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

Changes to Making Tax Digital


VAT Soft Landing Period Ends 1st April 2021

Changes to Making Tax Digital commenced on 1st April 2019. This is a requirement for businesses to keep digital VAT records. From this date until 31st March 2021 the VAT office allowed a transition period for businesses to put these digital links in place. This means that all parts of there are accounting software need to be connected together.

Have you now got this in place? If not, you do need to act before the 31st March. The system has to be one that the VAT office will accept.

The new rule has the force of law:

A digital link is an electronic or digital transfer, or exchange of data, between software programs, products, or applications.

The use of ‘cut and paste’ or ‘copy and paste’ does not constitute a digital link. There is an exception during the soft-landing period as set out in paragraph 3 of the next ‘force of law’.

For VAT periods starting on or after 1 April 2021 your systems must use digital links. This is required for any transfer or exchange of data between software programs, products or applications used as functional compatible software. This is stipulated in the legislation.

Therefore, VAT quarters from 30th June onwards must have a digital means of transfer.

Changes to Making Tax Digital- What does this mean for me.

If you currently use an excel spreadsheet for submission, this is still an acceptable method of submission. If you are providing your accountant with a transaction list in any other format such as:

  • Handwritten paper
  • Pdf’s
  • Word processing documents
  • Verbal

This is no longer acceptable. The information must be provided in a digital spreadsheet.

You will need to either start using a spreadsheet to record the data. Or better still implement a full digital bookkeeping system that records all your transactions.

This latter option will give your business more flexibility. This will also mean that when the next stage of MTD is implemented you will be ready to go with accounts data submission.

How we can help

We can offer clients reduced price licenses on digital software like

  • QuickBooks
  • Xero
  • Sage online

We can help you set up the system.

We can provide training

Or even complete the book-keeping for you.

Let us know what you prefer, and we will provide a quote.

If you are not yet ready to go to full digital records, then you will need to look at maintaining a Microsoft Excel spreadsheet which we can supply to you. This spreadsheet will link to our online system for submission of the return data. If you would like a copy of the spreadsheet please send us an email.

The full details on the legislation can be found https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat

For more details please contact us on 01942322767 or email info@mcgintydemack.co.uk

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