There have been some significant changes to VAT penalties and interest if you submit a late VAT Return for an accounting period starting on or after 1 January 2023 and / or if you pay the liability later than the due date.
There are separate penalties for late submission and late payment and they can be significant.
If you are struggling to pay your liability on time, then you must consider a Time To Pay arrangement asap to reduce any penalty being charged.
Please contact us should you require any assistance.
All detail can be seen at this link:
From 1 April 2023, there is no longer a single Corporation Tax rate for non-ring fence profits.
At the Budget, the government announced that the Corporation Tax main rate for non-ring fence profits would increase to 25% for profits above £250,000.
A small profits rate of 19% was also announced for companies with profits of £50,000 or less.
Companies with profits between £50,000 and £250,000 will pay tax at the main rate, reduced by a marginal relief. This provides a gradual increase in the effective Corporation Tax rate.
Following on from yesterday’s budget, here is a link to our guide to the various announcements. Thankfully, nothing on pensions or CGT yet.
Budget guide March 2021
As always, please contact us if you have any questions.
Businesses that took advantage of the option to defer VAT payments due to Covid last year can join the new scheme to pay it in smaller monthly instalments.
All the information you require is here:
The new domestic reverse charge is finally being introduced from 1 March 2021.
This applies to the majority of contractors and subcontractors that are registered for VAT and report under the CIS scheme.
Details are here but if you require any further help, please do not hesitate to contact us:
Self Assessment customers will not receive a penalty for their late online tax return if they file by 28 February, HM Revenue and Customs’ (HMRCs’) Chief Executive Jim Harra has announced.
Taxpayers are still obliged to pay their bill by 31 January. Interest will be charged from 1 February on any outstanding liabilities. Customers can pay online, or via their bank, or by post before they file.
Taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. But they will need to file their 2019 to 2020 tax return before setting up a time to pay arrangement, so HMRC is encouraging everyone to do this as soon as possible.
Some of you may have taken advantage of the VAT deferment for liabilities falling due between 20 March 2020 and 30 June 2020 due to Covid-19.
HMRC has released some new guidance on how to pay this, and the possibility of further deferring elements of the liability.
Guidance can be found here:
HMRC are allowing employees to claim an allowance for working from home that has been forced by COVID 19.
Here is the link:
https://www.gov.uk/tax-relief-for-employees/working-at-home
The guidance has now been published in relation to the recently announced additional 2 self employed support grants.
The next grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. The Government will set out further details, including the level, of the fourth grant in due course.
The grants are taxable income and also subject to National Insurance contributions.
The online service for the next grant will be available from 30 November 2020.
Here is a link to the relevant HMRC page:
HMRC have now published their guidance on the updated furlough rules that kicked in on 1 November 2020.
Employees can be fully furloughed, or flexible furloughed.
All rules are here, and if you need any assistance, please contact us:
The new regime is due to be implemented from 1 March 2021 and will affect businesses within the Construction industry. Here is a flowchart that HMRC have produced to see whether your supplies will be affected by the scheme.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878587/Annex_1_-_VAT_domestic_reverse_charge_for_building_and_construction_services.pdf
This new reverse charge has been delayed again, this time due to the Coronavrius pandemic.
It was due to come into force on 1 October 2020. The new implementation date is 1 March 2021.
Good news for the construction industry and us as advisors, and at last something positive from the pandemic!