Martin Aitken & Co Ltd News & Developments

Chancellor Rishi Sunak has unveiled the contents of his Budget in the House of Commons.

With the government's tax and spending plans set out for the year ahead, here is a quick summary of the key points:

HMRC says many teenagers are missing out on their Child Trust Funds (CTFs), urging parents to check for hidden cash and forgotten accounts.

The first CTFs matured just over a year ago, at the start of September 2020. CTFs will continue to mature until January 2029 as their owners reach the magic age of 18. At present, about 55,000 CTFs mature each month.

The amount of inheritance tax (IHT) collected by HMRC over the past year reached a record £6 billion, some £1 billion more than the previous 12 months.

This increase comes as no surprise given booming property values and frozen nil rate tax bands. It seems the tax is no longer the preserve of the super-rich.

Five years after carrying out a consultation, the government is going to make it illegal for employers to withhold tips from workers.

The change to legislation, due to take effect over the next 12 months, is not just for staff in restaurants, hotels and bars, but also anyone employed in industries such as hairdressing, casinos and private car hire.

The existing penalty regime for VAT returns has the advantage of simplicity, but it’s something of a blunt instrument.

The new system coming in for return periods beginning on or after 1^st April 2022 will be fairer, but some businesses will find themselves caught up in a complex web of escalating penalties.

New HMRC data shows that in 2019/20, £9.9b of capital gains tax (CGT) liabilities were created.

In July last year, the Chancellor unexpectedly asked the Office of Tax Simplification (OTS) to “review capital gains tax and aspects of the taxation of chargeable gains in relation to individuals and smaller businesses”. The top tax rate currently sits at 28% (limited to residential property and carried interest) with 20% liability for other assets.

Now that more employees have been returning to the workplace, employers face several potentially challenging issues.

Vaccination is one of the most problematic – businesses may wish to insist on employees being vaccinated, but there is growing concern that such policies could leave employers open to a legal claim of unfair dismissal or discrimination.

After playing a crucial part in managing the impact of Covid-19, the Covid Job Retention Scheme (CJRS) is set to end on the 30th of September.

Although some business sectors, especially hospitality, are currently seeing severe staff shortages, other employers may struggle when furlough is phased out.

Last year, HMRC offered businesses the opportunity to defer VAT payments falling due between 20 March 2020 and 30 June 2020, until 30 June 2021 (originally 31 March 2021, but subsequently extended). 

As this deadline is now approaching, businesses who took advantage of the deferral scheme should act now by selecting one of the three available options below:

Despite the many rumours beforehand, the Chancellor still managed to produce some surprises on Budget Day. He chose to spend big initially, with major investment incentives for companies in the next two years.

However, the widely anticipated corporation tax rise then kicks in with a vengeance – a one-off jump from 19% to 25%. Individual taxpayers did not escape either, with Mr Sunak reaching for the old stealth tax favourite of freezing tax bands, thresholds and allowances.

From 1 March 2021, the way that VAT is accounted for on some subcontracted construction supplies will change.

Under the historic rules (pre-1 March), a VAT Registered subcontractor would invoice their customer for work carried out and apply VAT to this, which the customer would pay to the subcontractor in full.

Happy New Year! We hope you had an enjoyable festive break.

It certainly has been overshadowed this year, but yes Brexit negotiations are still ongoing and with only less than a month to go, what can we expect?

The UK Prime Minister, Boris Johnson, UK Chief negotiator David Frost and EU negotiator Michel Barnier continue to offer differing messages to the public about Brexit, some are positive, some ambivalent and occasionally negative remarks about the negotiations.

In his spending review on 25th November Rishi Sunak said the “economic emergency” caused by COVID-19 has only just begun, as he warned the virus would mean lasting damage to growth and jobs.

Official forecasts now predict the biggest economic decline in 300 years.

As the lockdown has now started for England and continues elsewhere, the Government has changed its mind again about business supports and decided to extend the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) across all regions of the UK.

The Job Support scheme was withdrawn on 1 November 2020.

The Job Support scheme, which was due to start on 1 November 2020, has been postponed as the Coronavirus Job Retention Scheme (CJRS) is being extended until December. This is in line with recent announcement from the Prime Minister, on Saturday 31 October, that England is heading into Lockdown 2.0 from Thursday 5th November until 2 December. 

Highlights from the UK Chancellor's winter economy plan, announced on 24th September 2020, to help combat the impacts of Covid-19 on businesses and self-employed individuals include:

A new Job Support Scheme, primarily targeted at small and medium employers, will be introduced covering employees who work at least one third of their normal hours >read more

Glasgow City Council (GCC) is conducting a survey on the impacts of Covid-19 and is inviting businesses based in the local authority area to take part.

Do you know a woman in business who has seen exceptional growth, shown true resilience or made a positive social impact? 

Or maybe she’s a rising star, a sole trader or a new start-up? 

Commercial, finance and tax insights and planning opportunities for SMEs, social enterprises and charities.