"Deferral of VAT payments."

On 24 September 2020, the Chancellor announced a change to the scheme for those businesses that chose to defer their VAT payment due between 20 March 2020 & 30 June 2020.

Previously the payment was due, in full, by 31 March 2021. If you can still do so, you should make payment by this date.

Under the change:

• businesses now have the option to pay over a longer period,
• smaller payments can be made, interest free, until 31 March 2022,
• you will need to opt-in to the scheme by the end of March 2021.

To view the publication, you can visit the HMRC website or

you can get in touch with us if you would like some help.

"MTD for income tax & VAT."

As you may have already heard, HMRC is steadily introducing a new way of reporting taxes....MTD. The purpose being to transform tax administration so that it is more efficient, effective & easier for taxpayers to get their tax right.

Income tax

The self-employed & landlords with an annual income of £10,000 or more will be required to submit their tax liability through MTD from 6 April 2023.

VAT

Currently, VAT-registered businesses with a taxable turnover above £85,000 (VAT threshold) will be required to submit their returns through MTD software.

From 6 April 2022, all VAT-registered businesses with a taxable turnover below £85,000 will also be required to make the switch.

However, you can submit your returns voluntarily through the MTD now.

To learn more about these schemes you can visit the HMRC website or why not send us a message.

"MTD for corporation tax arriving 2026 but could be later."

The scheme is still in the consultation process, due to end on 5 March 2021.

For the time being, here's what we know:

• the scheme will compulsory for all entities that pay corporation tax and there's no minimum threshold.
• each entity will be required to submit a report each quarter detailing their income and expenses.
• At present, the scheme is scheduled to go live from 2026 (most likely April). However this could be pushed back to a later time.
• There will be a pilot scheme operating from 2024 where businesses can join voluntarily.

We'll follow the progress of this scheme and keep you updated on any changes.

You can read more on this at HMRC website.

"AIA cap to be extended."

The £1m annual investment allowance (AIA) was brought in on 1 January 2019, it was due to revert back to the pre-2019 level of £200,000 next year. However, after a call for an extension owing to the economic climate, HMRC has now extended the allowance till 1 January 2021.

You can chat to us for guidance AIA or visit the HMRC website.

"Tackling abuse of the CIS ."

HMRC has published a proposed reform of the Construction Industry Scheme (CIS). The scope of which is to tackle the abuse of the CIS. The proposed reforms are due to take effect from 6 April 2021, the main points being:

• HMRC will be allowed to amend the CIS repayment claimed on the EPS (Employer Payment Summary) submissions
• increase the amount on penalties for supplying false information to HMRC relating to CIS
• changing the definition of deemed contractors - the new rule will require businesses to look at their construction expenditure more regularly. In the case where the cumulative expenditure is above £3m for the previous 12 month period, the business will have to register for the CIS as a contractor and begin operating CIS on future payments to a sub-contractor.

You can contact us if you wish to know more or visit the HMRC website.

"IR35 , Off-payroll working changes."

The IR35 changes were originally due to commence 6 April 2020. However due to pandemic a delay was introduced and it will now commence 6 April 2021. Presently, the off-payroll rules are if you're:

• a worker and your client is in the public sector, it's the client's responsibility to decide your employment status;
• a worker and your client is in the private sector, it's your intermediary's responsibility to decide your own employment status.

 From April 2021, the IR35 changes will apply as follows:

• all public sector authorities, medium and large private sector clients will be responsible for deciding your employment status;
• if you're a worker provding services to small business clients in the private sector. The worker's intermediary will still be responsible for determining the employment status of the worker.

To see if you're affected by these changes see the HMRC website or get in touch with us and we'll be happy to discuss this further.