Covid-19
Job Support Scheme
The Coronavirus Job Retention Scheme has been extended until 30 April 2021. Claims for furlough days in January 2021 must have been made by 15 February 2021 and for furlough days in February 2021 must be made by 15 March 2021.
HMRC are now publishing a monthly list of employers who claimed under the CJRS for periods from December onwards on GOV.UK. This will include from 25 February employer names, Company Registration Numbers (for those who have one) and banded amounts of how much the claim was for.
If publishing an employer’s claim details could leave someone at risk of violence or intimidation, they can request for these not to be published by completing an online application form.
Bounce Back Loan Scheme (BBLS)
The scheme is open to applications until 31 March 2021.
The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
Self Employed Income Support Scheme (SEISS)
The deadline to claim for the third SEISS grant was 29 January 2021. If you haven’t claimed for any of the first three grants you can still claim the fourth grant, details of which are expected to be announced in the Spring Budget on 3 March 2021. To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
- have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- declare that they intend to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to coronavirus
- were previously trading but are temporarily unable to do so due to coronavirus
Taxes
31 January Self Assessment Deadline
HMRC have announced that any individuals filing a self assessment tax return that is filed by 28 February 2021 will not receive a late filing penalty.
Interest will still be charged on any tax liabilities from 1 February however taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. But they will need to file their 2019 to 2020 tax return before setting up a time to pay arrangement.
Late Payment Surcharge
HMRC has also recently announced that Self Assessment customers will not be charged the initial 5% late payment penalty if they pay their tax or make a Time to Pay arrangement by 1 April 2021.
So if you are unable to pay in full the tax that was due on 31 January 2021, contact HMRC to set up a time to pay arrangement to avoid a 5% surcharge on the tax due by 1 April 2021.
IR35 April 2021
Where a contractor provides their services through a PSC, from 6 April 2021 it is the responsibility of all medium and large-sized private and voluntary sector organisations, and all public sector organisations, to assess the contractor’s employment status for tax purposes. If the rules apply, the client organisation, or the agency or third party paying the contractor’s PSC, is then responsible for accounting for employment taxes and NICs.
Small non-public sector organisations are not affected by the changes, and the contractor’s company or other intermediary remains responsible for determining if the off-payroll working rules apply and paying the relevant tax. Workers and agencies may ask small non-public sector organisations they contract with, to confirm that their organisation qualifies as ‘small’.
Company Car Taxes
Currently cars emitting 50g/km or less are eligible for a claim under first year allowances meaning that the entire cost of the vehicle can be claimed against business profits. From 6 April 2021 this will be restricted to only those vehicles with zero CO2 emissions i.e. fully electric cars.
Example 1 – car purchased now with emissions of 40g/km with a list price of £40k and sold in three years’ time for £20k
| Year 1 | Year 2 | Year 3 | Total | |
| Tax cost | £40,000 | £0 | -£20,000 | £20,000 |
| Tax saving | £7,600 | £0 | -£3,800 | £3,800 |
Example 2 – same car purchased in May 2021
| Year 1 | Year 2 | Year 3 | Total | |
| Tax cost | £7,200 | £5,904 | £6,896 | £20,000 |
| Tax saving | £1,368 | £1,122 | £1,310 | £3,800 |
The tax saving remains the same however from April 2021 the savings will be spread over the years of ownership rather than available up front.
Benefit in Kind on Company Cars
On 6 April 2020, HMRC introduced 11 new bands for ultra-low emission vehicles (ULEVs) including a separate zero emissions band. If a car has a CO2 emission figure of 1-50g/km you will now need to provide the car’s zero emission mileage, this is the distance that the car can travel in miles on a single electric charge, in order to work out any Benefit in Kind charges that apply.
Other
Student Loans Thresholds
Student loan repayments from 6 April 2021 will be calculated as follows:
- Plan 1 – £19,895, earnings above this threshold will continue to be calculated at 9%.
- Plan 2 – £27,295, earnings above this threshold will continue to be calculated at 9%.
National Minimum Wage
From April 2021 the following changes to the National Minimum Wage and National Living Wage will apply:
| Rate from April 2020 | Rate from April 2021 | Increase | |
| National Living Wage | £8.72 | £8.91 | 2.2% |
| 21-22 Year Old Rate | £8.20 | £8.36 | 2.0% |
| 18-20 Year Old Rate | £6.45 | £6.56 | 1.7% |
| 16-17 Year Old Rate | £4.55 | £4.62 | 1.5% |
| Apprenticeship Rate | £4.15 | £4.30 | 3.6% |
| Accommodation Offset | £8.20 | £8.36 | 2.0% |