Business & Government Update

Finishing the tax year 2020-21 and preparing for 2021-22

As we head towards April now is the time to think about pre-tax year planning, doing the year-end administration, and filing the necessary forms to HMRC. Time is running out to make the most of your tax allowances this year. The first step to making the most of your tax allowances can mean looking closely at your pension.

UK residents under 75 can add money to a pension and receive tax relief on it. You’ll automatically get basic rate tax relief (currently 20%) paid into your pension by the government. If you pay tax at a higher rate you could get up to a further 25%, but you will need to claim it by declaring any pension contributions you have made on your tax return. The annual allowance is the maximum you can invest in your pension each year that would be eligible for tax relief. It is currently £40,000, or your entire income, whichever is the smaller and there are lifetime allowances to consider.

Prepare for tax changes if you engage or supply contractors – Off-payroll working rules (IR35)

If you are a medium or large-sized non-public sector organization and you engage contractors, you should now be taking action to prepare for changes to the off-payroll working rules (IR35) coming into effect on 6 April 2021.

For all contractors working through their own limited company, you will need to:

• Identify contractors who work in this way

• Decide if they are inside or outside the rules

• Inform your contractors of their status determination, and any agencies you engage with

• Be ready to add them to payroll if needed

• Be ready to deal with any disputes

• Maintain an audit trail and test your processes, systems, and controls

If you are an employment agency which supplies contractors

• Identify contractors who work in this way

• Be ready to pass on the status determination statement to any agencies you engage with down the supply chain or be ready to put contractors onto payroll

• Maintain an audit trail and test your processes, systems, and controls

You can find more information about the actions you need to take to prepare here:

https://www.gov.uk/guidance/prepare-for-changes-to-the-off-payroll-working-rules-ir35

COVID-19 GOVERNMENT SUPPORT NEWS

VAT deferral – apply now to spread your payments

The VAT deferral new payment scheme is open for all businesses who deferred VAT due between 20 March and 30 June 2020 and still have payments to make, or who are unable to pay in full by 31 March 2021.

CJRS claims for March

You can now submit your CJRS claims for periods in March 2021. These must be made by Wednesday 14 April. You can claim before, during, or after you process your payroll.

Extension to the CJRS

As announced in the 2021 Spring Budget, the CJRS has been extended until the end of September 2021. For periods from 1 May 2021 onwards, you will be able to claim eligible employees who were on your PAYE payroll on 2 March 2021. This means you must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.

The government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021. For periods in July, CJRS grants will cover 70% of employees' usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.

Providing apprenticeships during the coronavirus (COVID-19) outbreak

The Department of Education (DoE) has updated its guidance to reflect the extension of the Coronavirus Job Retention Scheme and remove advice relating to pre-March 8 2021. This guidance is for apprenticeship training providers (providers), employers, end-point assessment organizations (EPAOs), and apprentices. It describes how and when apprentices can safely train and undertake an assessment in the workplace, education and assessment settings, and the temporary flexibilities which apply during the coronavirus (COVID-19) outbreak.

One-off £500 payment for working households receiving tax credits

The coronavirus support scheme for working households receiving tax credits has been updated to clarify that the payment is non-taxable and will not affect benefits. It does not need to be declared as income for Income Tax Self-Assessment or for tax credit claims and renewals. If you want to change your bank details, you must do this by 8 April.

Coronavirus Restart Grant - England

The Restart Grant scheme supports businesses in reopening safely as COVID-19 restrictions are lifted. Grants will be available from 1 April 2021, but you can submit applications in advance.

Eligible businesses in the non-essential retail, hospitality, accommodation, leisure, personal care, and gym sectors may be entitled to a one-off cash grant of up to £6,000 from their local council.

Your business may be eligible if it is:

• Based in England

• Rate-paying

• In the non-essential retail, hospitality, accommodation, leisure, personal care, or gym sectors

• Trading on 1 April 2021

Local councils will use their discretion to determine whether businesses meet the eligibility criteria for this grant scheme.

Eligible businesses will be paid:

• A one-off grant of up to £6,000 in the non-essential retail sector

• A one-off grant of up to £18,000 in the hospitality, accommodation, leisure, personal care, and gym sectors

Accreditations