April 2021 | DSK Partners LLP

Annual party benefits

Posted on April 8, 2021 by Ketan Umretiya

The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax purposes. If you meet the various criteria outlined below then there is no requirement to report anything to HMRC or pay tax and National Insurance. There will also be no taxable benefit charged to employees.

An annual function offered to staff generally is not taxable on those attending provided that the average cost per head of the function does not exceed £150.
The event must be open to all employees. If a business has multiple locations, then a party open to all staff at one of the locations is allowable. You can also have separate parties for separate departments, but employees must be able to attend one of the events.
There can be more than one annual event. If the total cost of these parties is under £150 per head, then there is no chargeable benefit. However, if the total cost per head goes over £150 then whichever functions best utilise the £150 are exempt and the others taxable.
It is not necessary to keep a running total by employee but a cost per head per function. All costs including VAT must be considered. This includes the costs of transport to and from the event, food and drink and any accommodation provided.

Note, the £150 is an exemption and not an allowance. This means that any costs over £150 per head are taxable on the full cost per head.

It is highly recommended when planning a staff party or other annual event to aim to stay within the parameters outlined above to ensure there is no additional tax cost to the party.

Source: HM Revenue & Customs Wed, 07 Apr 2021 00:00:00 +0100

Updating Self-Assessment tax returns

Posted on April 1, 2021 by Ketan Umretiya

There are special rules to follow if you have submitted a Self-Assessment return and subsequently realise you need to change it. This can happen if for example you made a mistake like entering a number incorrectly or missing information from the return.

If you filed your return online, you could amend your return online as follows:

Sign into your personal tax account using your User ID and password.
From ‘Your tax account’, choose ’Self-Assessment account’ (if you do not see this, skip this step).
Choose ‘More Self-Assessment details'.
Choose ‘At a glance’ from the left-hand menu.
Choose ‘Tax Return options’.
Choose the tax year for the year you want to amend.
Go into the tax return, make the corrections and file it again.

If you opted to file your return on paper, you will need to download a new return and fill in the pages that you wish to change and write ‘amendment’ on each page. You must also include your name and Unique Taxpayer Reference on each page and then send the corrected pages to the address where you sent your original return.

If you used commercial software to submit your Self-Assessment return, then you should contact your software provider in the first instance. If your software provider cannot help, then you should contact HMRC.

The deadline for making changes for the 2019-20 tax year using any of the methods outlined above is 31 January 2022.

If you have missed the deadline, you will need to write to HMRC instead. For example, if you found a mistake in your 2018-19 return after 31 January 2021. In the letter, you will need to say which tax year you are correcting, why you think you have paid too much or too little tax and by how much. You can claim a refund up to 4 years after the end of the tax year it relates to.

Source: HM Revenue & Customs Tue, 30 Mar 2021 00:00:00 +0100

Film and TV restart scheme

Posted on April 1, 2021 by Ketan Umretiya

The government’s £500 million scheme to kickstart film and television production entitled the Film and TV Production Restart Scheme, helps UK film and TV productions struggling to secure insurance for COVID-19 related costs.

The Scheme allows TV and film productions that have been halted or delayed by a lack of insurance to get started or restarted. Productions can receive compensation from the scheme for coronavirus related losses including filming delays from illness amongst the cast and crew.

Claims made under the Scheme can be backdated to 28 July 2020, the date the Scheme was first announced. The Scheme is available to both pre-existing eligible productions and to new eligible productions.

The funding is available to all qualifying productions made by companies where at least 50% of the production budget is spent in the UK. There is a fee to participate in the Scheme and a limit to the maximum claim allowable.

The deadline for productions to register for the Scheme and restart shooting has been extended until 31 October 2021. Claims will need to be submitted by 31 March 2022 for losses incurred up to 31 December 2021. HMRC’s guidance on the scheme has been updated to include payment terms.

Source: HM Revenue & Customs Tue, 30 Mar 2021 00:00:00 +0100

OTS recommended changes to IHT

Posted on April 1, 2021 by Ketan Umretiya

The Financial Secretary to the Treasury has written to the Office of Tax Simplification (OTS) to confirm that HM Treasury strongly supports some key recommendations on changes to Inheritance Tax.

The government announced on 23 March 2021 that it will:

change reporting regulations so that from 1 January 2022 over 90 per cent of non-taxpaying estates each year will no longer have to complete Inheritance Tax forms for deaths when probate or confirmation is required; and
make permanent the ability for those dealing with a trust or estate to provide an Inheritance Tax return without requiring physical signatures from all others involved, easing the administration burden in cases where an Inheritance Tax return is still required.

These new rules will result in dramatic changes in reporting regulations from 1 January 2022 for more than 200,000 estates every year.

It was also announced that the government will continue to work on the remaining recommendations made by the OTS: for digitisation, improving processes for lifetime and trust charges, guidance, and working with court services. Some of these are longer term in nature and will be taken forward as part of the wider Tax Administration strategy.

Source: HM Treasury Tue, 30 Mar 2021 00:00:00 +0100

£1.5bn boost for rates relief

Posted on April 1, 2021 by Ketan Umretiya

A new Business Rates relief fund will provide a £1.5 billion tranche of support to businesses outside the retail, hospitality, and leisure sectors affected by COVID-19.

Retail, hospitality and leisure businesses have not been paying rates during the pandemic as part of a 15 month-long relief which runs to the end of June this year. Many businesses that were banned from applying these reliefs have been appealing for discounts on their rates bills, arguing the pandemic represented a ‘material change of circumstance’ (MCC).

The government has rejected these claims for relief on the basis that market-wide economic changes to property values, such as from COVID-19, can only be properly considered at general rates revaluations, and will therefore be legislating to rule out COVID-19-related MCC appeals.

The government will instead provide a £1.5 billion pot that will be distributed to businesses in England affected by the pandemic and not on estimates of the impact on a property’s value. This method is designed to ensure the support is provided in the fastest and fairest way possible.

The funding will be allocated to local authorities based on the stock of properties in the area whose sectors have been affected by COVID-19. Local Authorities will use their knowledge of local businesses and the local economy to make awards.

Source: HM Treasury Tue, 30 Mar 2021 00:00:00 +0100

New support for High Streets and sea-side towns

Posted on April 1, 2021 by Ketan Umretiya

As lockdown measures begin to be eased, a new package of support measures to help high streets and coastal areas across England has been announced by the Communities Secretary Robert Jenrick. The support will be delivered via a new £56 million Welcome Back Fund.

The new funding will help councils boost tourism, improve green spaces and provide more outdoor seating areas, markets and food stall pop-ups – giving people more safer options to reunite with friends and relatives.

The funding can also be used by councils to:

Boost the look and feel of their high streets by investing in street planting, parks, green spaces and seating areas to make high streets as beautiful and welcoming as possible
Run publicity campaigns and prepare to hold events like street markets and festivals to support local businesses
Install signage and floor markings to encourage social distancing and safety
Improve high streets and town centres by planting flowers or removing graffiti

The Communities Secretary also announced that the government would allow pubs and restaurants to erect marquees and provide more outdoor space throughout the summer rather than for the 28 days currently permitted.

The government also published its response to the Parking Code Framework which will curb unfair tickets and tackle cowboy parking firms through a new, simplified appeals process. This is expected to herald the return of more motorists to high streets and town centres.

Source: HM Government Tue, 30 Mar 2021 00:00:00 +0100

5% late penalties apply from 1 April 2021

Posted on April 1, 2021 by Ketan Umretiya

Self-Assessment taxpayers that failed to pay their outstanding tax liabilities or set up a payment plan by midnight on 1 April 2021 will be charged a 5% late payment penalty charge.

Under the normal rules a 5% late payment penalty would have been charged if tax remained outstanding or a payment plan has not been set up before 3 March 2021. This extension was put in place due to the impact of the COVID-19 pandemic and gave taxpayers an extra 4 weeks to sort out their affairs before the 5% late payment penalty was levied.

Interest will also have been applied to any balance that was outstanding from 1 February 2021. The only way to stop further interest amassing is to pay any tax due in full. The current rate of late payment interest is 2.6%

If you are unable to pay your tax bill, then there are a number of options for you to defer the payment that was due on 31 January 2021. This includes an option to set up an online time to pay payment plan to spread the cost of tax due in monthly instalments until January 2022. This option is available for debts up to £30,000. If you owe Self-Assessment tax payments of over £30,000 or need longer than 12 months to pay in full, you can still apply to set up a time to pay arrangement with HMRC, but this cannot be done using the online service.

Further late payment penalties will apply if tax remains outstanding (and no payment plan has been set up) for more than 6 months after the 31 January filing deadline. From 1 August 2021 you will be charged a penalty of the greater of £300 or 5% of the tax due. If your return remains outstanding one year after the filing deadline, then further penalties will be charged from 1 February 2022.

You can appeal against any penalties that have been issued. However, you need to act fast, and the excuse must be genuine and HMRC can of course ask for evidence to support any claim. An appeal must usually be made within 30 days of receipt of the penalty.

Source: HM Revenue & Customs Tue, 30 Mar 2021 00:00:00 +0100

Month: April 2021

Annual party benefits

Updating Self-Assessment tax returns

Film and TV restart scheme

OTS recommended changes to IHT

£1.5bn boost for rates relief

New support for High Streets and sea-side towns

5% late penalties apply from 1 April 2021

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