2022 Spring Budget

SPRING BUDGET 2022

Against a backdrop of rising inflation, Chancellor Rishi Sunak presented his
first Spring Statement on Wednesday 23 March 2022.

Contents Page
Personal Tax 2 – 3
Business Tax 3 – 4
Employment Tax 5
Capital Taxes 6
Other Matters 6
Tax calendar 7

2021 Autumn Budget

The Chancellor Rishi Sunak presented his third Budget on 27 October 2021. In his speech he set out the plans to “build back better” with ambitions to level up and reduce regional inequality.

Contents Page
Personal Tax 2 – 4
Employment 5 – 6
Business 7 – 10
Capital Taxes 11 – 12
Other Matters 13 – 14
Rates and Allowances 15 – 16

Director Support Scheme Announced

The Minister for the Economy has announced details of the Limited Company Director’s Support Scheme, designed to provide financial support to company directors who have personally been adversely impacted by COVID-19.

While any help is welcome, this support is very limited and will have little benefit, if any to most directors.

The scheme, administered by Invest Northern Ireland on behalf of the Department for the Economy, will open to online applications at 6pm on Thursday 21 January 2021.

Full detailshttps://www.nibusinessinfo.co.uk/content/limited-company-directors-support-scheme

What is available?

The Limited Company Director’s Support Scheme (LCDSS) will provide an initial one-off taxable grant of £1,000 to eligible company directors who meet the criteria outlined below. While applications are invited from individuals who hold more than one directorship, only one application is allowed per person.

Who is eligible?

To be eligible for the scheme you (the Director) must meet all of the following criteria:

  • You are a resident of Northern Ireland.
  • You are a Person with Significant Control (PSC) for the company/companies* listed in your application (i.e. you hold more than 25% of shares in the company).*You will be asked to list all companies in which you hold more than a 25% share as part of your application.
  • You must work in the company/companies named in your application.
  • At 31 March 2020 (prior to COVID-19) at least 50% of your income came from your director’s remuneration (salary) and dividends.If you are a director of more than one company then your remuneration (salary) and dividends from all companies must represent at least 50% of your total income.
  • Your projected remuneration (salary) and dividends from the company for the 2020/21 financial year is 40% lower than it would have been in the absence of coronavirus. If applicable, this should include any furloughed income received.
  • Your total projected taxable income for 2020/21 is less than £50k.The company/companies in which you are an eligible director must:
  • Be currently trading but impacted by reduced demand due to coronavirus, or previously trading but temporarily unable to due to coronavirus.
  • Be based and operating in Northern Ireland.
  • Have been trading at 1 March 2020 (i.e. prior to the COVID-19 pandemic).
  • Intend to continue trading.

Who cannot apply?

  • Individuals who are eligible for the Newly Self-Employed Support Scheme.
  • Directors of investment companies or property companies, unless you hold other qualifying directorships.
  • Directors of companies that only started trading after 1 March 2020.
  • Directors who finance the business but do not work in it.
  • PSCs where the PSC is a trust or limited company, i.e. only individuals who are PSCs can apply.
  • The applicant has failed to comply with a COVID-19 prohibition notice, served by the Police Service of Northern Ireland (PSNI), under regulation 7 of The Health Protection (Coronavirus, Restrictions) Regulations (Northern Ireland) 2020(b).
  • The grant to be paid from the Limited Company Director’s Support Scheme will result in the company that has paid your PAYE Salary, exceeding its applicable European Union ‘de minimis’ ceiling. Find more detail on state aid rules.

How do I apply?

You will be able to check your eligibility for the Limited Company Director’s Support Scheme through an online checker and apply online from 6pm on Thursday 21 January 2021.

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our website.

HMRC launches VAT payment deferral scheme

If your business deferred some VAT in 2020 due to coronavirus, you might be bracing to pay it back by 31 March 2021.

Holiday window. The optional payment holiday window introduced by the government in 2020 applied to VAT owed by your business between 20 March and 30 June 2020. This was mainly relevant to VAT return periods up to the end of February, March and April but it also applied to payments on account due between those dates for users of the annual accounting or large payer schemes.

Extension. The government confirmed that the 31 March 2021 cliff-edge repayment date could be avoided if your business took advantage of a new eleven-month optional VAT payment scheme . The details of the scheme have now been announced (see The next step ).

Mechanics. You must opt into the new payment scheme. The process will be available in early 2021. Instead of paying the full amount owed by the end of March 2021, you can make up to eleven smaller instalments, interest free. All instalments must be paid by the end of March 2022. Tip. You will select the number of instalments you want to make at the time of registering for the scheme. You can choose any number between two and eleven. Tip. You must opt into the VAT payment scheme yourself as the business owner, your accountant or tax advisor cannot do this for you.

Prepare. Before opting into the scheme, you must create your own Government Gateway account if you don’t already have one. All outstanding VAT returns must have been submitted for the last four years. You must also be clear about the amount of VAT that you originally deferred, less any payments you have made since then. Tip. If you still cannot pay your VAT, contact HMRC for further assistance and a possible time to pay arrangement.

The VAT payment scheme means you can spread the deferred VAT over eleven months, avoiding the 31 March 2021 cliff-edge.
Ensure you have a Government Gateway account, and know how much you owe before opting in.

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our website.

Furlough scheme extended for a month

The Coronavirus Job Retention Scheme has now been extended for a month.
What are the terms of the extension and where does this leave the new Job Support Scheme?

Under the terms of the Coronavirus Job Retention Scheme (CJRS) extension, employees will continue to receive 80% of their usual pay for hours not worked, up to a maximum cap of £2,500, and you will retain the flexibility to bring furloughed employees back to work on a part-time basis (flexible furlough) or furlough them full time (full furlough). The government will pay the 80% and you will only be asked to cover employers’ NI and pension contributions for furloughed hours, which is effectively the same level of CJRS grant as applied in the month of August. You must also continue to pay the employee for any hours worked in the normal way. The other key points are:

  • the extended CJRS will operate in much the same way as the current CJRS, with employers being paid upfront to cover wage costs, but there will be a short delay in payment whilst the government updates its systems and so you’ll be paid in arrears for that period
  • all employers with a UK bank account and UK PAYE scheme can claim the extended CJRS grant – neither you nor the employee needs to have previously used the CJRS
  • to be eligible to be claimed for under the extended CJRS, employees must be on your PAYE payroll by 23:59 on 30 October 2020 – this means an RTI submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020
  • as under the current CJRS rules: employees can be on any type of contract and you’ll be able to agree any working arrangements with them; you can claim the grant for the hours your employees aren’t working, calculated by reference to their usual hours worked in a claim period; when claiming the extended CJRS grant for furloughed hours, you’ll need to report and claim for a minimum period of seven consecutive calendar days; you’ll need to report hours worked and the usual hours an employee would be expected to work in a claim period; and for worked hours, you’ll need to pay employees under the terms of their employment contract and you’ll be responsible for paying the NI and income tax due on those amounts
  • you can choose to top up employees’ wages above the extended CJRS grant at your own expense if you wish, but you don’t have to do so
  • there will be no gap in eligibility for support between the previously announced end-date of the current CJRS and the extension.

It’s not clear yet whether the extended CJRS will cover just the calendar month of November, or whether it will run until 2 December, which is the date when the new national restrictions are due to end.

The commencement of the Job Support Scheme (JSS), which comprises JSS Open (for open business premises) and JSS Closed (for closed business premises), has been postponed until the CJRS ends. The JSS will then be introduced following the end of the CJRS.

Further guidance, including on how to claim the extended CJRS support through an updated claims service, is expected to be published shortly.

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our website.

Eat Out to Help Out Scheme – How to claim money back

If you have registered your establishment for the Eat Out to Help Out Scheme and offered scheme discounts to diners on Mondays to Wednesdays between 3 and 31 August, you can:

  • claim back the discount given on food and non-alcoholic drinks
  • submit weekly claims for August until 30 September

HMRC’s online claims service to submit claims is now live. HMRC has also updated its guidance on how to submit claims which is available here and summarised below:

When you can claim : You can make a claim after seven days from the date of your registration. You can only claim for scheme discounts you offered on or after the date you registered.

What you will need to make the claim: You will need the records you have kept for each day you have used the scheme, including the:

  • total number of diners (covers) who have used the scheme, including children;
  • total amount of discount you have given; and
  • period you are claiming for.

If you are making a claim for more than one establishment, you will need to have the records for each establishment and overall total value of the claim for all establishments ready before you claim.

How to claim: Claims are made via the following link through your HMRC government gateway – https://www.tax.service.gov.uk/eat-out-to-help-out/claim. You can make up to five claims before 30 September. You cannot claim after that.

Examples on how to work out the total amount of discounts can be found here

Once you have claimed, you will get a claim reference number. HMRC will then check your claim is correct and pay the claim amount by BACs into the bank account you gave when you registered, within five working days.

Keeping Record: To show the link between the number of diners who got the discount and the total value of scheme discount being claimed for in each claim period, for each day, you must keep is a record of the:

  • total number of diners who have used the scheme discount in your establishment
  • total value of all eat in food and non-alcoholic drink sold where the scheme discounts were given
  • total value of scheme discounts you have given and claimed for

Paying tax: You will still need to pay VAT based on the full amount of your customer’s bill before the scheme discount is applied. This amount needs to be reflected in the correct VAT return for the period the transaction took place.

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our website.

Job Retention Bonus Update

The Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021.

Further information has been released on the scheme including confirmation on eligibility and when you will be able to claim.

Eligibility

Employers will be able to claim for employees who:

  • were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for the scheme;
  • have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021;
  • have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI;
  • have up-to-date RTI records for the period to the end of January 2021; and
  • are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim.

Employers can claim the Job Retention Bonus for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies. The above criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked and rate of pay.

Claiming

From February 2021, employers will be able to claim the Job Retention Bonus through GOV.UK. More details about this process will be published in guidance by the end of September 2020.

What should you do now if you intend to claim the Job Retention Bonus

Employers should ensure that their employee records are up-to-date, including accurately reporting their employee’s details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system. Employers should also ensure that all of their CJRS claims have been accurately submitted and any necessary amendments have been notified to HMRC.

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our website.

Making Tax Digital programme to be extended

HMRC has announced that the Making Tax Digital programme will be extended to firms with turnover below the VAT threshold of £85,000 from April 2022.

Taxpayers who file self-assessment returns for business or property income of more than £10,000 a year will be brought into the programme the following year.

A new ambitious plan to digitise tax administration will extend compulsory MTD filing to all VAT-registered traders from April 2022 and to most self-employed traders and individual landlords from April 2023.

On 21 July the Treasury set out a first draft of the government’s ten-year plan to modernise the tax administration system. This includes restarting the making tax digital (MTD) program which had ground to a halt in the face of Brexit and the coronavirus pandemic.

MTD for VAT

Currently the MTD regime is compulsory for VAT registered traders who are required to be VAT registered as they have taxable turnover of over £85,000. An estimated one million VAT registered businesses with lower annual turnover are not required to enter the MTD regime as they are automatically exempt on the basis of their low VATable sales level.

The Treasury, confirmed that all VAT registered traders will have to use MTD compatible software to file their VAT returns with effect for VAT periods starting on and after 1 April 2022. They will also be required to keep the VAT records in a digital format.

MTD for income tax

The MTD programme was originally planned to start with quarterly reporting for income tax, but this was delayed.

The revised plan now sets a goal of April 2023 for micro self-employed businesses and unincorporated landlords to commence quarterly reporting through MTD software, and to keep digital records. Around four million unincorporated businesses and landlords with annual turnover exceeding £10,000 per year will be drawn into MTD.

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our website.

Job Retention Bonus

The Chancellor announced the introduction of the Job Retention Bonus.

This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31‌‌‌ ‌January 2021. The bonus will provide additional support to retain employees.

To be eligible, employees will need to:

  • earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
  • have been furloughed at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
  • have been continuously employed up until at least 31‌‌‌ ‌January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31‌‌‌ ‌January has been received. More information about this scheme will be available by 31‌‌‌ ‌July and full guidance will be published in the Autumn.


Other new measures announced

The Chancellor also announced other measures, including:

  • the Eat Out to Help Out Scheme – during August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes and other establishments that have registered
  • VAT reduction – from 15‌‌‌ ‌July until 12‌‌‌ ‌January 2021, the UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos
  • an increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland – increasing the threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31‌‌‌ ‌March 2021.

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our website.

Changes To The Coronavirus Job Retention Scheme

Changes announced by the Chancellor stated that in June and July the furlough scheme will continue as before, but employers will be asked to cover National Insurance and employer pension contributions in August.

By September, businesses will pay 10% of wages for furloughed staff, and in October 20%, the UK chancellor said.

This means the subsidy will taper off from August, with businesses expected to pay a greater share of their staff salaries, starting with covering National Insurance and pension contributions.

From September the government will cover only 70% of salaries, to a cap of £2,190 and from October it will pay 60%, to a cap of £1,875. Employers will make up the shortfall to get salaries back to 80% of pre-Covid lockdown levels.

After that, the scheme will close.


Flexible Furloughing of employees

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3-week period prior to 30 June.

This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.

See: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

We hope you find this information useful and we will continue to keep you updated on any further developments through email newsletters, social media and our websit.