charged a late payment penalty. The online Time to Pay facility allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.

Salary and dividends 

Have you utilised the dividend allowance of £2,000? If not, you may wish to consider paying yourself a dividend by 5 April 2021.
Another point to consider is whether you have used up the whole of the basic rate band of £50,000 in 2020/21? If not, you may wish to pay yourself further dividends to be taxed at only 7.5%.
Have you paid yourself any salary yet in 2020/21? Salary of up to £8,788 can be received without incurring any national insurance. Please call or email us if you would like to discuss this further. 

Loss Relief

In the Budget on 3 March the Government announced an extension to loss relief for businesses, in recognition of the fact that many businesses will have made losses over the past year. Currently a business can only carry a loss back to set against the profits of the previous year. The additional relief allows a business to carry a loss back to the profits of the previous three years.

For companies, the losses the extension applies to are those arising in the accounting periods ending between 1 April 2020 to 31 March 2022. After utilising the profits of the prior year, a maximum of £2 million of unused losses can be carried back and set against the profits of the earlier two years.

For unincorporated businesses, the losses are those that arise in the tax years 2020/21 and 2021/22. The maximum extended loss that may be carried back from each of the tax years 2020/21 and 2021/22 is £2m.
Please click here for more information 

Spring budget reminder.

The Chancellor Rishi Sunak presented his second Budget on Wednesday 3 March 2021. We sent out an update shortly following this. For a reminder of the key points, please click here. 

April key tax dates

1st April- Deadline for Self Assessment payments unless a payment plan has been set up online. 
19th April-
Deadline for postal payments of CIS/NICS/PAYE to HMRC (22nd for electronic submissions)

 

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