Key changes to Covid-19 support schemes and taxation

furlough

The end of furlough

The CJRS furlough scheme (Coronavirus Job Retention Scheme) ends on 30 September 2021. Final claims for September 2021 can now be submitted and should be made by the deadline of Thursday 14 October ’21.

For the furloughed employee, employers can claim a maximum of 60% of usual wages for hours not worked, capped at £1,875 per month per employee. Employers are required to contribute 20%, ensuring the furloughed worker continues to receive 80% of usual wages.

Employers should continue to make all tax and National Insurance payments relating to furlough although HMRC urges businesses to get in touch if this may prove a challenge.

The end of the SEISS scheme

The deadline for claiming the fifth and final SEISS grant (Self Employed Income Support Scheme) is 30 September 2021. The eligibility criteria have been tightened up and it is important claims are based on the correct figures. We can help with your grant claim but cannot submit it for you. Grants are subject to tax and should be declared on the individual’s self-assessment tax return. If we prepare your return, please tell us about any grants received across the 5 claim periods.

Covid sick pay rebate scheme

The Covid-19 sick pay rebate scheme ends on 30 September 2021. Any outstanding claims should be made by 31 December 2021. Claiming via the Covid sick pay rebate scheme.

Health and social care levy

Under the recently announced Health and Social Care tax bill, from April 2022, employers, employees and the self employed will all pay an extra 1.25% in the pound for National Insurance. Money collected via the extra dividend tax will go towards funding social care in England and help the NHS recover from the pandemic.

From April 2022, dividend tax rates increase by 1.25% although the £2,000 dividend tax allowance remains as before. Taxpayers pay rates as follows:

Basic rate taxpayers – 8.75%

Higher rate taxpayers – 33.75%

Additional rate taxpayers – 39.35%

Capital Gains Tax reporting deadline on sales of residential property– penalties being applied

For residential property sold on or after 6 April 2020, taxpayers should report the gain and pay any resulting tax within 30 days of sale. HMRC is imposing penalties and interest on those who fail to report and pay on time, and we see this happening in a surprisingly large number of cases. There are additional considerations if the property was tied up in a trust or owned by a non-UK resident.

We can advise on all your CGT obligations, helping you meet your tax requirements.

Corporation tax increase in 2023

A reminder that the main rate of corporation tax increases to 25% from 1 April 2023 on profits above £250,000. Companies with profits of £50,000 or less will continue to pay tax at 19%.

Companies reporting profits between £50,000 & £250,000 sill pay tax at the main rate, reduced by a marginal rate relief.

Loss carry back extension

Businesses with accounting periods ending between 1 April 2020 and 31 March 2022, trading losses can be carried back up to three years, offsetting against the most recent profits first.

Residential Property Developer Tax

Draft legislation has now been published for the Residential Property Developer Tax with consultation running until 15 October 2021. This new tax will bring about an end to unsafe cladding and provide reassurance over the safety of residential buildings.

Super deduction of 130% available for companies

From 1 April 2021 until 31 March 2023, companies buying qualifying assets can claim a 130% ‘Super Deduction’ (saving tax of 25p for each £1 spent); the 50% First Year Allowance is also available for qualifying special rate assets. Additionally, the Annual Investment Allowance is available for businesses purchasing qualifying assets – until 31 December 2021 the AIA limit is £1m.

Finally

Chancellor Rishi Sunak delivers his next Budget on Wednesday 27th October. We will bring you our summary of the key points later that day.

How Curo can help

Tax is an ever-changing landscape and understanding the rules can be a challenge. Our experienced tax team can advise on all aspects of tax compliance and planning, ensuring all statutory requirements are met and a tax optimal position is achieved. Please contact [email protected] or call 01527 558537 to discuss any tax-related queries or issues relating to furlough.