Tax Tips and News

Newsletter issue - April 2021

Budget

The Budget finally took place on 3 March 2021. None of the speculated tax changes, e.g. raising CGT came to pass, although the main rate of corporation tax will increase in 2023. Several allowances, such as the personal allowance and CGT annual exempt amount have been frozen until April 2026. Further detail of the Budget announcements were included in our Budget newsletter.

Covid-19

In terms of Covid-19 measures, details of the fourth SEISS grant have now been published. Additionally, a fifth tranche for the period from May to September will be available in the summer.

The fifth grant will be worth:

• 80% of 3 months' average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
• 30% of 3 months' average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%

IR35

HMRC lost their appeal in the high-profile Upper Tribunal IR35 case of TV presenter Kaye Adams. This was perhaps slightly unexpected as a number of established hallmarks that would have suggested an employment relationship, such as mutuality of obligation and the degree of control the BBC exercised, were present.. The decisive factor was that Ms. Adams successfully argued that she carried on other business as an independent contractor, and that business was undertaken on a broadly similar basis to her work for the BBC.

Interestingly, the extent of her work with other clients seems to have been persuasive. The Tribunal commented that "the conclusion that we have reached is that, in an uncertain profession, Ms Adams had succeeded in those tax years for the time being at least in securing a reasonably stable revenue stream that was material in amount...if, over time, Ms Adams's other revenue streams had diminished so that the BBC work represented a greater percentage of her gross income, she might have tipped over into employment. However, HMRC accepted that in the tax years 2013/14 and 2014/15, the hypothetical contract was not of employment."

Other news

A new SME Brexit Support Fund is now open for applications. The scheme provides a grant of up to £2,000 to help with the costs of the additional administration required in respect of post-Brexit goods movement.

A business can apply:

• has been established in the UK for at least twelve months or holds Authorised Economic Operator status
• has always met its tax or customs obligations
• has no more than 500 employees or an annual turnover exceeding £100 million
• imports or exports goods between GB and the EU, or moves goods between GB and Northern Ireland
• intends to complete import or export declarations internally for its own goods
• requires more capability to cope with imports or exports despite using the services of someone else to complete the declaration documents.

More information and details of how to apply for the grant is available here.

The Welsh government announced that it will extend the Land Transaction Tax holiday until the end of June. The 0% rate will remain at £250,000 for an additional three months, before returning to £180,000 for completions on or after 1 July 2021.

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