Author: Bray Accountants

Main items of interest to the majority of small businesses will be:

• Personal allowances and national insurance rates, please view the tax data information page above, of note National Insurance and Dividend tax rates all to increase by 1.25% from 6th April 2022.
• Don’t forget the £1,000 a year in tax-free allowances for property or trading income available since April 2017.
• The Corporation Tax rate is remaining at 19% until April 2023 with the proposal to increase to 25% for Profits over £250,000, Profits below £50,000 will remain taxed at 19%. A tapered rate will return for Profits between £50,000 and £250,000 to merge the two rates.
• VAT registration limit to remain at £85,000 until April 2024 and the deregistration limit £83,000.
• Enhanced Capital Allowances for Companies only from 1st April 2021 to 31st March 2023. A 130% super deduction for expenditure on Plant and Machinery ordinarily qualifying for the 18% writing down rate, plus a first year allowance of 50% on most new Plant and Machinery ordinarily qualifying for the 6% special writing down rate.

From 1st March 2021 supplies of Building and Construction services must operate under new Reverse Charge Regulations. The rules can be quite complicated so please contact us if you have any concerns or queries on how they will apply to you.

https://www.gov.uk/government/publications/restrictihttps://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-servicesng-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

The CIS scheme contains many penalties and risks to Contractors. For more information on how the scheme works, click on the link below for HM Revenue Customs guidance but preferably please contact us for a more detailed explanation. Beware of H M Revenue interpretation on self employed status, it is not law and incorrect, there have been many tax cases on this issue in the last couple of years which detail the current law. Also, care must be taken to ensure gross payment status is not lost through late payments of tax.

https://www.gov.uk/topic/business-tax/construction-industry-scheme

The vast majority of VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns, the introduction of compulsory Digital Links being delayed until 1st April 2021. Those VAT registered businesses below the VAT threshold will not be required to use the system until 1st April 2022, although they can choose to do so voluntarily.

https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat

New rules on Personal Pension withdrawals and annuities were introduced in April 2015, we recommend consulting your IFA on the specific changes but contact us with a view to tax efficient timing of future contributions and withdrawals:

https://www.gov.uk/government/news/pension-changes-2015