Off-payroll working

The extension of the off-payroll working rules to medium-sized and large organisations finally took effect on 6 April. The responsibility for making an employment status determination for each engagement where the worker’s services are provided through an intermediary now rests with the client receiving the services, i.e. the engager/hirer for affected entities.

The rules now apply to all public sector clients and, from 6 April, private sector companies that meet 2 or more of the following conditions:

– the annual turnover of more than £10.2 million;
– the company has…

Many companies use 31 March as the accounting reference date. As such, now is a good time to review the position of directors’ current accounts for close companies.

It is a common misunderstanding that if the company charges a commercial rate of interest on any loan made to the participators or employees there are no tax consequences. In fact, whilst doing this does protect against a benefit in kind arising, there is a further consideration for the company.

A charge arises under CTA 2010, s. 455 where amounts are owing…

Budget

The Budget finally took place on 3 March 2021. None of the speculated tax changes, e.g. raising CGT came to pass, although the main rate of corporation tax will increase in 2023. Several allowances, such as the personal allowance and CGT annual exempt amount have been frozen until April 2026. Further detail of the Budget announcements were included in our Budget newsletter.

Covid-19

In terms of Covid-19 measures, details of the fourth SEISS grant have now been published. Additionally, a fifth tranche for the period from May to September…

A business receiving support payments for Covid-19 needs to ensure the receipt is correctly recorded as taxable income for corporation tax purposes. For unincorporated businesses using the cash basis, this is straightforward enough. However, where the accounts are prepared using GAAP, more care is needed.

Section 106 of Finance Act 2020 that payments received under the following schemes are within the scope of this:

– the coronavirus job retention scheme;
– the self-employment income support scheme;
– any other scheme that is the subject of a direction given under section 76 of…

Covid-19

There have been relatively few announcements related to Covid-19 support this month. The only real announcement of note was an amendment to the terms of the Pay As You Grow scheme for repaying Bounce Back loans. Under the revised rules, a borrower will be able to take a six-month repayment holiday without needing to have made any previous instalments. Before the amendment, they would have needed to have made at least six payments before this was an option. Full details are available here.

Self-assessment

A welcome announcement in February…