Category Archives: News

New UK subsidies to replace EU State Aid

The following announcement provides encouragement that a replacement for the EU State Aid process is in development. Details from a recent Government press release are set out below.

A new UK-wide system for providing more flexible and tailored financial support to businesses has been set out under plans by the Business Secretary, taking advantage of the UK’s newfound freedoms as an independent trading nation.

The new subsidy control system, which will be the long-term replacement for the EU’s prescriptive state aid regime, will allow the UK to be more dynamic in providing support to businesses, including in innovative, R&D-focused industries, to encourage job creation and growth across all parts of the UK.

Previously, public authorities had to follow...

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Current tax year will still end 5 April 2021

It is doubtful that HMRC will change the tax year end date. The current tax year will therefore come to an end on 5 April 2021.

Which means that tax-payers still have two months (February and March 2021) to take advantage of any tax planning strategies that may advantage their tax liabilities for 2020-21.

As COVID disruption is likely to take most of 2021 to unwind – and may spill over to 2022 – any action you can take to reduce a drain on cash flow by saving tax should be considered.

For example:

  • If your self-employed business income has dropped significantly during 2020-21, any tax losses created may be available to carry back to previous tax years when...
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Tax office moves the penalty spot

During the last week of January, HMRC finally accepted that many tax-payers would not make the filing deadline – 31 January 2021 – for their 2019-20 self-assessment tax return; due, in the main, to continuing COVID disruption.

As a gesture, they have confirmed that:

Self-Assessment tax-payers who cannot file their tax return by the 31 January 2021 deadline will not receive a late filing penalty if they file online by 28 February.

Whilst this a welcome recognition of the difficulties many tax-payers face as they struggle with lock-down or are actually infected by the virus, the filing deadline has not changed, only the date from which late filing penalties will apply.

Accordingly, any tax or NIC due on...

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Reminder of CIS VAT changes

Contractors and subcontractors registered for VAT and the Construction Industry Scheme will need to use the VAT reverse charge process for building and construction services from 1 March 2021.

VAT registered subcontractors affected by this change will no longer add VAT to their invoices to contractors. Instead, the contractors’ accounting system will need to add the deemed VAT to their VAT return on behalf of subcontractors, and at the same time, deduct the same amount as input VAT on the same return.

This will sound complicated but most accounting software can cope with the entries required. If you need help to set this up please call.

Contractors will only pay their VAT registered subcontractors the VAT-free amount invoiced,...

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