News and tax updates to keep you informed.
The domestic VAT reverse charge for building and construction services finally comes into effect on 1 March 2021. The start date was originally 1 October 2019, but it was postponed by one year until 1 October 2020 to allow those affected more time to prepare. The start date was further delayed – until 1 March 2021 — as a result of the COVID-19 pandemic.
The Brexit transitional period came to an end on 31 December 2020. As a result, new rules apply from 1 January 2021.
National Lockdowns and local restrictions may mean that you are unable to meet the tests for your holiday let to qualify as a furnished holiday letting (FHL) for 2020/21. However, where this is the case, all is not lost as there are alternative routes by which your let might meet the FHL requirements.
The COVID-19 pandemic has meant that the traditional Christmas party could not happen in 2020. If, instead, you held a virtual event, you will be pleased to know that this too can benefit from the tax exemption for annual parties and functions. There is also good news if you opted to give your staff a seasonal gift, as this may fall within the scope of the trivial benefits exemption.
Under the extended furlough scheme, claims must be made within 14 days of the end of the month to which they relate (or by the following working day where this falls on a weekend). Consequently, if you are making a claim for December 2020, you must do this no later than 14 January 2021. When making claims for December and January, care must be taken not to fall foul of the rules in relation to claims over the Christmas holiday period.
There are a number of key tasks that you need complete by midnight on 31 January 2021. These include filing the self-assessment tax return for 2019/20, paying any remaining tax due for 2019/20 and, where applicable, calculating and paying the first payment on account for 2020/21.
The Annual Investment Allowance (AIA) enables a business which incurs qualifying expenditure to claim an immediate deduction when computing taxable profits. The deduction is capped at the amount of the AIA limit for the period which remains available. The AIA limit was increased from its permanent level of £200,000 to a temporary level of £1 million from 1 January 2019 to 31 December 2020. The Government have announced that the £1 million limit will apply for a further year – until 31 December 2021 – to help businesses to recover from the COVID-19 pandemic.
Earlier this year, the Government published a timetable for taking the Making Tax Digital (MTD) programme forward.
The Brexit transitional period comes to an end on 31 December 2020. From January 2021, new arrangements apply if you send goods abroad from the UK or bring goods into the UK. It is important that you check what customs declarations you need to make from 1 January 2021 onwards.
Although the deadline by which your 2019/20 self-assessment tax return must be filed online is 31 January 2021, an earlier deadline of 30 December 2020 applies if you want any tax that you owe for 2019/20 to be collected through PAYE. This can be advantageous as you can spread the cost across the tax year, rather than paying it in a single instalment.