Smarter Business Blog – 15/09/21

We hope you are all well and have had a good summer (apart from the weather!). We have not released a blog for a while, mainly because the news has been quiet, but also that we have been very busy. Covid is still with us, and it seems that it will be with us for a while, cases appear rife, and we are continuing to employ a safety-first approach.

Government Coronavirus Support – Update

Various support schemes have been continuing and we thought it important to update you on some key points.  At this stage changes do not appear likely, and most of the schemes are coming to an end or scaling down towards an end:

• Furlough Scheme – September is the last month for the furlough scheme and the support is now reduced to 60%
• Self Employment Income Support Scheme – As previously published the SEISS grant 5 is open for applications and the deadline for applications is 30 September
• Hospitality VAT Rate – The 5% rate comes to an end on 30 September. From 1 October (until 31 March) it increases to 12.5%. From 1 April next year it returns to the normal 20%
• Business Rates – Since 1 July Rates have been reduced by two thirds and this will continue to the end of March next year
• Stamp Duty – The nil rate band goes back to the normal £125,000 from 1 October

New Health and Social Care Levy

Many of you will have seen the news last week that the Government has announced additional support to Health and Social Care. This will be funded by a 1.25% increase in National Insurance from April 2022. From April 2023 this will appear on an employee’s payslip as a completely separate tax line. A few points to note on this:

• Both the employee and the employer (for employed staff) will pay the additional 1.25%. Some employers will be able to make use of the £4,000 per annum employers allowance to offset this burden. Speak to your payroll contact if you are unsure on this
• Self employed (and partnerships) will also see a 1.25% increase in the Class 4 National Insurance Contributions
• For those operating through Limited companies, Dividend Tax rates will also increase by 1.25%. We have always seen the Dividend Tax as a national insurance on dividends and this seems to cement the link further
• From April 2023, when the levy is shown as a separate tax on the payslip, even those of state pension age, if earning via employment, will pay the extra 1.25% if thresholds are met
• This, as we understand, is an English tax and Authorities in Scotland, Wales and Northern Ireland will not necessarily implement the new levy. However, they will benefit from the fund

From October 2023, anyone new to the care system will have a lifetime cap on contributions towards care costs of £86,000. The rules around this are very complicated and we will await further guidance before outlining arrangements further.

Budget Date Announced

The Government has set a date for the budget of the 27 October. With the financial pressures of the pandemic and Government spending review, this could be a budget to look out for. We will bring you news and updates as soon as anything is announced.

Smarter Accounting COVID Policy

We have again reviewed our Office policy in relation to Covid and we have chosen to remain closed for face-to-face meetings at this point. This is to ensure the continued safety of our staff and clients. We take the view that with the level of cases we are seeing locally, and the likely escalation of things over the winter months, that any other decision would present an unacceptable risk at present. 

We have been managing to operate for the last 18 months with this policy without issues and therefore we will continue to offer other options such as video conferencing, telephone calls or outside meetings. If you are dropping off or collecting records via the office, please notify us in advance and wear a facemask.

Tax Return Deadlines

The 2020/21 tax return season is well upon us. The deadline for the filing of returns is still 31 January 2022. Due to various Coronavirus support schemes (rates related grants, self-employment income support scheme, etc) we are seeing some cases where unexpected larger than normal tax bills are coming to light. All we can suggest is that clients get their records to us as soon as they can, so that we can at least give early notice of such liabilities.

We’re Recruiting!

As a fast growing practice we regularly take on new team members to support our clients and existing team.  We’re currently looking to recruit experienced, hard-working Accounts Assistants in both our Teignmouth and Crediton offices, preferably with career backgrounds in accountancy (AAT).  These exciting roles are both full-time and permanent with a competitive £OTE.  Please click here for more information > 

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Best wishes and stay safe