Late payment penalties for Self Assessment waived until 1 April


HMRC has announced that Self Assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April.

The payment deadline for Self Assessment is 31 January and interest is charged from 1 February on any amounts outstanding.

Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, because of the impact of the coronavirus (COVID-19) pandemic, HMRC is giving taxpayers more time to pay or set up a payment plan.

Taxpayers can pay their tax bill or set up a monthly payment plan online and are required to do this by midnight on 1 April to prevent being charged a late payment penalty. The online Time to Pay facility allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.

Jim Harra, HMRC’s Chief Executive, said:

‘Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments. Support is available at GOV.UK to help anyone struggling to meet their obligations.’

Internet link: HMRC press release

Business groups welcome Budget


Business groups welcomed the Chancellor’s Budget for protecting the economy now and kickstarting recovery from the COVID-19 pandemic.

Tony Danker, Director General of the CBI, said: ‘The Chancellor has gone above and beyond to protect UK businesses and people’s livelihoods through the crisis and get firms’ spending.

‘Thousands of firms will be relieved to receive support to finish the job and get through the coming months. The Budget also has a clear eye to the future; to ensure finances are sustainable, while building confidence and investment in a lasting recovery.’

Meanwhile, the British Chambers of Commerce’s (BCC) Director General, Dr Adam Marshall, commented: ‘The Chancellor has listened and acted on our calls for immediate support to help struggling businesses reach the finish line of this gruelling marathon and to begin their recovery.

‘Extensions to furlough, business rates relief and VAT reductions give firms a fighting chance not only to restart but also to rebuild.’

However, the Federation of Small Businesses (FSB) said that there was little in the Budget to aid job creation or help people return to work. Mike Cherry, National Chairman of the FSB, said: ‘Thousands of small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle.

‘The continuation of business rates and VAT discounts is critical, and it’s important that those in supply chains benefit from them, not just those that neatly fit the definitions of frontline retail, leisure and hospitality.’

Internet link: CBI press release, BCC press release, FSB press release

Sunak set out Budget to protect businesses


Chancellor Rishi Sunak set out a Budget to protect businesses through the pandemic, fix the public finances and begin building the future economy.

The Chancellor once again pledged to do ‘whatever it takes’ during the COVID-19 pandemic and confirmed that the furlough scheme would be extended until September 2021 to support jobs through the crisis.

Mr Sunak also confirmed that the Self-Employment Income Support Scheme (SEISS) has also been extended, with two further grants this year. Claimable by the self-employed, including the newly self-employed from 6 April 2019, provided they have filed their 2019/20 tax return for by midnight on 2 March 2021,

The stamp duty nil rate band on residential properties in England up to £500,000 will continue until the end of June. It will taper to £250,000 until the end of September, and then return to the usual level of £125,000 from 1 October 2021.

To support businesses as they re-open following lockdown, £5 billion will be made available in restart grants. Non-essential retail businesses re-opening first will be eligible for up to £6,000 but the leisure and hospitality sectors, which have been worse affected and will re-open later, will be eligible for up to £18,000.

However, the rate of corporation tax will increase to 25% in April 2023 for companies with profits over £250,000, whilst retaining a Small Profits Rate of 19% for companies with profits of £50,000 or less.

The Chancellor also introduced a super-deduction for companies investing in qualifying new plant and machinery. Under this measure a company will be allowed to claim 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances.

He also confirmed the location of the eight Freeports in England. Freeports are special economic zones with favourable tariffs and lower taxes to make it easier and cheaper to do business.

Internet link: GOV.UK speeches

Spring Budget 2021


The Chancellor Rishi Sunak presented his second Budget on Wednesday 3 March 2021. In his speech he stated his Budget ‘meets the moment with a three-part plan to protect the jobs and livelihoods of the British people’.

Our summary focuses on the tax measures which may affect you, your family and your business. To help you decipher what was said we have included our own comments. If you have any questions please contact us for advice.

Our full report on the Spring Budget can be found here.

Budget March 2021


Budget 2021 the Main Points

The Chancellor Rishi Sunak delivered his second Budget earlier this afternoon, setting out his three-point plan to protect jobs and livelihoods, fix the public finances and build the future economy. With the largest debt since the World Wars how he plans the country’s finances is key to the countries recovery.

Tax thresholds and allowances have been frozen, he however delayed any major tax changes probably to see how the economy and business responds once COVID restrictions start to be lifted.

Budget March 2021

The key tax measure announcements include:

  • Personal tax thresholds are frozen until 2022. Increases are promised in 2022, with a further freeze until 2026.
  • From 2023 the Corporation Tax rate will increase to 25%. The current rate of 19% will continue to apply to small businesses with profits of £50k or less. A tapered rate will apply to companies with profits of between £50k and £250k.
  • Companies will be able to carry back losses for three years, to secure repayment of tax paid in prior years.
  • A super-deduction (Capital Allowance) for business investment at 130% of costs, for companies, will apply for two years.
  • The nil rate band for Inheritance Tax, the Lifetime Limit and Annual Allowances for pensions, and the VAT registration threshold are all frozen.
  • The Coronavirus Job Retention Scheme (furlough scheme) is extended to the end of September, with a 10% contribution from employers for July and August, and 20% for September. Employees will continue to receive 80% of salary for unworked hours.
  • Self-Employed Support Scheme extended, with grants 4 and 5. The newly self-employed who have submitted 2019-20 tax returns can apply. An 80% grant continues to apply where profits are reduced by 30% or more. A 30% grant will apply where profits are reduced by less than 30%.
  • Stamp Duty Land Tax (SDLT): the £500k nil rate band is extended to 30 June. A £250k nil rate band will then apply until 30 September.
  • The 5% rate of VAT for the tourism and hospitality sectors is extended to 30 June. An interim rate of 12.5% will then apply until April 2022.
  • New restart grants of £6k for non-essential retail businesses and £18k for hospitality businesses will be available from April.
  • Business rates holiday for the retail, hospitality and tourism sectors is extended to 30 June. A two-thirds discount will then apply for the rest of 2021/22.
  • Investment in HMRC to tackle COVID-19 support fraud and tax avoidance.

For more details or advice on how the changes affect you please get in touch 01942 322767 or info@mcgintydemack.co.uk

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