Muras Matters: Self-Assessment Late Payment Penalties and VAT Deferral Scheme Opens

Background Although HM Revenue & Customs (“HMRC”) have previously announced that penalties for the late filing of Self-Assessment tax returns for the 2019/20 tax year will not be imposed until 28 February 2021 tax payments still remain due by 31 January 2021. As a result interest is charged on any late payments and a further 5% late payment penalty would ordinarily...

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Tax claims if working from home

Many employed persons will have spent a large chunk of the current tax year, 2020-21, working from home due to COVID restrictions. HMRC will accept a claim to cover any additional costs you may have incurred. Must be required to work from home You may be able to claim tax relief for additional household costs if you have to work at home...

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UK Pensions Bill receives Royal Assent

The UK Pensions Act will bolster protections for savers and further the government’s green agenda by supporting progress towards net zero. New powers to penalise errant bosses The Act will strengthen protections for pension savers by extending the powers of the Pensions Regulator, introducing the power to issue civil penalties of up to £1 million, alongside three new criminal offences. A tough new...

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Prospects for 2021

The short-term outlook for UK businesses operating in sectors badly affected by the present COVID lock-down directives is not good. Many cannot trade, many others are facing reduced turnover. Both will be struggling to maintain reserves – stay solvent – and cash-flow. There are strategies that affected businesses can use to reduce fixed costs and minimise demands on their hard-won cash and...

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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...

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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...

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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...

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Muras Matters: VAT Reverse Charge for Building And Construction Services Reminder

Background New VAT rules were originally due to be introduced for construction services with effect from 1 October 2019, although this commencement date was then postponed for 12 months until 1 October 2020. However, due to the coronavirus pandemic the start date was again postponed and is now due to come into effect on 1 March 2021. With effect from 1 March...

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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...

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Repay private petrol and save tax

At first sight, company cars drivers whose private fuel costs are met by their employers may seem to be onto a good thing, but there is a nasty tax hit… Enter, the Car Fuel Benefit charge. When the current tax year ends, 5 April 2021, the illustration below demonstrates how a cash payment to an employer to payback any private fuel provided...

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