Key Points and Budget Highlights:
‣ No changes to income tax, national insurance, or VAT rates; but as income is expected to rise, more people pay tax or go into the higher rates.
‣ Corporation tax (CT) rates to increase to 25% on profits over £250,000 from April 2023; CT rate at 19% remains for smaller companies with profits under £50,000. Taper relief on CT for profits between the two levels.
‣ Super-deduction for investment in new equipment; from 1 April 130% tax relief for companies only.
‣ Three year carry back of trading losses – See: https://www.gov.uk/government/publications/extended-loss-carry-back-for-businesses
‣ VAT registration limit frozen at £85,000 until 1 April 2024.
‣ 5% VAT rate for food, attractions, accommodation extended – See details here: https://www.gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accommodation-and-attractions
‣ Stamp Duty Land Tax thresholds extended.
‣ Apprenticeship schemes extended.
‣ New grants for high street businesses and hospitality sector – See: https://www.bighospitality.co.uk/Article/2021/03/01/Budget-to-include-5bn-restart-grant-scheme-for-hospitality-and-High-Street-businesses
‣ New business recovery loan scheme – See: https://www.gov.uk/guidance/recovery-loan-scheme
‣ Furlough scheme extended to 30 September – See: https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme
‣ Self-employed income support grants extended – See: https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension
See our Budget Report or watch last weeks roundup for a more detailed summary of business measures here: https://rebrand.ly/LB_BudgetReport
‣ From 2023 changes to late filing penalties for tax – linked to a percentage of the tax, the percentage increasing as time goes on.
‣ Government continuing to tackle tax avoidance schemes, changes to penalties, and new powers for HMRC to obtain information from financial institutions.
‣ Free rapid tests for all businesses for regular workplace testing - available to all businesses, including those with fewer than 50 employees. Register interest by 31 March to access free workplace testing. See: https://www.gov.uk/government/news/free-rapid-tests-for-all-businesses-for-regular-workplace-testing
‣ Continuation of the home office equipment expenses COVID-19 easement for the 2021-22 tax year - was due to end on 5 April 2021 but will now be extended to have effect until 5 April 2022. See: https://www.gov.uk/tax-relief-for-employees/buying-other-equipment
‣ Kickstart Scheme update - You no longer need a minimum of 30 job placements to apply directly for a grant. See: https://www.gov.uk/guidance/apply-for-a-kickstart-scheme-grant
‣ Common mistakes on a VAT return
∙ Poor record keeping
∙ Partial exemption rules not being applied correctly or at all
∙ Failure to pay over VAT on deposits on receipt
∙ Not spotting the requirement to repay VAT previously claimed on unpaid purchase invoices older than 6 months.
∙ Incorrect reporting of exempt and zero-rated transactions
∙ Not registering for VAT in a timely manner when exceeding the turnover threshold of £85,000
∙ Transactions relating to land and property not being accounted for correctly
∙ VAT claimed incorrectly on business entertainment
See the full blog here: https://rebrand.ly/LB_VATCQM
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If you have any questions or would like to discuss any topics further, then please get in touch. You can call us on 01243 782 423, or email LetsTalk@lewisbrownlee.co.uk. Alternatively, head to our website to see our other resources and news updates - www.lewisbrownlee.co.uk