Welcome to July's Tax Tips & News
Published: 15 Jul 2021
Our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
The last few weeks has seen some highs and lows, but what a fantastic achievement for the England football team.
We hope everyone is keeping safe and well. Coronavirus still continues to affect the business world, but we are pleased to hear that the vaccination programme is having a positive impact on death rates.
We would like to welcome all the new clients who have joined us in the last month.
- 440,000 tax credit claimants still to renew their claims
- HMRC launches 13,000 investigations into COVID-19 support schemes
- 800,000 claim tax relief for working from home
- Apprenticeship cash boost
- Over 280,000 families now using Tax-Free Childcare
- Furlough scheme starts to wind down
- Schemes create one stop shop for VAT on EU trade
- Property tax changes
HMRC is reminding tax credit claimants that they have until 31 July 2021 to renew their claims.
According to HMRC, 440,000 claimants have yet to renew their claims. More than 2.5 million annual tax credits packs were posted to claimants between late April and early July 2021.
Claimants will have either received an ‘auto-renewal’ reminder or a ‘reply required’ notice. All ‘reply required’ claimants must renew their claims or contact HMRC to notify them of any change in circumstances ahead of the deadline to continue receiving tax credits payments.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
‘We know how important tax credits are to our customers, so we’ve made it quicker and easier to renew claims online. There’s no need to wait for the 31 July deadline – do it now by searching ‘tax credits’ on GOV.UK.’
To renew your tax credits claim visit www.gov.uk/renewing-your-tax-credits-claim.
Internet links: GOV.UK press release
HMRC has launched nearly 13,000 investigations into alleged abuse of the government’s coronavirus (COVID-19) financial support schemes.
A freedom of information request revealed that, up to the end of March 2021, HMRC opened 12,828 investigations into alleged cases of fraud. 7,384 of these investigations related to abuse of the COVID-19 support schemes.
5,020 investigations were launched into the alleged misuse of the Self-employment Income Support Scheme (SEISS).
Commenting on the matter, a spokesperson for HMRC said:
‘It is vital we support businesses to recover by ensuring a level playing field, so the majority are not undercut by the few who tried to cheat the system.
‘We are taking tough action to tackle fraudulent behaviour. We have now opened more than 12,000 inquiries into claimants we suspect may have kept more than they were entitled to. We have also begun a handful of criminal investigations.’
Internet link: CityAM news
800,000 claim tax relief for working from home
HMRC has confirmed that almost 800,000 employees who have been working from home during the pandemic have already claimed tax relief on household related costs.
The saving is worth up to £125 per year for each employee, and eligible workers can claim the full year’s entitlement if they have been told to work from home by their employer, even if it has been for just one day during the tax year.
Employees who have either returned to working in an office since early April or are preparing for their return can still claim the working from home tax relief and benefit from the full year’s relief for 2021/22.
Employees can apply directly themselves and receive the full tax relief that is due. Once their application has been approved, their tax code will be automatically adjusted for the 2021/22 tax year, and they will receive the tax relief directly through their salary.
The government has confirmed that employers of all sizes in England can now apply for £3,000 in extra funding to help them take on new apprentices.
The boost to the apprenticeship incentive scheme was confirmed by Chancellor Rishi Sunak in the Budget in March.
The claims portal opened on 1 June and businesses can apply for £3,000 for each new apprentice hired as a new employee from 1 April until 30 September.
The cash incentive is designed to help more employers invest in the skilled workforce they need for the future as part of the government’s Plan for Jobs.
Please click here for further information
More than 282,000 working families used a Tax-Free Childcare (TFC) account during March 2021, according to figures from HMRC.
HMRC stated that it is the highest recorded number of families in any one month since the scheme was launched in April 2017. These families received a share of more than £33 million in government top-up payments for their childcare.
The TFC scheme can be used to help pay for accredited holiday clubs, childminders or sports activities – enabling parents and carers to save money on the costs of childcare.
The TFC initiative is available for children aged up to 11, or 17 if the child has a disability. For every £8 deposited into an account, families will receive an additional £2 in government top-up, capped at £500 every three months, or £1,000 if the child is disabled.
The government’s Coronavirus Job Retention Scheme (CJRS) begins winding down from 1 July.
The latest data from the Institute for Fiscal Studies (IFS) shows that at the end of April 3.4 million jobs were still on furlough so the change to the furlough scheme will affect thousands of employers across the country.
Since last March, the government has paid 80% of the salaries of employees (up to a maximum government contribution of £2,500 per month) – with the employers only having to pay employer National Insurance and pension contributions.
From 1 July the government will only pay 70% of the furloughed employee’s salary, so the employer has to pay 10% of the salary themselves. In August and September, employers will have to pay 20%, with the government picking up 60%. Furloughed employees will continue to receive 80% of their wages including the employer contribution.
Three schemes were launched on 1 July to deal with VAT on business-to-consumer supplies of goods and services to EU customers.
They are known as the ‘Union’, ‘non-Union’ and ‘import’ schemes. The schemes are designed to facilitate the collection of VAT by one EU member state, which is then passed on to the member state in which the supply is deemed to take place.
The ‘Union scheme’ covers intra-EU supplies of goods and services for businesses with their place of business or a fixed establishment within the EU.
The Union scheme will also allow a UK business to hold stock within the EU (for example, the Netherlands) and pay VAT for all EU sales to the relevant tax authorities.
The ‘non-Union scheme’ covers supplies of services to EU customers by businesses with no establishment within the EU.
The ‘import scheme’ covers the distance sale of goods below €150 fulfilled from stock held outside the EU.
From 1 July 2021 there are changes to the Stamp Duty Land Tax (SDLT) and Land Transaction Tax (LTT) bands for residential property.
SDLT is payable by the purchaser in a land transaction occurring in England and Northern Ireland. The following rates and thresholds apply for SDLT from 1 July 2021 to 30 September 2021:
Residential property (£) Rate (%)
0 – 250,000 0
250,001 – 925,000 5
925,001 – 1,500,000 10
1,500,001 and above 12
Please click here for more information, including rates in Wales.
19th July- Deadline for postal payments of CIS/NICS/PAYE to HMRC (22nd for electronic submissions)
31st July - Second payment on account 2020/21 due
2nd Aug - Deadline for submitting P46 (car) for employees whose car/fuel benefits changed during the quarter to 5th July 2021
5th Aug - Deadline for reaching a PAYE Settlement Agreement for 2020/21
Further information can be found here.
Please contact us if we can help you with these or any other tax or accounts matters.
In addition, if there's anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
New Clients Welcome
Our business grows by referrals. We are always grateful to be introduced to new businesses. Our areas of expertise are:
Company Accounts | Company Tax | Personal Tax | Finance Director Services | Cloud Accounting | Bookkeeping / Payroll | Inheritance Tax
All new client consultations are provided FREE of charge and without obligation