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2020/21 Personal Tax Return – Reminder 1

As many of you may be aware, the 2021 Budget was announced yesterday. 3 March 2021 and we wanted to highlight some of the key points that were mentioned.

Extended Furlough Scheme / Self-employment scheme

The Furlough Scheme has been extended to the end of September.

Employers will be expected to pay 10% towards the hours their staff do not work in July and that will increase to 20% for August and September as the economy begins to reopen.

Grants for businesses in retail, leisure and hospitality to support re-opening

Non-essential retail businesses will be entitled to receive grants of up to £6,000. Those businesses which open later or will be under more restrictions, including hospitality and leisure businesses, will receive grants of up to £18,000. 

Reduced VAT in hospitality extended to 30 September 2021

The 5% reduced rate will continue to apply until 30 September 2021. From 1 October 2021, such businesses won’t go straight back to the 20% rate and instead will pay an interim rate of 12.5% for another six months.

Recovery Loan Scheme to be introduced from April 2021 (replacing BBL and CBILS schemes)

The Recovery Loan Scheme which launches 6 April 2021 and is open until 31 December 2021 ensures businesses of any size can continue to access loans and other kinds of finance once the existing COVID-19 loan schemes close.

  • Term loans and overdrafts will be available between £25,001 and £10 million per business (Finance terms are up to six years
  • Invoice finance and asset finance will be available between £1,000 and £10 million per business (Finance terms will be up to three years)

More information on how and when you can apply along with the criteria for the eligibility can be found on the HMRC website.

Personal Tax Threshold Frozen at £12,570 from 2022 until 2026

We will see the basic rate personal allowance rise as planned to £12,570 from the new tax year in April 2021 and will remain at this level until April 2026.

Corporation Tax will increase from April 2023 to 25% for businesses making over £250k profits (profits under £250k will be taxed at a tapered rate)

Corporation tax rate will be tiered for the first time with firms making an annual profit of £50k or less continuing to pay the current 19% rate. Rates will then be tapered up to £250k profits when companies will pay the new 25% rate from April 2023.

2 Year Tax “Super-deduction” for business investment

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

  • a 130% super-deduction capital allowance on qualifying plant and machinery investments
  • 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.

Stay safe,

Adderley, Hill & Co Team

As the tax year has now passed, we can make a start on your personal self-assessment tax return for 2020-21. The return is due to be filed with HMRC by the 31 January 2022; we ask that you get the information over to us as soon as possible to avoid any last minute panics.

For any information sent in before 31 September 2021, your fee will remain the same due to a discount given. However this discount will not be given for any information received after 1 October 2021.

Please supply us with the following information;

Employment Income:

All employment income earned from 6 April 2020 to 5 April 2021
•    P60 for 2020/21
•    P11D for 2020/21
•    Provide details of Professional subscriptions paid
•    Mileage – are you reimbursed above HMRC’s 45p/25p per mile? If so, provide details (miles, rates etc.)
•    Any other relevant information (if applicable)

Please note, if we prepare your payroll, we will hold all these details and nothing is required from yourselves.

Self-Employment Income:

Please provide us with details of turnover and expenses incurred in respect of your sole trader/partnership business. It is normal practice for us to prepare profit & loss accounts for self-employed income so please forward us the information to do this.

Please let us have any supporting paperwork (invoices, receipts, bank statements etc).

If you use software, please either confirm the system is up to date or send us a back-up.

Interest Income:

All interest earned from 6 April 2020 to 5 April 2021
•    Provide source
•    Gross interest
•    Tax deducted
•    Net interest
(Please also state if this is a joint account)

Please note, ISA’s are not taxable and do not have to be declared on your tax return.

Dividend Income:

All dividend income received from 6 April 2020 to 5 April 2021
•    Provide source
•    Shareholding
•    Payment date
•    Dividend received
•    State is a script dividend (no monies received, shares purchased instead)

Please note, if we prepare your company accounts for you, we will hold all dividends distributed details and nothing is required from yourselves. Dividends over £2k per annum are liable to 7.5% income tax as per HMRC.

Pension Income:

All pension income received from 6 April 2020 to 5 April 2021
•    P60 for 2020/21
•    State Pension Details – amount received weekly
•    If year 1, state date first received
•    State if any tax deducted from any sources

If you are unsure on the above please send over all relevant information.

Rental Income:

Please provide us with details of rents received and expense incurred in respect of let properties. Please state whether furnished or unfurnished and whether this is a holiday let or not. Please contact the office should you have any queries. It is normal practice for us to prepare rental accounts for property income so please forward us the information to do this, to support the self-assessment tax return.

Other Income:

Please let us have details of any other income you received, whether you believe it to be taxable or not. That way, we can make the appropriate assessment and ensure it is correctly taxed where applicable. Some examples are, social security benefits and cash lumps sums.

Tax Relief:

Did you contribute to a pension during the period of 6 April 2020 to 5 April 2021? If so, please let us have:
•    Pension Provider
•    Contribution Dates
•    Amounts

Did you invest in either a VCT or EIS scheme during the period of 6 April 2020 to 5 April 2021? If so, please let us have:
•    Investment Company
•    Investment Date
•    Amount
•    Send us a copy of the Tax Relief Certificates received (if applicable)

Did you donate to charity during the period of 6 April 2020 to 5 April 2021? If so, please let us have:
•    Charity Name
•    Donation Date
•    Donation Amount
•    Was this a Gift Aid donation?

Capital Gains Tax:

Did you dispose of any assets (property, shares, art etc) during the period of 6 April 2020 to 5 April 2021? If so, please let us have:
•    Item Details
•    Date Purchased
•    Purchase Price
•    Date Sold
•    Sale Price
•    Associated purchase/selling professional costs

Child Benefit:

Did you or your partner receive child benefit during the period of 6 April 2020 to 5 April 2021? If so, please let us have:
•    Amount received
•    Number of children received for
•    Start date (if during the tax year)

Student Loan:

Are you liable for either Plan 1 or Plan 2 graduate or postgraduate student loan deductions for 2020/21? If so, please confirm to us from what date, and which plan relates to you.

We will gladly accept records via email or post. For anyone wanting to drop records off, we are now back and fully operational from the office. However we do still ask if you could call ahead of dropping off your records as we are still abiding by social distancing measures and wearing masks.

If you need any clarification on what you should provide then please contact our offices on 01527 872 752.

Many thanks,

Adderley, Hill & Co Team.

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