The Chancellor Rishi Sunak presented his second Budget on Wednesday 3 March 2021. In his speech he stated his Budget ‘meets the moment with a three-part plan to protect the jobs and livelihoods of the British people’.
Main Budget proposals
Tax measures include:
- – a super-deduction for companies investing in new plant and machinery
- – a time extension of the temporary increase to the SDLT nil rate band for residential property in England and Northern Ireland
- – an extension to the temporary 5% reduced rate of VAT for certain supplies
- – a temporary increase in the carry-back period for business losses
- – an increased rate of corporation tax from 2023.
Other measures include:
- – a new mortgage guarantee scheme
- – extension to the Job Retention Scheme
- – a Self-Employment Income Support Scheme fourth and fifth grant
- – an extension to the business rates holiday in England.
Previously announced measures include:
- – a cap on the amount of R&D tax credit paid to a loss-making small or medium-sized enterprise
- – new rules apply to off-payroll working payments made for services provided on or after 6 April 2021.
If you’ve taken advantage of the Covid VAT payment deferral scheme you have until 21st June to register with HMRC to repay the outstanding VAT by monthly instalments. The deadline for payment in full or to opt into the monthly instalment plan was 31st March 2021 but has now been extended to 21 June 2021.
If you’ve deferred VAT payments due between 20th March and 30th June 2020 and still have amounts outstanding, you can do the following:
* Pay the deferred VAT in full, on or before 31st March 2021
* Join the VAT deferral new payment scheme
The online service is open between 23rd February and 21st June 2021
* Contact HMRC if neither of the above apply
Failure to do either of the above may result in HMRC charging interest or a penalty.
You can pay your deferred VAT here. <http://www.gov.uk/pay-vat>
The new scheme will be open from 23rd February 2021 and is accessible via your HMRC Business Tax Account. The first instalment has to be paid when applying to use the scheme, with the following payments being made via direct debit (if you’re unable to pay via direct debit alternative payment methods will be available).
Businesses must join the scheme themselves by 21st June 2021. Unfortunately, agents can’t do this on behalf of clients as the HMRC software doesn’t allow us do to so. To be eligible to use the deferral scheme, businesses must have a balance outstanding to HMRC but all VAT returns must be submitted and up to date.
For larger businesses who are in the VAT payment-on-account regime, the scheme will be available to use towards the end of March.
If you need further information or advice please drop us an email to: email@example.com
We will be closing our office for the festive period on Wednesday 23rd December at 1pm and re-opening on Monday 4th January 2021 at 9am.
Should you wish to contact during that period please email us on: firstname.lastname@example.org
With all the restrictions still in place due to Coronavirus the annual Christmas party might seem very unlikely this year, however HMRC has just announced a way we can all enjoy some festive cheer whilst still socially distancing.
As most employers are aware you can host an annual party and as long as the following conditions are met there are no tax implications for you or your employees:
Condition 1: Available to all employees
Condition 2: Not cost more than £150 per head for all attendees
This year HMRC have confirmed by updating their guidance that the above annual party exemption can now include virtual functions.
What does this mean? In essence if you ‘host’ a zoom meeting which all your employees are invited to join, you can spend up to £150 per attendee to celebrate and be merry all in the comfort of your own home.
Normal parties obviously include food and alcohol and the virtual party is no different!! You could send your employee a hamper they can enjoy while listening to Christmas songs or even create a Christmas quiz. There is no set guidance on what your virtual party should include just as long as the above conditions are met. We would also recommend taking a screen shot to confirm the number of attendees should HMRC query this.
Please note that the annual exemption can cover multiple events during the year (so long as they are annual events and not one-offs) and that the £150 per attendee is not an allowance, i.e if the cost exceeds £150 per head for any annual party the full amount becomes taxable on the employee and in turn, you as the employer. If a virtual party is not for you, please remember that although this year has been hard there are tax consequences to giving employees gifts. If you are wanting to reward your employees by giving them a bonus this should always go through payroll and have the appropriate tax and national insurance deducted from it.
If you simply want to send them a bottle of wine or turkey to cheer them up then so long as this is under £50 then this can be done tax free under the trivial benefit rules.
Whilst there is no stated cap on the number of times a trivial benefit gift can be given (unless directors are involved), you may also wish to consider this as a means of whishing your staff a Merry Christmas. However, please be cautious, as trivial benefits must never be seen as way of rewarding your staff.