We hope you’ve had a positive a start to the new year. Here’s some supportive information that might help you and your business, including the VAT opt-in scheme, Brexit & Work from Home tax relief.
GET READY TO OPT-IN TO THE VAT DEFERRAL SCHEME
Were your business finances affected when the first Coronavirus wave hit the UK early last year? At the time, the Government gave businesses a lifeline by allowing the deferral of VAT for the period 20th March to 30th June 2020 to be paid by 31st March 2021. In December, a further lifeline was announced by Rishi Sunak, allowing businesses to spread owed payments across a further 11 months if they still cannot pay the VAT by the 31st March 2021 deadline. In order to benefit, you must get ready to opt-in now before the scheme opens and before you make your first payment by the same deadline.
Follow these steps to get ready
CLAIM TAX RELIEF IF YOUR EMPLOYEES ARE WORKING FROM HOME IN LOCKDOWN
Here’s a reminder that a claim can be made via an employee’s personal tax account to claim for the whole of the tax year 2020/21. HMRC will adjust their tax code and they will receive tax relief on the claim. As an example, for a basic rate taxpayer this will be around £62.00. There is a similar tax break for the self-employed which provides a deduction from profits of up to £26 a month.
It is straightforward to create a personal tax account – your employees will need their passport and a recent payslip/P60 to verify their ID. If you have any queries or if your employees need our support with any aspect of their personal tax, please contact a member of our Tax Team on 01925 830 830.
The self-assessment deadline for the year ending 5th April 2020 is 31st January 2021 – this has NOT been extended by the Government. However if you think that you might struggle paying tax owed for this period as a result of personal finances being affected by Coronavirus, you can use the HMRC Time to Pay service to request support.
DOMESTIC REVERSE CHARGE VAT FOR THE CONSTRUCTION SECTOR GOES LIVE 1st MARCH
The new rules will apply throughout the supply chain to any B2B construction supplies, shifting the VAT responsibility to the final customer or ‘End User’ to combat fraud and prevent the exploitation and avoidance of VAT payments by sub-contractors and construction workers within the construction industry. To find out what changes you need to implement, as well as to prepare for how this revised implementation date could affect your cashflow, read our blog below.
FURLOUGH SCHEME EXTENSION REMINDER
The Coronavirus Job Retention Scheme (CJRS) has been extended until 30 April 2021. You can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. The employer is responsible for paying the employer’s national insurance contributions and employer pension contributions. If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough.
You can claim for employees who were employed on 30th October 2020, as long as you have made a PAYE RTI submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee. This may differ where you have made employees redundant, or they stopped working for you on or after 23 September 2020 and you have subsequently re-employed them.
Contact our Payroll Services team for further advice on claiming from the CJRS, on
0161 905 1801.
Access all of our Coronavirus guidance here
1st APRIL 2021 – NATIONAL MINIMUM WAGE & NATIONAL LIVING WAGE INCREASES
As a result of the pandemic leaving so many young people out of work, the National Living Wage is being extended to people aged 23 and over, meaning they must be paid at least £8.91 per hour from next April. The National Minimum Wage is also increasing for the younger age groups and apprentices.
- For people aged 21-22, it will rise 16p from £8.20 to £8.36 (up 2.0%)
- Those aged between 18-20 will have their wages boosted 11p, from £6.45 to £6.56 (up 1.7%)
- Wages for 16-17-year-olds will go up 7p, from £4.55 to £4.62 (up 1.5%)
- The apprentice rate will rise 15p, from £4.15 to £4.30 (up 3.6%)
If you need any support from our Payroll Services team, please do not hesitate to call 0161 905 1801.
