Newsletter January 2021

Scammers posing as HMRC

We already have more than our fair share of adversity to deal with at present, don’t let criminals add to your woes by defrauding you of hard-earned cash resources.

HMRC has recently published a warning to taxpayers about scammers posing as HMRC employees. They said:

Self-Assessment customers should be alert to criminals claiming to be from HMRC.

The department knows that fraudsters use calls, emails or texts to contact customers. In the last 12 months, HMRC has responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious web pages to internet service providers to be taken down. Almost 500,000 of the referrals from the public offered bogus tax rebates.

HMRC offer the following tips to spot a tax scam. It could be a scam if it:

• is unexpected
• offers a refund, tax rebate or grant
• asks for personal information like bank details
• is threatening
• tells you to transfer money

Clients in receipt of similar requests, either online or by telephone, should call us so that we can check if the contact is genuine or fraudulent.

Other readers should not respond to any request received by email, text or a direct call. In particular, do not divulge any personal data.

Simply access the GOV.UK website and search for HMRC’s published contact numbers. Call HMRC and explain the request you have received and ask if they could check to see if it is genuine.

The transition period has ended

From the beginning of this month the Brexit transition period has ended. Negotiations to secure a trade agreement between the UK and the EU from 1 January 2021, have completed and we have a deal.

Readers who import or export goods from or to the EU will now need to face the following challenges in addition to those posed by COVID-19:

• Exchange of goods between the UK and the EU should continue with no tariffs, but importers and exporters will need to deal with additional customs regulations and consequent red-tape.
• Delays in supply lines as transport has to deal with border checks and UK ports deal with congestion caused by additional red-tape.
• Exporters to the EU will also need to comply with new regulations as will their EU customers who may also need a license to import goods from the UK. 
• Exporters will also need to factor in transport delays if their goods are sent by road.

The major upside to this outcome is that we now have certainty. Affected businesses would be wise to revise their business plans to accommodate these extra costs due to possible delays and customs charges.

We can help. Please call if you need help or advice.

The end is nigh...

In just three short months the present tax year ? 2020-21 ? will end midnight, 5th April 2021.

The UK’s tax code is predominantly time limited. Any reliefs and exemptions from UK taxes for 2020-21 will mostly expire at the end of the tax year. Accordingly, there is an imperative to review your tax affairs before this date to ensure that available reliefs are utilised or that penalising tax charges are legitimately avoided.

For example, for 2020-21:

• Every UK taxpayer is allowed to realise £12,300 of taxable gains without being subject to a Capital Gains Tax charge. Any unused allowance cannot be carried forward.
• For Inheritance Tax purposes there are a range of gifts that can be made tax-free.
• Taxpayers with income exceeding £100,000, perhaps for the first time, may have an opportunity to reduce the impact of loss of their personal tax allowance and avoid a marginal Income Tax rate of 60%.
• There is still time to consult with your pensions adviser to see if you could make additional contributions within the permitted limits. This may be the last year that higher rate tax relief is allowed if the Chancellor makes expected changes to restrict this relief in the forthcoming budget.

Clearly, we all have different personal and financial circumstances so there is no one-size-fits-all approach that can be taken. There are no guarantees that you could take advantage of current exemptions and reliefs, but please call if you would like to discuss your options.

Strategies for the self-employed

The end of the calendar year is a popular accounting date for many businesses, but for those of us with a year-end accounting date of 31 March 2020, reviewing your management accounts for the nine months to the end of December 2020 can have real benefits. For example:

• If you are self-employed and for the nine months you are predicting lower profits for 2020-21 (compared to 2019-20) it may be possible to reduce your self-assessment payment on account due at the end of January 2021. Many self-employed persons adversely affected by COVID disruption will be in this position. Contact us so we can file an appropriate election.
• If you are self-employed and your profits are predicted to be higher for 2020-21, then you may have underpaid your self-assessment tax for 2020-21. Again, contact us so we can estimate this possible underpayment and work out a realistic savings plan to accumulate the necessary funds.
• When working out your taxable profits for 2020-21, don’t forget to include any Self-Employed Income Support received or other COVID related grants.
• Use the nine months figures to update your financial budgets for 2020-21. We recommend that all businesses undertake this task as it will identify high points and low points in your cash flow and solvency. Please call if you need help with this task. If you have never created a budget before we can help you crunch the necessary numbers.

Needless to say, if you are concerned by the historical results to 31 December 2020 or the outlook for 2021, let’s get together and see how best to meet these challenges. With the external pressures that EU disengagement may pose for your business this is not a time for wishful thinking. Be prepared.

Tax Diary January/February 2021

1 January 2021 - Due date for Corporation Tax due for the year ended 31 March 2020.

19 January 2021 - PAYE and NIC deductions due for month ended 5 January 2021. (If you pay your tax electronically the due date is 22 January 2021)

19 January 2021 - Filing deadline for the CIS300 monthly return for the month ended 5 January 2021.

19 January 2021 - CIS tax deducted for the month ended 5 January 2021 is payable by today.

31 January 2021 ? Last day to file 2019-20 self-assessment tax returns online.

31 January 2021 ? Balance of self-assessment tax owing for 2019-20 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2020-21.

1 February 2021 - Due date for Corporation Tax payable for the year ended 30 April 2020.

19 February 2021 - PAYE and NIC deductions due for month ended 5 February 2021. (If you pay your tax electronically the due date is 22 February 2021)

19 February 2021 - Filing deadline for the CIS300 monthly return for the month ended 5 February 2021.

19 February 2021 - CIS tax deducted for the month ended 5 February 2021 is payable by today.