Green & Co Accountants and Tax Advisors take a look at the fundamental changes that have come in since the turn of the year:

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Brexit - The end of the Brexit transition period on 31 December 2020 ushered in a range of new trade rules and regulations applicable to businesses that trade with the EU. Firms need to follow new rules on exports, imports, tariffs, data and hiring. VAT changes include - import VAT due on all goods, and accounting for the VAT has been postponed until 1 July 2021. Consignments of less than £135 should have UK supply VAT applied at the point of sale rather than UK import VAT. The Low-Value Consignment Relief (LVCR) has been abolished, and exports to the EU are zero-rated for VAT. 

Recovery Loan Scheme - Budget 2021 announced a successor loan scheme to aid post-COVID-19 business recovery. The Recovery Loan Scheme opened on 6 April 2021 and will run until 31 December 2021, providing ongoing support to UK businesses. Loans are available through a network of accredited lenders listed on the British Business Bank's website. You need to show that your business would be viable were it not for the pandemic, has been adversely impacted by the pandemic and is not in collective insolvency proceedings. Up to £10 million is available per business with lenders covered by an 80% government guarantee. You will not be expected to sign a personal guarantee on facilities up to £250,000, and a borrower's principal private residence cannot be taken as security. 

COVID-19 support schemes - As was widely anticipated, the main COVID-19 business support schemes, the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS), were extended in the Budget to 30 September 2021. Eligibility conditions for phases four and five of the SEISS grants have changed considerably, so we would advise you to check the eligibility criteria. Those who missed out on the first three grants may now be eligible. The grants are subject to tax, and you should include them in your income for the year. 

Super-deduction - A key headline from Budget 2021 was a new 'super-deduction' for limited companies to boost investment. Companies investing in qualifying new plant and machinery assets from 1 April 2021 until 31 March 2023 will be able to claim a 130% super-deduction capital allowance and a 50% first-year allowance for qualifying special rate assets. The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest. 

Other recent changes include IR35 and the Domestic Reverse Charge for the construction industry. If you have any questions regarding any of the above, Green & Co would be happy to help at mail@greenandco.com or 01633 871122.

Posted on: Monday 24th May 2021