Covid-19 - Personal taxes and finances Archives - Grunberg & Co

Working from home tax relief: 800,000 employees saved around £125 per year

admin — Thu, 01 Jul 2021 15:54:26 +0000

HM Revenue and Customs (HMRC) revealed that since April, nearly 800,000 employees who have been working from home during the pandemic claimed tax relief on eligible household costs.

For these individuals, their saving is worth up to £125 per annum.
Eligible employees can claim a year’s entitlement if their employer has told them to work from home – even if it has been for one day during the tax year.
If an employee has returned to working in an office since the start of April or is preparing to return, they can still claim the tax relief and benefit from the full year’s relief for 2021-22.
Unsure how to claim this tax relief?
Luckily the process is quick and easy and is done through HMRC’s online portal.
Employees just need to apply themselves to receive the tax relief. Once their application is approved, their tax code is automatically adjusted for the 2021-22 tax year and will receive the tax relief directly through their salary.
Please note, agents cannot use the online portal to apply on their client’s behalf.
For more information or advice on matters relating to tax relief, please contact our experts today.

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Preparing for the end of the Stamp Duty Holiday

admin — Wed, 23 Jun 2021 12:41:42 +0000

Introduced in July 2020, the Stamp Duty Land Tax (SDLT) Holiday has helped hundreds of homeowners and investors to reduce the cost of purchasing a new property.
However, the higher SDLT thresholds will change from 1 July increasing the cost of buying or transferring a home.
From the beginning of July, the SDLT rules will change so that the threshold at which tax is paid falls from £500,000 to £250,000.
This new rate of SDLT will remain in place until 1 October 2021, when it will fall again to just £125,000.
The new rates will be as follows:

Property or lease premium or transfer value from 1 July	SDLT rate
Up to £250,000	0 per cent
The next £675,000 (the portion from £250,001 to £925,000)	5 per cent
The next £575,000 (the portion from £925,001 to £1.5 million)	10 per cent
The remaining amount (the portion above £1.5 million)	12 per cent

Property or lease premium or transfer value from 1 October	SDLT rate
Up to £125,000	0 per cent
The next £125,000 (the portion from £125,001 to £250,000)	2 per cent
The next £675,000 (the portion from £250,001 to £925,000)	5 per cent
The next £575,000 (the portion from £925,001 to £1.5 million)	10 per cent
The remaining amount (the portion above £1.5 million)	12 per cent

Despite the changes, first-time buyers paying £300,000 or less for a residential property will continue to pay no SDLT and will only pay five per cent on properties worth between £300,000 and £500,000.
The latest changes are likely to subdue the market somewhat, as they will increase the costs of most transactions, especially given that the average UK house price in April 2021 was £251,000 according to the Office for National Statistics.
For landlords and investors, the impact will be far greater as they must pay an additional three per cent surcharge on each rate if they own more than one property already.
The costs could be even greater if the investor is non-resident in the UK due to the new two per cent surcharge for overseas buyers of UK property that has been introduced from April on top of the existing three per cent additional home surcharge.
For them, from 1 July, they could pay the following rates on property purchases or transfers if they already own a property in the UK:

Property or lease premium or transfer value from 1 July	SDLT rate
Up to £250,000	5 per cent
The next £675,000 (the portion from £250,001 to £925,000)	10 per cent
The next £575,000 (the portion from £925,001 to £1.5 million)	15 per cent
The remaining amount (the portion above £1.5 million)	17 per cent

Homebuyers, landlords and property investors need to carefully consider these changes as they could have a substantial impact on property values.
If you need advice on the upcoming changes to SDLT, please speak to a member of our team.

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Parents can continue to claim tax-free childcare if income falls below threshold while on Covid-19 support schemes, it has been confirmed

admin — Tue, 27 Oct 2020 16:47:53 +0000

Working parents whose income falls below the minimum threshold for tax-free childcare as a result of the coronavirus will still be eligible for support, the Government has announced.
The change comes after parents raised concerns that they would fall short of the income threshold – usually equal to 16 hours per week at the National Minimum Wage (NMW) – if they were placed on the Government’s new Job Support Scheme (JSS) or received grants through the extended Self-Employed Income Support Scheme (SEISS).
It has now been confirmed that from 01 November 2020, any parent receiving support through one of the above schemes will continue to receive childcare entitlements, including the 30 hours offer and tax-free childcare, “even if their income levels fall below the threshold temporarily whilst on these schemes”.
Under the tax-free childcare scheme, the Government will pay you £2 for every £8 you deposit into your online childcare account to pay for approved childcare, such as childminders, nurseries, nannies, after school clubs and play schemes.
Commenting on the announcement, Karl Khan, Director General HMRC Customer Service said: “HMRC remains ready to help all customers as part of the government’s response to the pandemic, including those who benefit from Tax-Free Childcare.
“We want everyone to get the money they are entitled to, and there’s a range of support available to help families with childcare costs. We’d encourage parents to check the Childcare Choices website to see which offers will work best for them.”
For more personal tax support and advice, please get in touch with our expert team today.

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Key dates for Coronavirus support schemes, tax and Companies House

admin — Fri, 14 Aug 2020 14:28:36 +0000

With numerous Government schemes open to businesses and individuals to help deal with the impact of the Coronavirus outbreak, there are more than 60 key dates to be aware of in the coming months where these schemes will end or change, plus the usual HMRC and Companies House deadlines.
To help you keep track of these we have created this useful key dates guide for you to download.

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Paying for COVID-19: Government begins exploring tax take back

admin — Wed, 22 Jul 2020 09:15:27 +0000

The Chancellor, Rishi Sunak, has commissioned the Office of Tax Simplification (OTS) to undertake a review into how Capital Gains Tax (CGT) is paid by small businesses and individuals.
It is estimated that the UK Government has already incurred hundreds of billions of pounds in costs in its economic fight against the Coronavirus and it is clear that it will need to recover this spending in some way.
The decision to commission a review of CGT has left many concerned of a ‘stealth wealth tax’, using CGT as a means of increasing the tax bill of small businesses and those with high-value assets.
The OTS investigation into CGT is said to be wide-ranging and will include a look at all of the allowances, exemptions and reliefs associated with CGT, the treatment of losses within the tax and its interaction with other levies, such as inheritance and income tax. This review will also look at whether current rules alter taxpayer’s behaviour and encourage inappropriate actions to be taken.
Many fear that the extensive free rein given to the OTS may be a precursor for big changes in a Budget later this year.
One suggestion is that the Chancellor may be seeking an equalisation of CGT and income tax rates. At present, the highest rate of CGT for most assets, apart from property, is 20 per cent, whereas the top rate of income tax is 45 per cent.
As an alternative, some have suggested that the Chancellor could seek a flat rate of CGT rather than the five rates that currently exist (0, 10, 18, 20 or 28 per cent).
The review may also look to close loopholes and ambiguities in existing reliefs to ensure that taxpayers do not get an advantage from structuring their estate and disposals around CGT.
Another area of potential reform is the capital gains uplift, which currently applies when a person inherits assets, which allows assets to be acquired at the market value on the date of death, rather than the amount originally paid.
This could tie in with the Government’s previous review of Inheritance Tax (IHT), during which the OTS recommended the uplift be removed in cases where IHT exemptions or reliefs apply.
IHT continues to be an area of contention and one that has been explored numerous times. However, it may also be in the spotlight as the Government seeks to recover the multi-billion-pound cost of COVID-19.
As part of the OTS investigation, Rishi Sunak has also tasked the OTS with looking at how CGT is paid by small businesses. This will include “the position of unincorporated businesses and standalone owner-managed trading or investment companies”.
It is important that all taxpayers continue to monitor the Government’s plans for taxation and seek advice if any future changes affect their financial affairs or the passing of wealth to future generations.

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Coronavirus apprenticeships guidance updated

admin — Thu, 16 Jul 2020 10:17:44 +0000

Updated guidance from the Department for Education on apprenticeships during the Coronavirus crisis has been published and contains a number of announcements relating to employment arrangements for apprentices.
These updates include confirmation that:

Apprentices aged 19 and older can begin to resume on-site training;
Apprentices who are made redundant but continue their study element can claim Universal Credit if they meet all eligibility criteria;
A dedicated service for redundant apprentices will be launched shortly; and
Temporary flexibility suspending the requirement that level two apprentices study and attempt level two functional skills assessment has been extended until 31 December 2020.

Full details of these updates can be read here.
The announcements come shortly after the Chancellor announced additional funding for apprenticeships at the Summer Economic Update on Wednesday 8 July 2020.
The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly-hired apprentice aged 25 or older.
The new funding is in addition to schemes already in place to support employers in taking on apprentices.

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HM Revenue & Customs clarifies repayments of Corporation Tax and anticipated losses

admin — Thu, 25 Jun 2020 08:07:35 +0000

With businesses across many sectors having been hit hard by the Coronavirus crisis, HM Revenue & Customs (HMRC) has now said it will, in exceptional circumstances, consider claims for Corporation Tax repayments for prior periods based on anticipated losses, even before the conclusion of the current accounting period.
The clarification came in an update to HMRC’s internal Company Tax Manual.
Repayment of Quarterly Instalment Payments (QIPs) will require companies to submit evidence in support of claims and to demonstrate the amount of the losses they expect to incur.
Similar measures are in place in respect of the repayment of Corporation Tax paid on the normal due date for payment, which tends to be nine months and one day following the end of the accounting period.
The guidelines make clear that repayments will only be made in exceptional circumstances and that claims will be made based on the specific circumstances of each application.
While certain sections of the guidance are redacted, the Institute of Chartered Accountants in England and Wales (ICAEW) suggest that businesses provide the following information to HMRC in support of an application:

Up-to-date profit and loss forecasts
Management accounts and tax calculations
Details reasoning and assumptions underpinning the figures submitted
Reports from the Board of Directors and public statements concerning the company’s trading position
Evidence that the forecasts submitted are the same as those used for internal planning
Confirmation that the company does not expect exceptional income or gains during the current accounting period
External evidence demonstrating the circumstances involved are unlikely to change in the short term.

The issues involved in claiming repayments of Corporation Tax are complex and the evidence requirements are stringent, meaning the seeking of professional advice in advance of any claim is vital.

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The P11D deadline is drawing nearer – what you need to report

admin — Wed, 17 Jun 2020 17:26:00 +0000

If you run a business, you might provide benefits, or non-exempt expenses, to some or all of your employees. If you do, it is important to be aware of the annual P11D form that needs to be completed and sent to HM Revenue & Customs (HMRC) by the deadline of 6 July 2020.
Before doing so, you will need to know what you need to report and if you need to pay tax and National Insurance (NI) on the benefits or expenses.
A P11D is a form used to report benefits provided and expense payments made to employees, by employers that are not putting it through the payroll.
The annual form allows businesses to report benefits that employees have received from their employer in addition to their salary, for example, company cars, health insurance, living accommodation and beneficial loans.
There are some benefits which can be provided tax-free, such as the provision of a mobile phone, social functions for staff and other ‘trivial benefits’, although there are various conditions that need to be met first.
Understandably, the whole process of filling out the forms for P11D poses a significant burden for business owners and managers.
To further complicate the task, the rules governing the taxation of different expenses and benefits change regularly and each is subject to their own separate rules. For the full list of expenses and benefits that you need to report, please click here.
Completing P11D returns can be time-consuming and complex, especially if you cover a lot of expenses or have a large workforce, which is why it makes sense to outsource this task to specialists.
To find out how we can relieve the burden on your business, please speak to us.

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Stamp duty: Government relaxing three-year rule for reclaiming surcharge for exceptional circumstances in relation to COVID-19

admin — Mon, 15 Jun 2020 16:22:25 +0000

The Government is relaxing the three-year rule for reclaiming the Stamp Duty Land Tax (SDLT) surcharge for exceptional circumstances where a property could not be sold during the three-year time limit because of the impact of the coronavirus pandemic.
Under the SDLT rules, individuals that purchase a new property before selling their main residence are subject to a three per cent surcharge, which can be reclaimed if they sell their old property within three years.
However, because of the disruption caused by COVID-19, and the resulting lockdown measures, many people have been unable to sell their home before the three-year time limit expired, with the property market being temporarily put on hold.
As a result, the HM Revenue & Customs (HMRC) internal manual has been updated, and now states that claims can be made after the three year period expires only in circumstances where the time limit has expired as a result of the coronavirus pandemic. However, legislation on the change is still to be published.
The guidance states that exceptional circumstances include;

Being prevented from selling the property owing to Government guidance during the COVID-19 pandemic; or
Other action taken by a public authority preventing the sale of the property

It has also been confirmed that sellers must complete the sale of their main residence as soon as they ‘reasonably could’ after the lockdown to claim the SDLT surcharge refund, but it has not been confirmed how lenient HMRC will be on this timeframe.
The change is set to be introduced in the Finance Bill 2020, and according to industry experts, will be a permanent change.
For help and advice, contact our expert team today.

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Guidance on exceptional circumstances for higher rate SDLT refunds updated

admin — Mon, 15 Jun 2020 14:46:49 +0000

HM Revenue & Customs (HMRC) guidance that sets out the exceptional circumstances allowing homeowners to claim higher rate Stamp Duty Land Tax (SDLT) refunds beyond the usual timeframes has been updated.
The updated guidance means that homeowners in England and Northern Ireland can now claim a refund in respect of the three per cent higher rate of SDLT in circumstances when their previous home was not sold within the usual time limit of three years, as long as the three-year period ended on or after 1 January 2020.
To qualify for the refund, the previous home must have failed to sell for reasons outside of the homeowner’s control and these reasons can now specifically include “the impact of coronavirus (COVID-19) preventing the sale”.

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