Month: September 2021

Government announces winter COVID plan

Posted on by Rana Zubair

The Prime Minister, Boris Johnson has set out the government’s autumn and winter plan for managing Covid. 

The government is aiming to sustain the progress made and prepare the country for future challenges, while ensuring the National Health Service (NHS) does not come under unsustainable pressure.

The government plans to achieve this by:

  • Building our defences through pharmaceutical interventions: vaccines, antivirals and disease modifying therapeutics.
  • Identifying and isolating positive cases to limit transmission: Test, Trace and Isolate.
  • Supporting the NHS and social care: managing pressures and recovering services.
  • Advising people on how to protect themselves and others: clear guidance and communications.
  • Pursuing an international approach: helping to vaccinate the world and managing risks at the border.

This is known as Plan A. There are of course a number of variables that could change the expected outlook including the outbreak of new variants and other seasonal respiratory diseases such as the flu.

If the data suggests the NHS is likely to come under unsustainable pressure, the government has prepared a Plan B for England. It is hoped that this plan will not be required but the plan contains certain measures which can help control transmission of the virus while seeking to minimise economic and social impacts. 

This includes:

  • Communicating clearly and urgently to the public that the level of risk has increased, and with it the need to behave more cautiously.
  • Introducing mandatory vaccine-only COVID-status certification in certain settings.
  • Legally mandating face coverings in certain settings.
Source: HM Government Sun, 19 Sep 2021 00:00:00 +0100

Outdoor measures to be made permanent

Posted on by Rana Zubair

Temporary measures that have given a huge boost to high streets and hospitality during the pandemic could be made permanent following a public consultation launched in September 2021.

From marquees being put up in pub grounds, to street markets operating all year round, permitted development rights that have allowed people to enjoy al fresco dining and visit town centres and tourist attractions as the nation reopened from the pandemic.

These planning reforms also gave businesses and councils a lifeline to operate alongside the right to regenerate and new licensing arrangements.

The government is aiming to make a number of these permanent so that people can continue to enjoy outdoor hospitality and local attractions, and businesses can innovate, as we build back better from the pandemic. The public will now be able to give their views on the proposed reforms, so they can continue to benefit everyone in the future.

These changes will be welcomed by the hospitality trades badly affected by COVID restrictions.

Now we just need good weather in the coming winter months so that these relaxations can be fully exploited by affected traders. 

Source: Other Mon, 20 Sep 2021 00:00:00 +0100

Do tax-payers need to register for Self-Assessment

Posted on by Rana Zubair

There are a number of reasons why a taxpayer needs to complete a Self-Assessment return. This includes if they are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or property.

Taxpayers that need to complete a Self-Assessment return for the first time should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October following the end of the tax year for which a Self-Assessment return needs to be filed.

In certain circumstances, HMRC also asks taxpayers to complete tax returns. HMRC has an online tool that can help taxpayers ascertain whether they are required to submit a Self-Assessment return.

The list of taxpayers that are likely to be required to submit a Self-Assessment return includes:

  • The self-employed;
  • Taxpayers who had £2,500 or more in untaxed income;
  • Those with savings or investment income of £10,000 or more before tax;
  • Taxpayers who made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax;
  • Company directors – unless it was for a non-profit organisation (such as a charity) and you didn’t get any pay or benefits, like a company car;
  • Taxpayers whose income (or that of their partner’s) was over £50,000 and one spouse/partner claimed Child Benefit;
  • Taxpayers who had income from abroad that they needed to pay tax on;
  • Taxpayers who lived abroad and had a UK income;
  • Income over £100,000.
Source: HM Revenue & Customs Tue, 14 Sep 2021 00:00:00 +0100

Class 1 NIC changes extend to Class 1A contributions

Posted on by Rana Zubair

It is important to bear in mind that the 1.25% increase in National Insurance contributions (NICs) for 2022-23 will apply to National Insurance Class 1 and Class 4 contributions from April 2022. This means that the increase will apply to Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs. Those above State Pension Age are not impacted by the April 2022 changes although see closing comments on the new Levy from April 2023.

Smaller employers who benefit from the NIC employment allowance may not be affected by the increase in employer secondary Class 1 contributions if their NI bill is covered by the allowance. The employment allowance currently allows eligible employers to reduce their National Insurance liability by up to £4,000 per year. The allowance is only available to employers that have employer NIC liabilities of under £100,000 in the previous tax year.

The employment allowance cannot be used against Class 1A or Class 1B NICs liabilities and accordingly, the 1.25% increase will represent a real cost even for small employers whose Class 1 NIC bill is covered by the employment allowance.

From April 2023, these increases will be incorporated into a new ringfenced Health and Social Care Levy of 1.25%. The levy will apply to those who pay Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs and will also be extended to those over State Pension age who are in work. The NIC rates will revert to their current level, but the increase will of course remain by way of the new levy.

Source: HM Revenue & Customs Tue, 14 Sep 2021 00:00:00 +0100

Dental Associates tax status update

Posted on by Rana Zubair

HMRC has, for many years, accepted that associate dentists are generally treated as self-employed. These agreements have been approved by the British Dental Association (BDA) and the Dental Practitioners Association (DPA) and are quoted in HMRC’s manuals.

HMRC’s manuals state that ‘these agreements relate to dentists practising as associates in premises run by another dentist. Where these agreements are used and the terms are followed, the income of the associate dentist is assessable under trading income rules and not as employment income. In these circumstances the dentist is liable for Class 2/4 NICs and not Class 1 NICs.’

It has now been confirmed that this specific guidance for Associate Dentists will be withdrawn with effect from 6 April 2023, and after this date the status of new and ongoing Associate Dentist engagements should be considered in line with standard employment status checks. 

This change should not impact the self-employed status of the majority of associate dentists but is in line with HMRC’s goal to stop making reference to third party advice in their own guidance. HMRC has also confirmed that they will not be using the withdrawal of the guidance as a reason to open retrospective enquiries into periods prior to 6 April 2023.

Source: Other Tue, 14 Sep 2021 00:00:00 +0100

Capped social care costs from October 2023

Posted on by Rana Zubair

The government has announced new plans to cap social care costs in England from October 2023. This change is expected to see the introduction of a new £86,000 cap on care costs across an individual’s lifetime.

There will also be the following measures of financial assistance for those without substantial assets:

  • Anyone with less than £20,000 of assets will not have to pay anything towards their care from their savings or the value of their home.
  • People with between £20,000 and £100,000 of assets will be eligible for some means-tested financial support on a sliding scale. 
  • The new upper capital limit of £100,000 is more than four times the current limit of £23,250. This means more people will be eligible for some means-tested Local Authority support.

If someone’s assets are over £100,000 then full fees must be paid. However, the maximum that a person will have to pay over their lifetime towards personal care costs will be £86,000 as a result of the new cap. If the payment of these fees means that their remaining assets fall below £100,000 then some further financial support should be available. Once the £86,000 cap is reached, Local Authorities will pay for all eligible personal care costs.

Individuals may choose to “top up” their care costs by paying the difference towards a more expensive service, but this will not count towards the cap. There is also an important exception for ‘living costs’ which could amount to additional significant costs. There will be a lot more detail on these changes to come and of course the old limits will continue for the next 2 years, and any monies paid will not be part of the new cap. 

Source: HM Government Tue, 14 Sep 2021 00:00:00 +0100

Pension triple-lock abandoned for one year

Posted on by Rana Zubair

The government has confirmed that its triple-lock guarantee on pensions is to be abandoned for one year. The guarantee was first introduced in 2010 and has remained in place until now. This guarantee has seen the full yearly State Pension increase by over £2,050 in this period.

The triple-lock is the mechanism used to calculate increases to the state pension each year. Under the triple-lock guarantees the basic state pension rises by whichever is the highest out of average earnings growth, inflation or 2.5%.

The government is concerned that the growth in earnings will be between 8% and 8.5% and has decided that setting aside for one year the use of average earnings growth figures for State Pensions would be prudent. This large growth figure has been caused by the unprecedented fluctuations to earnings caused by the COVID-19 pandemic.

The other two elements of the triple-lock will remain in place, meaning that the State Pension will be uprated by the higher of inflation or 2.5%.

The government has argued that this pause in the triple-lock is the fairest approach for both pensioners and younger taxpayers. However, this decision will leave many of those in receipt of the State Pension deeply disappointed with this decision and worried that this is the start of further broken promises.

It had been rumoured for quite some time that HM Treasury was exploring ways to suspend the triple-lock as it became apparent that the earnings growth figure would appear to be artificially high.

Source: Department for Work & Pensions Tue, 14 Sep 2021 00:00:00 +0100

Budget date announced

Posted on by Rana Zubair

The Chancellor of the Exchequer, Rishi Sunak has confirmed that the next UK Budget will take place on Wednesday, 27 October 2021. This will be the Chancellor’s third Budget and the first one to revert back to the Autumn Budget schedule that was interrupted first by Brexit related issues and then by the coronavirus pandemic. It means that this year, 2021, will see 2 Budget’s the first that took place in March and the second that has been scheduled for October.  

Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s speech in October.

The Budget will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.

The Chancellor also confirmed that the 27 October 2021 will also see the government spending plans set out under the Spending Review 2021. The three-year review will set UK government departments’ resource and capital budgets for 2022-23 to 2024-25 and the devolved administrations’ block grants for the same period.

Source: HM Treasury Tue, 14 Sep 2021 00:00:00 +0100

Back to school – help with childcare costs

Posted on by Rana Zubair

As children have returned to school, HMRC is reminding parents that they may be eligible for Tax-Free Childcare (TFC) to help pay for breakfast and after school clubs.

The TFC scheme can help parents of children aged up to 11 years old (17 for those with certain disabilities). The TFC scheme helps support working families with their childcare costs. There are many registered childcare providers including childminders, breakfast and after school clubs and approved play schemes signed up across the UK. Parents can pay into their account regularly and save up their TFC allowance to use during school holidays. 

The TFC scheme provides for a government top-up on parental contributions. For every £8 contributed by parents an additional £2 top up payment will be funded by Government up to a maximum total of £10,000 per child per year. This will give parents an annual savings of up to £2,000 per child (and up to £4,000 for disabled children until the age of 17) in childcare costs. 

The TFC scheme is open to all qualifying parents including the self-employed and those on a minimum wage. The scheme is also available to parents on paid sick leave as well as those on paid and unpaid statutory maternity, paternity and adoption leave. In order to be eligible to use the scheme parents will have to be in work at least 16 hours per week and earn at least the National Minimum Wage or Living Wage. If either parent earns more than £100,000, both parents are unable to use the scheme.

HMRC’s Director General for Customer Services, said:

'As your children head back to school this autumn, don’t miss out on the opportunity to receive your 20% top-up to help pay for their childcare. It is quick and easy to sign up, just search ‘tax-free childcare’ on GOV.UK.'

Source: HM Revenue & Customs Mon, 06 Sep 2021 00:00:00 +0100

Deadline for notifying an option to tax (VAT) land and buildings

Posted on by Rana Zubair

There are special VAT rules that allow businesses to standard rate the supply of most non-residential and commercial land and buildings (known as the option to tax). This means that subsequent supplies by the person making the option to tax will be subject to VAT at the standard rate.

HMRC had temporarily changed the time limit from 30 to 90 days for notifying an option to tax land and buildings during coronavirus. This extension applied to decisions made between 15 February 2020 and 31 July 2021. This extension has now ended.

HMRC has also confirmed that the temporary change, introduced as a result of the pandemic, to allow options to tax to be signed electronically has now been made permanent. HMRC requires evidence that the signature is from a person authorised to make the option on behalf of the business.

The ability to convert the treatment of VAT exempt land and buildings to taxable can have many benefits. The main benefit is that the person making the option to tax will be able to recover VAT on costs (subject to the usual rules) associated with the property including the purchase and refurbishment of the property.

However, any subsequent sale or rental of the property will attract VAT. Where the purchaser or tenant is able to recover the VAT charged this is not normally an issue. However, where the purchaser / tenant is not VAT registered or not fully taxable (such as bank) the VAT can become an additional (non-recoverable) cost. Once an option to tax has been made it can only be revoked under limited circumstances.

Source: HM Revenue & Customs Mon, 06 Sep 2021 00:00:00 +0100
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