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Get a business health check at the start of the tax year

Get a business health check at the start of the tax year

Using up personal allowances is not the only reason you should see your accountant at the start of the tax year, it is also the best time to get a health and wealth check for your business too.

The end of the tax year is the busiest time for your business and your accountant, meaning devoting time and effort to checking whether your business is on track is sadly lacking.

Take the time while you have the time

However, the complete opposite is the case at the start of the tax year, so now is the time to make the most of the chance to review your business strategy, cashflow and plans for the coming year to ensure your company has the best chance of success.

What can your accountant help you with?

Your accountant is perfectly placed to help you put an effective plan in place to give your business the boost it needs at the start of the tax year. He or she can help you with everything from saving tax and paying the right amount of tax, right the way through to helping you comply with relevant regulations and improving your cashflow.

Accessing funding

A good accountant can also help you access relevant funding – whether that is a grant that your business would qualify for or an investor that would help your business to grow.

Setting out an effective business plan at the beginning of your financial year is like creating a road map for the coming months, allowing you to follow that map to achieve your goals.

We can help your business run smoothly

When things get tough, your accountant is there to help you with everything from advice to reality checks so your business can continue to run smoothly.

If you want help to set your business on the right path for this tax year, then please get in touch and find out how we can help you.

May 9, 2022

Strong Customer Authentication (SCA) rules – what they mean for businesses and consumers

Strong Customer Authentication (SCA) rules – what they mean for businesses and consumers

You may have already noticed when you are buying things online that you are now being asked to confirm your purchase in more than one way to improve security, and this is the result of the new Strong Customer Authentication (SCA) regulations which came into effect on 14 March 2022.

What are the SCA regulations?

The SCA regulations create an additional layer of security for card payments which involve a second method of identification. This could be a text message with a code that needs to be added to a purchase, a phone call to a landline, or via a card reader or smartphone app. The aim is to reduce the amount of fraud and make customer transactions safer.

The effect on businesses

There is, of course, an impact on customers directly. But all companies who sell directly to consumers via card purchases have had to make some changes to their technology too. Retailers should have already upgraded their payment gateways and payment services providers have been working towards helping achieve this.

Declined transactions

From 14 March 2022, any transaction that is not SCA compliant will be declined, which would be costly to retailers. If you are still having problems with this for your business, then you urgently need some help.

Find out how we can help you

If you want to know more about SCA or have any problems implementing it, then please get in touch and we will do what we can to help you.

April 25, 2022

Bank of England (BoE) base rate rises to 0.75% – what it means for consumers and businesses

Bank of England (BoE) base rate rises to 0.75% – what it means for consumers and businesses

The Bank of England (BoE) base rate rose to 0.75% in March in response to Consumer Prices Index (CPI) inflation rising to 5.5% – almost triple the BoE’s target of 2%. Inflation is set to continue rising throughout the year (see Spring Statement round-up) with the Russian invasion of Ukraine creating increased pressure on already rising prices.

What does it mean for you?

Any rise in the base rate has an impact on borrowing rates for businesses and individuals, and on savings rates. Each is likely to rise – great news for savers, not such great news for borrowers.

How will borrowers be affected?

Any loan you have that does not have a fixed rate – such as some mortgages, personal loans or credit card debt, for example – could face a rise in interest rates if the company providing this chooses to pass this rate on. And many will.

However, if you have a fixed-rate mortgage, unsecured personal loan or other loan, for example, then you will not see these rates change until you reach the end of the offer term or until the loan is paid off.

How are savers affected?

If you have savings in a fixed-rate account, these will not rise either. But if your savings are in a non-fixed interest rate account, then you could see the interest you are paid on this rise.

If you see a better rate than you are being paid elsewhere, then it is worth considering moving your savings to the better-paying account. But bear in mind if you are in a fixed-rate account, you could face a penalty for doing this which could negate the benefit of moving. So, check with an expert before taking any action.

Safety net

You also need to consider how much of your money is in each institution. The Financial Services Compensation Scheme (FSCS) covers your money on deposit with a single institution up to £85,000. But you need to be aware that various brands come under one institution – such as Halifax and TSB coming under the Lloyds Banking Group.

You would be covered up to £85,000 across all these accounts, not in each. It only becomes relevant if one of the banks goes bust, but we know from experience that however unlikely, this can happen. So, it is something to bear in mind.

Find out how we can help you

If you are unsure about whether your money is working as hard for you as it could, then please feel free to get in touch and we will help you in any way we can.

April 20, 2022

Stamp Duty Land Tax – why this will increase as house prices rise and what you can do to reduce it

Stamp Duty Land Tax – why this will increase as house prices rise and what you can do to reduce it

Stamp Duty Land Tax (SDLT) receipts were somewhat skewed in the last year as the SDLT holiday for properties worth up to £500,000 was phased out on June 30, 2021, and the holiday for properties worth between £125,000 and £250,000 ended on September 30.

These two deadlines resulted in a flurry of activity as people tried to complete purchases under the wire and avoid having to pay SDLT on their purchases. The result, according to Government data, was that transactions in October to December last year were 10% lower than the previous quarter, and 13% lower than Q4 2020.

Total receipts up in Q4 2021

However, despite this, total receipts in Q4 2021 were 22% higher than Q3 2021, and 55% higher than Q4 2020. This change in receipts will have largely been impacted by the lower residential nil-rate band of £125,000 for Q4 last year compared to £250,000 for Q3 2021 and £500,000 for Q4 2020.

House prices continue to rise, and while the thresholds stay the same, the receipts are likely to increase if property sales continue at the same pace.

2% SDLT surcharge for non-residents

One additional consideration is the application of additional taxes on properties bought by people who are non-resident in the UK. These purchases have faced a 2% SDLT surcharge since April last year. To the end of Q4 last year, this had resulted in 8,500 transactions paying £86m.

Possible ways to reduce SDLT

There are a few things you can do to mitigate your SDLT, including buying a property in a lower price bracket or negotiating a different price with the seller that brings you below a threshold. But beware, HMRC would be likely to take a dim view of any price cuts that mean you are buying a property for what would not be considered the full market value.

If you bought a second home and paid the additional 3% SDLT as a result, then if you sell your main residence within three years of completing on the second property, you may be able to reclaim a refund of the 3% surcharge amount. This could be a substantial sum and is worth considering if you plan to sell your main home soon after buying a second home.

You can also negotiate a price for removable fixtures and fittings that the seller is prepared to leave behind, as you only pay SDLT on the property purchase itself. This could reduce the price to drop you into a lower tax band, but HMRC insists this is done on a “just and reasonable basis” so you would need to make sure you get legal advice on how to do this properly.

First-time buyers also currently do not pay SDLT on properties worth up to £300,000 so providing you buy a property below this level, you will not pay SDLT.

You can also build your own property if that is something that appeals to you. You would pay the SDLT purely on the cost of the land purchased, which is likely to be considerably lower than buying a property already on the land. Extreme, yes, but an option for the right person.

Find out how we can help you

If you have a query about SDLT and how you can deal with tax, then please give us a call and we can guide you through what you can and cannot do to mitigate this tax.

March 21, 2022

Businesses must prepare as wider creditor action protections end in March

Businesses must prepare as wider creditor action protections end in March

Companies with debts outside of their rental arrears face the removal of protection against creditor actions from March 31, 2022.

Other debts outside rental arrears affected

Currently, rent arrears built up because of forced closures as a result of COVID-19 are excluded from these measures, as they are covered by other legislation

Any debts outside of rent arrears, must reach a £10,000 threshold before a winding-up petition can be filed. Before the filing, the creditor must have given the debtor a notice – called a Schedule 10 Notice – which states that if a proposal for payment of the debt has not been made within 21 days of the notice, then the creditor intends to file a winding-up petition.

Firms must prepare to deal with possible litigation from April 2022

However, these restrictions end on March 31, so any business with debts of more than £10,000 that are not related to rent arrears needs to be sure it is prepared for these protections to be removed, unless more legislation is passed before that date.

Challenges could be made for as little as £750 owed

Law firm Freshfields Bruckhaus Deringer highlighted that the Government has not changed the threshold to serve a statutory demand for winding-up from £750. So, while the current legislation is in place there are two thresholds in place for the compulsory winding-up process. But once Schedule 10 notices are repealed, the lower level of £750 remains.

Find out how we can help you

If you have debts outside of rental arrears that have built up due to difficult trading conditions during the pandemic, or because of forced closures, then please contact us to find out how we can help you manage this most effectively for your business.

February 21, 2022

Landlords and tenants face legally binding arbitration over rent arrear disputes

Landlords and tenants face legally binding arbitration over rent arrear disputes

Companies forced to close due to Coronavirus restrictions are currently protected from eviction by landlords until March 25, but a Government Bill currently before Parliament is expected to create binding arbitration following this date.

Code of Practice

The Commercial Rent (Coronavirus) Bill, which was originally announced alongside a Code of Practice by Kwasi Kwarteng on November 9, 2021 protects commercial tenants in arrears from being evicted. The aim is to encourage landlords and tenants to negotiate how to deal with these arrears and to share the cost of commercial rent debts caused as a result of closures during the pandemic.

The Code of Practice outlines the process for tenants and landlords to settle outstanding debts. But any ongoing disputes after March 25 could be settled by binding arbitration if the Bill successfully passes through Parliament.

Debts built up by the likes of pubs, gyms and restaurants as a result of their forced closure during the pandemic will be within the scope of the legislation. Any debts built up outside of these times will be excluded, as will debts resulting from the voluntary closure of a business where it would not have been forced to close under the emergency measures.

Since November 10, 2021, the existing legislation has protected commercial tenants from County Court Judgements, High Court Judgements and bankruptcy petitions issued against them because of rent arrears accruing during the pandemic.

However, if no agreement can be reached, then either the tenant or landlord can apply for arbitration unilaterally. The arbitration can be applied for within six months of the legislation coming into force with the tenant expected to repay the final agreed amount within 24 months.

Business Secretary Kwasi Kwarteng said at the launch: “We encourage landlords and tenants to keep working together to reach their own agreements ahead of the new laws coming into place, and we expect tenants capable of paying rent to do so.”

Support for the moves, but ‘devil is in the detail’

Kate Nicholls OBE, CEO of UK Hospitality, said: “It is in the long-term interests of landlords and tenants to come together and find solutions that ensure business survival and that do not undermine the economic recovery.

“We share government’s view that arbitration should be a last resort and this process must take into account the exceptional and existential level of pain that hospitality businesses have faced over the last 18 months. It must not impact this industry’s ability to rapidly recover and create jobs throughout the country.”

However, while Helen Dickinson OBE, Chief Executive of the British Retail Consortium, supports the principle of compulsory arbitration, she said the “devil will be in the detail on issues around what tenant viability really means in practice and the power of arbitrators”.

She added: “We will engage closely and constructively with government to help ensure their proposals protect otherwise viable businesses, secure the recovery, and protect jobs.”

We can support you if you have rental arrears

If you have rental arrears due to forced closures during the pandemic, then please get in touch so we can help support you through this difficult time.

February 14, 2022

Help if you are struggling to pay your tax bill

Help if you are struggling to pay your tax bill

Financially, 2021 has been a difficult year for many, and you may be struggling to pay your January tax bill in full. Any tax and National Insurance that remains unpaid for 2020/21 must be paid by 31 January 2022, along with the first payment on account for 2021/22.

Contact HMRC

If you cannot pay your tax bill on time, you should contact HMRC as soon as possible – you do not need to wait until the payment is late, and it is advisable not to do so. You will be able to discuss the help that is available to you, and may be able to pay what you owe in instalments by setting up a Time to Pay arrangement.

Time to Pay arrangements

A Time to Pay arrangement is an agreement with HMRC to pay the tax that you owe in instalments. The procedure for setting up a Time to Pay arrangement depends on the type of tax that you owe and the amount that you owe.

Self-assessment

If you are unable to pay your self-assessment tax bill, you may be able to set up a Time to Pay arrangement up online via your Government Gateway account. You can do this if:

  • you have filed your latest tax return;
  • you owe less than £30,000;
  • you are within 60 days of the payment deadline; and
  • you plan to pay off your tax debt within the next 12 months, or less.

This is the most straightforward way to arrange to pay what you owe in instalments. To avoid triggering unnecessary late payment penalties, if you know that you will struggle to meet your 31 January 2022 tax bill, it is advisable to ensure that your return is filed in good time so that a Time to Pay arrangement can be in place by this date.   

Unable to make an online arrangement?

If you are unable to set up a Time to Pay arrangement online, for example, if the tax that you owe is more than £30,000, you may be able to agree an instalment payment plan by calling HMRC’s self-assessment helpline on 0300 200 3822.

Other types of tax

If you owe tax other than that due under self-assessment, or if your company cannot pay tax that it owes, you can contact HMRC’s Payment Support Service on 0300 200 3835 to discuss setting up a Time to Pay arrangement.

Information required

To set up a Time to Pay arrangement you will need to have the following information to hand:

  • your unique tax reference number;
  • your VAT registration number if you are a VAT-registered business;
  • your bank account details; and
  • details of any previous payments that you have missed.

HMRC will ask you a number of questions, including:

  • how much you can afford to repay each month;
  • whether you are able to pay what you owe in full;
  • whether there are any other tax bills that you need to pay;
  • how much money you earn;
  • how much you usually spend each month; and
  • what savings and investments you have.

HMRC expect that if you are able to pay the tax that you owe, you will do so. Also, if you have any savings or assets, they expect that you will use those to meet your tax obligations.  

Where you are unable to pay what you owe in full, HMRC will usually set your monthly payments at about 50% of the money you have left over each month after you have paid your bills.

Once a Time to Pay agreement is in place, it is important that you pay at least the agreed amount each month. If you are able, you can pay more than the agreed amount if you want to clear the debt more quickly.

Unable to agree a Time to Pay arrangement?

If you are unable to agree a Time to Pay arrangement with HMRC, for example, if HMRC do not think you will stick to the agreement because you have defaulted in the past, you will be asked to pay what you owe in full. If you are unable to do this, HMRC may take enforcement action to collect the debt.

We can help

If you are struggling to pay tax that you owe or are worried about being able to pay your January self-assessment bill, talk to us. We can help you set up a plan to pay in instalments.

January 10, 2022

Tax checks for licence renewal applications

Tax checks for licence renewal applications

From 4 April 2022, applicants applying to renew certain licences will need to pass a tax check before their licence application can be considered. Initially, the requirement will only apply in England and Wales. However, the Government have consulted on extending the requirements to Scotland and Northern Ireland from 2023.

Licences affected

Tax conditionality (the need to pass a tax check before a licence is renewed) will apply to licences to:

  • drive taxi and private hire vehicles (such as mini cabs);
  • operate a private hire vehicle business;
  • carry on the business of a scrap metal dealer on a site; and
  • carry on business as a mobile collector of scrap metal.

The check will only apply to licence renewal applications, not to first-time applications. However, the licensing authority will need to provide first-time applicants with information on what they need to do to comply with their tax obligations, and check that the applicant has received that information, before considering the licence application.

Nature of the tax check

The new tax check will apply in addition to the existing requirements imposed by the licensing authority. The purpose of the check is to confirm that the applicant is registered for tax. The check should only need to be completed about once every three years.

If you are applying to renew a licence on or after 4 April 2022, you will be able to complete the check, which will comprise a few short questions, via your Government Gateway account. The Government are to make guidance on completing the check available on the Gov.uk website. A helpline will also be available.

Once you have completed the check, you will be given a code. The code is important, and you must give it to your licensing authority as they are unable to progress your licence renewal application without it.

HMRC will inform the licensing authority whether you have passed the tax check. However, they will not provide them with any details of your tax affairs.

Plan ahead

In preparation for the introduction of tax conditionality, it is advisable to ensure that your tax affairs are in order, and get them up to date if they are not. HMRC have published a communications pack explaining what this will mean for licence applicants. It is worth a read.

We can help

If you will be required to pass the tax check in order to renew a licence that you need to operate your business, we can help you ensure that your tax affairs are in order.

November 22, 2021

Budget highlights

Budget highlights

The Chancellor presented his Autumn Budget and Spending Review on 27 October 2021. Some of the highlights are discussed below.

Income tax rates and thresholds

The rates and thresholds applying for 2022/23 were confirmed.

Personal allowance

As previously announced, the personal allowance remains at £12,570 for 2022/23. The allowance is reduced by £1 for every £2 by which adjusted net income exceeds £100,000. This means that where income exceeds £125,140, the personal allowance is lost in its entirety.

Rates and bands

The basic rate remains at 20%, the higher rate remains at 40% and the additional rate remains at 45%.

The basic rate band remains at £37,700. This means that where a person receives the standard personal allowance of £12,570, they will start to pay higher rate tax of 40% once their income exceeds £50,270.

The additional rate of 45% is payable on taxable income in excess of £150,000.

The rates applying to the non-dividend, non-savings income of Scottish taxpayers will be announced at the time of the Scottish Budget in December.

Dividend tax rates

As previously announced, the rates at which dividends are taxed are to rise by 1.25% from 6 April 2022. The increase will provide funding for health and adult social care.

Consequently, for 2022/23, the ordinary dividend rate is 8.75%, the upper dividend rate is 33.75% and the additional dividend rate is 39.35%.

National Insurance rates and thresholds

The rates and thresholds applying for 2022/23 have been confirmed.

Employees and employers

As previously announced, the upper earnings limit for primary Class 1 purposes will remain at £967 per week for 2022/23. This is aligned with the point at which higher rate tax becomes payable. The upper secondary thresholds that are linked to the upper earnings limit, namely, the upper secondary threshold for employees under the age of 21, the apprentice upper secondary threshold and the upper secondary threshold for armed forces veterans in the first year of their first civilian employment since leaving the armed forces, also remain at £967 per week.

A new secondary threshold for new Freeport employees is introduced from 6 April 2022. This is set at £481 per week.

The remaining thresholds are increased in line with the increase in the Consumer Price Index. The effect of this is that the lower earnings limit is set at £123 per week for 2022/23, the primary threshold is set at £190 per week and the secondary threshold is set at £175 per week.

As previously announced, the rates of primary and secondary Class 1, Class 1A and Class 1B contributions are increased by 1.25% for 2022/23 only pending the introduction of the Health and Social Care Levy. The main primary rate is 13.25% and the additional primary rate is 3.25%. Employers will pay secondary Class 1, Class 1A and Class 1B contributions at 15.05%. The rates are due to revert to their 2021/22 levels from 6 April 2023 when the Health and Social Care Levy comes into effect.

The Employment Allowance remains at £4,000 for 2022/23.

The self-employed

The self-employed pay Class 2 and Class 4 contributions.

Class 2 contributions are weekly contributions payable where profits exceed the small profits threshold. For 2022/23, the small profits threshold is £6,725 and the Class 2 contribution rate is £3.15 per week.

The self-employed also pay Class 4 contributions on their profits. The upper profits limit (which is aligned with the upper earnings limit for Class 1 and the rate at which higher rate tax becomes payable) is frozen at £50,270, while the lower profits limit is increased to £9,880.

Pending the introduction of the Health and Social Care Levy, the Class 4 rates are increased by 1.25% for 2022/23. As a result, the main Class 4 rate is set at 10.25% and the additional Class 4 rate is set at 3.25%. The rates are due to revert to their 2021/22 levels from 6 April 2023 when the Health and Social Care Levy comes into effect.

Cars and vans

The rates of company car tax already announced for 2022/23 will continue to apply for 2023/24 and 2024/25.

The fuel scale multiplier used for working out the fuel benefit charge is set at £25,300 for 2022/23 (up from £24,600 for 2021/22).

The amount on which tax is charged in respect of a taxable company van is increased to £3,600 for 2022/23. The amount is £3,500 for 2021/22.

A separate fuel charge applies where fuel is provided for private journeys in a company van. This is set at £688 for 2022/23 (up from £669 for 2021/22).

Residential capital gains tax

Where a residence has not been your only or main residence throughout the time that you have owned it, you may have to pay capital gains tax if the chargeable gain is more than your annual exempt amount. This may be the case if you sell an investment property or a second home.

From 27 October 2021, the window for reporting a residential capital gain and making a payment on account of the tax that is due is increased from 30 days to 60 days.

Duties

The Chancellor also announced a welcome freezing of certain duties that had been expected to rise.

Fuel duty

Fuel duty rates are to remain frozen for 2022/2023.

Alcohol duty

Alcohol duty rates will remain at their current levels. However, change is on the cards.

The Government are consulting on reforms to alcohol duty which will reduce the number of rates from 15 to six, and which will see higher duty charged on stronger drinks. The consultation will run until 30 January 2022.

Air passenger duty

A new lower band of air passenger duty (APD) is being introduced from 1 April 2023 for flights within the UK. In addition, a new ultra long-haul band will apply to destinations with capitals more than 5,500 miles from London.

Get in touch

To find out what the Budget announcements mean for you, please get in touch.

November 1, 2021

Back to the office

Back to the office

Now that the ‘work from home if you can’ guidance has been lifted, employees are returning to the office. If, following their return, you allow employees to keep their homeworking equipment for personal use, there may be tax consequences to consider.

Employer-provided equipment

If you provided homeworking equipment to your employees to enable them to work from home, no tax charge arose on the provision of the equipment, as long as you retained ownership of it. However, there may be tax to pay if you allow the employee to keep the equipment for their personal use when they no longer need it to work from home. The nature of the tax charge depends on whether ownership of the equipment is transferred to the employee.   

Ownership transferred

A tax charge will arise if you transfer ownership of the equipment to the employee, unless the employee pays at least the market value for the equipment. The amount charged to tax is the market value at the date of the transfer, less any amount paid by the employee.

No transfer of ownership

If, instead, you retain ownership of the equipment but allow the employee to use it for their personal use, the tax charge is based on the ‘annual value’ of the equipment. This is 20% of the market value of the equipment at the date on which it is first made available for the employee’s personal use.

You may have chosen to adopt a flexible working policy under which employees continue to work from home some of the time. Where this is the case, as long as the homeworking equipment remains available predominantly to allow the employee to work from home, no tax charge will arise on insignificant private use.

Employer-reimbursed equipment

At the start of the pandemic, many employees were required to work from home at very short notice. In many cases, it was easier for the employee to buy the equipment that they needed to work from home, and claim the cost back from the employer.

If you took this route and reimbursed employees for the cost of homeworking equipment, as long as the ownership of the equipment was not transferred to you, there is no tax to pay if the employee retains the equipment for personal use when they return to the workplace.

Contact us

If you are unsure whether a tax charge arises in respect of retained homeworking equipment when your employees return to the office, please get in touch to discuss this with us.

August 31, 2021

Collection of tax debts after COVID-19

Collection of tax debts after COVID-19

During the COVID-19 pandemic, HMRC paused much of their debt collection work, both to divert resources to administering the various COVID-19 support schemes and to help taxpayers whose finances were adversely affected by the pandemic. However, as the country emerges from the Coronavirus crisis, HMRC have restarted their tax debt collection work and will be contacting taxpayers who have fallen behind with their payments.

Talk to HMRC

If you have unpaid tax debts and HMRC contact you to discuss those debts, the best course of action is to speak to them to agree a repayment plan. Ignoring the problem will not make it go away, and HMRC may start enforcement proceedings against taxpayers who ignore their attempts to contact them.

Pay if you can

If you have outstanding tax debts and are able to pay them, HMRC’s expectation is that you will. In assessing your ability to pay, HMRC will expect you to make use of the various COVID-19 finance schemes, such as the Recovery Loan Scheme, to raise the necessary funds. If you need time to arrange the finance, HMRC may offer a short-term deferral of your tax debt. If this is agreed, HMRC will not take any action until that period had elapsed, and you will not need to make any payments during the deferral period.

Time-to-pay arrangements

If you are unable to clear your outstanding tax debts in full, you may be able to agree a time-to-pay arrangement with HMRC.

There is no standard agreement; time-to-pay arrangements are based on an individual’s circumstances. HMRC will establish your ability to pay by looking at your income and expenditure. They will also want to know why you are struggling to pay, and what action you have taken to try and pay some or all of the bill.

Enforcement action

If you do not pay your outstanding tax debts or come to an agreement with HMRC to pay what you owe in instalments, from September 2021, HMRC may use their enforcement powers to collect tax that is owed to them. Avenues available to them include taking control of goods, summary warrants and court action, including insolvency proceedings.

While HMRC will, where possible, aim to support viable businesses, if a business has little chance of recovery, HMRC will take action to recover any tax that they are owed.

Talk to us

If you have tax debts that you are struggling to pay, speak to us. We can help you agree a repayment plan with HMRC.

August 23, 2021

New lower temporary SDLT threshold

New lower temporary SDLT threshold

The residential stamp duty land tax (SDLT) threshold applying in England and Northern Ireland was temporarily increased to £500,000 from 8 July 2020 to 30 June 2021 (extended from the original end date of 31 March 2021). From 1 July 2021 to 30 September 2021, a new temporary residential threshold of £250,000 applies. The threshold reverts to its usual level of £125,000 from 1 October 2021. Details of the rates can be found on the Gov.uk website.

Nature of the temporary threshold

To help boost house sales during the COVID-19 pandemic, the SDLT residential threshold was temporarily increased. Similar measures were introduced in Scotland in relation to land transaction tax (LTT) and in Wales in relation to land and buildings transaction tax (LBTT).

SDLT: 8 July 2020 to 30 June 2021

A higher temporary residential SDLT threshold of £500,000 applied in England and Northern Ireland where completion took place between 8 July 2020 and 30 June 2021. The usual rates applied to any consideration in excess of £500,000.

SDLT: 1 July 2021 to 30 September 2021

From 1 July 2021, the SDLT residential threshold drops to a new temporary level of £250,000. If you are in the process of buying a house and missed the 30 June 2021 completion deadline, you will be able to save SDLT of up to £2,500 if you complete by 30 September 2021.

The residential rates applying during this period are as set out in the table below.

ConsiderationOnly or main homeSecond and subsequent properties
Up to £250,0000%3%
The next £675,000 (£250,001 to £925,000)5%8%
The next £575,000 (£925,001 to £1.5 million)10%13%
Remaining amount12%15%

First-time buyers

From 1 July 2021, the threshold for first-time buyers reverts to £300,000 where the consideration is £500,000. First-time buyers pay no SDLT on the first £300,000 and pay SDLT at the rate of 5% on any consideration in excess of £300,000 up to £500,000. If the consideration is more than £500,000, the above rates and residential threshold apply.

SDLT: From 1 October 2021

The residential SDLT threshold reverts to its usual level of £125,000 from 1 October 2021. Purchasers will pay SDLT at a rate of 2% on the portion from £125,000 to £250,000. Above £250,000, the rates are as in the table above.

Second and subsequent properties

Investors and second-home owners also benefit from the temporary residential thresholds as the 3% supplement is added to the residential rates as reduced.

Scotland

The LTT threshold in Scotland was increased to £250,000 from 15 July 2020 until 31 March 2021. However, this period was not extended, and the threshold reverted to £145,000 from 1 April 2021. As in England and Northern Ireland, those buying second and subsequent properties benefited from the higher threshold; the 4% supplement was applied to the reduced residential rates.

Wales

The LBTT threshold in Wales was increased to £250,000 from 27 July 2020 to 30 June 2021, reverting to £180,000 from 1 July 2021. Unlike the rest of the UK, purchasers of second and subsequent properties in Wales did not benefit from the higher threshold.

Speak to us

If you are thinking of moving home or buying a holiday or investment property, speak to us to find out whether you can save SDLT.

August 2, 2021

Accessing the Government Gateway

Accessing the Government Gateway

From 15 June 2021, all businesses and organisations will need multi-factor authentication in order to sign into the Government Gateway.

Multi-factor authentication

Businesses and organisations that use HMRC’s online services and which do not currently receive an access code by text or voice call, or direct to an authenticator app, will need to add a device, such as their mobile phone number, to their Government Gateway account in order to be able to sign in. Once a device has been added, you will receive an access code every time you sign in. The changes are being made to further protect Government Gateway accounts from fraud.

You do not need to do anything until the next time that you sign in. At this point you will be asked to add your new device.

Already have multi-factor authentication?

If you already have multi-factor authentication on your business’s or organisation’s Government Gateway account, nothing will change. You can continue to sign in as usual, receiving your access code in the normal way.

Additional users

If your business or organisation needs to allow employees to access your Government Gateway account, this can be done using multi-factor authentication. To do this, use the administrator and assistant functionality in your Business Tax Account to create additional users. Each user will have their own multi-factor authentication, and will need an access code to sign in.

Individuals and agents

The changes do not apply to individuals accessing their own account, or to agents.

Talk to us

Contact us to find out how to set up and use your Government Gateway account.

July 5, 2021

Budget 2021 – Other Matters

Budget 2021 – Other Matters

Land and buildings transaction taxes

Land and buildings transaction taxes are devolved to Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax). Stamp Duty Land Tax (SDLT) applies to transactions in England and Northern Ireland. All these taxes have had a temporary increase in the nil rate threshold for residential properties. The thresholds were set to return to the previous thresholds from 1 April 2021.

Budget announcement

The government will extend the temporary increase to the SDLT nil rate band for residential property in England and Northern Ireland to 30 June 2021. From 1 July 2021 until 30 September 2021, the nil rate band will be £250,000. The nil rate band will return to the standard amount of £125,000 from 1 October 2021.

Wales – Land Transaction Tax

Following the Chancellor’s announcement, the Welsh Finance Minister has confirmed that the Land Transaction Tax temporary reduction period will be extended by a further three months so that it will end on 30 June 2021.

In December 2020, the Welsh Government changed the rates charged on higher rates residential property transactions and non-residential transactions including the rent element of non-residential and mixed leases. The changes to the higher residential rates have the effect of increasing the tax rates applied to the bands by 1%. For non-residential transactions, changes have been made to the bands so as to increase the nil rate thresholds. These changes came into effect on 22 December 2020.

SDLT surcharge

New SDLT rates are proposed for purchasers of residential property in England and Northern Ireland who are not resident in the UK. The new rates will be 2% higher than those that apply to purchases made by UK residents, and will apply to purchases of both freehold and leasehold property as well as increasing SDLT payable on rents on the grant of a new lease. The surcharge will apply to land transactions with an effective date of 1 April 2021 or later. Transitional rules may apply to some contracts exchanged before 11 March 2020 but completed or are substantially performed on or after 1 April 2021, or some contracts substantially performed on or before 31 March 2021 but not completed until 1 April 2021 or later.

Plastic Packaging Tax

Draft legislation has been issued to establish a Plastic Packaging Tax. This is a new tax that applies to plastic packaging produced in, or imported into the UK that does not contain at least 30% recycled plastic. Plastic packaging is packaging that is predominantly plastic by weight.

The tax rate will be £200 per tonne of non-compliant plastic packaging. There will be an exemption for businesses that manufacture or import less than 10 tonnes of plastic packaging per year. The tax will take effect from April 2022.

Van Vehicle Excise Duty (VED)

Van VED is currently levied at £250 per year for most light goods vehicles (under 3.5 tonnes) which have been registered since 1 March 2001. A consultation paper explored creating a graduated first year rate for new light goods vehicles and motorhomes from April 2021. The government has recently decided not to proceed with the change in light of the pandemic. Motorhomes will continue to be placed in the Private/Light Goods class.

Reform of penalties for late submission and late payment of tax

The government will reform the penalty regime for VAT and Income Tax Self Assessment (ITSA) to make it fairer and more consistent. The new late submission regime will be points-based, and a financial penalty will only be issued when the relevant threshold is reached. The new late payment regime will introduce penalties proportionate to the amount of tax owed and how late the tax due is. These reforms will come into effect: for VAT taxpayers, from periods starting on or after 1 April 2022; for taxpayers in ITSA with business or property income over £10,000 per year, from accounting periods beginning on or after 6 April 2023; and for all other taxpayers in ITSA, from accounting periods beginning on or after 6 April 2024.

Contactless payment card limit

Following a public consultation by the Financial Conduct Authority, the government has approved an increase to the legal contactless payment limits previously set by the European Commission. This will allow banks to support single contactless payments up to £100, and cumulative contactless payments up to £300, without the need for customers to input their chip and pin. The government hopes the banking industry will implement the new limits later this year.

Budget 2021 links:

March 4, 2021