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The temporary 5% rate applies to the following supplies, but is not an exhaustive list:
Catering, including hot takeaway food
Accommodation in hotels, guest houses and similar places
Tourist attractions such as theme parks, zoos, theatres and cinemas
When the Chancellor announced a temporary cut in the rate of VAT for the hospitality sector and attractions in his Summer Statement on 8 July there were a number of areas that needed clarification. The reduction applies to supplies made between 15 July 2020 and 12 January 2021.
HMRC have recently announced that they may allow limited companies to make claims for loss relief and tax refunds even though the current accounting period has not yet ended and the corporation tax return has not been submitted.
Second self-employed income support grants to be paid in August:
On 29 May the Chancellor announced that the grant scheme to support the self-employed would also be extended with a further payment based on 70% of average profits for the 3 years ended 2018/19, limited to £6,570 rather than £7,500.
From 1 July the new CJRS “Flexible furlough” grant scheme starts, which will allow employers to gradually bring their furloughed employees back to work part-time. The new scheme will be in place until the end of October and the Government will gradually reduce the amount of grant towards employees’ furlough pay to 70% in September and 60% in October.
Many of you will be looking forward to the football season resuming, albeit behind closed doors. There has been an interesting tax case recently concerning the employment status of referees.
The Government are still committed to the transitional Brexit period ending on 31 December 2020 and businesses trading with the EU need to make sure they are ready for major changes. If you’re submitting an application for Authorised Economic Operator (AEO) status from 1 June 2020, you must submit them through the EU Customs Trader Portal.
Despite the coronavirus lockdown HMRC have announced that they will still expect P11d forms reporting expenses and benefits to be submitted by the normal 6 July deadline.
Sole traders and members of partnerships started making claims under the Self-Employed Income Support Scheme on Wednesday 13 May and many have already received their grant
Chancellor Rishi Sunak announced on 12 May that the CJRS furlough scheme will be extended until the end of October. The scheme will continue in its current form until the end of July with the Government paying 80% of employees wages up to £2,500 a month. For accounts purposes the amounts received should be credited to a “grants received” account, and this will therefore increase taxable profits of the business.
Corporation tax payment for year to 31/07/19 (unless quarterly instalments apply).
A new CGT reporting and payment on account system was introduced for residential property disposals by UK resident taxpayers from 6 April 2020.
Child benefit charge: With many employees and the self-employed being furloughed, being made redundant, or making lower profits, their income for 2020/21 may well fall below the £50,000 limit at which child benefit starts being taxed.
Furlough Scheme (CJRS) claims portal opened on Monday 20 April and early indications are that it seems to be working smoothly but with a few teething problems as you would expect from a brand-new system.
The government has announced that Working Tax Credits payments will be increased from 6 April 2020. As part of a number of measures to support the country during the COVID-19 pandemic, the basic element of Working Tax Credit has been increased by £1,045 to £3,040 from 6 April 2020 until 5 April 2021.
In times of uncertainty we are seeing the demand for advice increase. We understand the frustrations our clients who are self-employed or freelance.
1/03 Corporation tax payment for year to 31/5/19 (unless quarterly instalments apply)
Your maximum annual investment in an ISA for 2019/20 is £20,000. Your investment needs to be made before 6 April 2020. In addition, have you thought about investing for your children or grandchildren by setting up a Junior ISA? In the 2019/20 tax year, you can invest £4,368 into a Junior ISA for any child under 18.
For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and their employer.
For every £2 that your adjusted net income exceeds £100,000 the £12,500 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.
Another tax relief that may be further restricted or even abolished is CGT entrepreneurs relief. This relief allows business owners to pay just 10% CGT on the first £10 million of capital gains when they dispose of their business and was tightened up in the Autumn 2018 Budget.
We are expecting major changes to inheritance tax (IHT) in the March Budget following two reviews by the Office of Tax Simplification (OTS) and also a report by an All Party Parliamentary Committee.
1/02
Corporation tax payment for year to 30/4/19 (unless quarterly instalments apply)
Another announcement to listen out for in the Spring Budget is whether the Chancellor acts on the recommendations of the Office of Tax Simplification (OTS) regarding inheritance tax (IHT).