New Tax Year - New Personal Allowances

The 2021/2022 tax year brings an increase in personal allowances. The allowances in England and Wales are:

Once your taxable income goes above £100,000 your Personal Allowance is reduced down to zero and is completely gone for income over £125,140.

The Scottish Income Tax rates are:

Like England and Wales you do not get a Personal Allowance if you earn over £125,140. 

Once your taxable income goes above £100,000 your Personal Allowance is reduced down to zero and is completely gone for income over £125,140.

Budget: 3rd March 2021

The Chancellor, Rishi Sunak, has now delivered his second budget which brought a long-term recovery plan, further covid support and an encouragement on investment.

Here are the core tax announcements: 

• SEISS grant 4 will go live from the end of April with a 5th and final grant in July. The 19/20 tax return will now be taken into consideration, as long as it was submitted by midnight on the 2nd March 2021, further details on grant 4 can be found here; 
• Working Tax Credit claimants will also be given more support for the next six months, with a one-off payment of £500.The Universal Credit uplift of £20-a-week will continue for another six months;
• Fuel duty will be frozen;
• No rise to Income tax, National Insurance or VAT;
• Personal tax threshold frozen at £12,500 but will increase next year to £12,570, but it will be kept at this level until 2026;
• The stamp duty holiday on properties worth up to £500,000 will be extended until the end of June. With a new mortgage guarantee scheme so first-time buyers only need a 5% deposit;
• The furlough scheme will be extended until the end of September;
• Planned increases in duties for spirits, wine, cider and beer will be cancelled;
• Hospitality and tourism will continue to enjoy a 5% reduced rate of VAT for a further six months;
• Corporation tax will increase to 25% in 2023;
• Inheritance tax thresholds, the pensions lifetime allowance, the annual exempt amount in capital gains tax and the VAT threshold will remain at the same levels for two years from April 2022;
• For the next two years, when companies invest, they can reduce their tax bill by 130% of their capital expenditure in a super deduction.

The Chancellor also commented on the following;

• An extra £19m for domestic violence programmes, describing domestic violence as "one of the hidden tragedies of lockdown";
• Incentive for businesses to take on new hires is confirmed with an increased payment of £3,000;
• UK Infrastructure Bank, located in Leeds;
• A further £1.6bn in funding will be provided to continue rollout of coronavirus vaccines and improve future preparedness;
• 'Help To Grow' announced means helping small businesses develop digital skills by giving them free expert training and a 50% discount on new productivity-enhancing software, worth up to £5,000 each;
• Announcement of eight freeports that are "special economic zones with different rules to make it easier and cheaper to do business";
• Visa reforms aimed at highly skilled migrants, including an unsponsored points-based visa for talent in science, research and tech, with new improved visa processes for entrepreneurs;
• Funding for the devolved administrations will also increase by £1.2bn for the Scottish government; £740m for the Welsh government and £410m for the Northern Ireland executive,
• There will also be £1bn for 45 new town deals and a £150m fund to help communities take ownership of pubs, theatres, shops and sports clubs that are at risk of loss.

FBTC Accountancy Services receives Feefo Platinum Trusted Service Award 2021

FBTC have won the Feefo Platinum Trusted Service award, again! Feefo gives Platinum Trusted Service awards to businesses that have achieved the Feefo Gold standard for three consecutive years or more. FBTC are thrilled to have won platinum status once again. 

Steph Heasman, Director of Customer Success at Feefo, commented: “The Trusted Service award has always been about recognising companies that are outstanding in customer experience and generate great feedback from happy customers. 

Alan Gott, FBTC Manager stated: “This is brilliant news! The team work exceptionally hard, even more so through the challenges of 2020. We really do appreciate all client feedback as it helps us to continuously improve our service. Thank you to our clients for taking the time to leave Feefo reviews and thank you to the team for providing amazing service and support”.

Created by Feefo, Trusted Service is awarded only to businesses that use Feefo to collect genuine reviews and insights. Businesses who meet the high standard, based on the number of reviews they have collected and their average rating, receive the award. A highly valued badge of approval, this accreditation remains unique, as it is based purely on interactions with real customers. As all reviews are verified as genuine, the accreditation is a true reflection of a business’s commitment to outstanding service.

Feefo is a reviews and customer insights technology company that provides businesses with the tools to collect real, purchase-verified reviews and insights. Working with over 3,500 clients, Feefo ensures that all feedback is authentic, by matching it to a legitimate transaction, to increase consumer confidence and enable businesses to make smarter business decisions.

About Feefo

Feefo is a disruptive global technology company empowering brands to make smarter decisions and improve consumer experiences by leveraging the full potential of real customer reviews.

Feefo’s cutting-edge review platform is trusted by more than 3,500 brands including Next, Vauxhall, Iceland, Mazda, Expedia, Michael Page and JCB, who rely on it to supply smart insights that transform their ability to market, sell and build more rewarding relationships with customers.

A trusted partner of Google, Feefo’s technology and consultancy team possesses unique expertise and business insight, enabling brands to employ cutting-edge innovation that optimises the delivery of digital marketing and advertising.

Please visit: www.feefo.com

GoRoadie name FBTC as Industry Partner of the Year

At the end of 2020 GoRoadie named FBTC as their Industry Partner of the Year.

Go Roadie felt FBTC deserved this award because ‘For years FBTC have stood with instructors helping them with their year end accounts, offering a professional service from start to finish. With stellar reviews from instructors across the country, it's clear why they are trusted in this space’.

FBTC want to say thank you to all clients! Alan Gott, FBTC Manger said ‘After a very tough year, it is very nice to hear there have been such lovely comments made about our service’.

National Lockdown 3.0

A reminder of Government support available:

HMRC Time to Pay
As part of the Coronavirus support put in place by the government, HMRC have set up a Time to Pay service if you are unable to pay your tax bill. Your 2019/2020 tax return needs to have been submitted to HMRC before you are be able to use the online self-service option. You will then be able to set up a direct debit and pay any tax that is owed in monthly instalments over a maximum of 12-monthly payments. 
Full information can be found here.

SEISS Grant 4 
Further details on the 4th SEISS grant will be announced in due course. Applications for the 3rd grant can be made up until the 29th January 2021.
Here is the link to the GOV.UK webpage on SEISS Grants.

Universal Credit
If needed, you may wish to seek support through Universal Credit. Please be aware that whilst Universal Credit is not deemed to be taxable income, once in receipt of it, you will need to report any changes to your income, for example once you commence trading again following the relaxation of lockdown measures.
Click here to read more about Universal Credit.

Bounce Back Loans 
This loan is accessible to those that are based in the UK, have been adversely impacted by coronavirus and started trading before the 1st March 2020. The scheme is currently open until the 31st March 2021.
If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top the loan up, you must do this by the 31st January 2021. 
Full details are here.

Local Support
As everyone's situation is different, advice and guidance can vary. You can click here to use a helpful service to find out what other support you may be able to access if your business has been affected by coronavirus. This specific tool allows you to focus on your situation and what support is available in your local area.

HMRC Scams
HMRC have just announced that they are aware of fake texts circulating asking people to “click here” for a new grant. Do not reply to the SMS and do not open any links in the message. Anything relating to the government grants must be done through your Government Gateway account. 

How your trading conditions affect your eligibility for the SEISS

Applications are now live for the third SEISS grant and if you are going to apply you must do so by the 29th January 2021. HMRC have stated you must make an honest assessment of your business and you must be able to show you have experienced a significant reduction in profits. You must also meet all other eligibility criteria to make a claim.

We strongly recommend you refer to the examples provided by HMRC, their guidance can be accessed here, it is helpful for understanding what they mean by reduced demand or temporary closure. Here are a few examples;

Unable to trade and reasonable belief

A hairdresser has had to shut his shop due to government restrictions. He will not have any income due to the closure and reasonably believes the reduction in his trading profits will be significant. He is eligible to claim the third grant.

Reduced demand and no reasonable belief 

A café owner has fewer customers due to government restrictions on households mixing, which initially reduces her takings. She increases her prices and believes her trading profits will not reduce significantly, so she is not eligible to claim the third grant.

Unable to trade and no reasonable belief 

A builder has developed coronavirus symptoms and self isolates for 5 days before receiving a negative test result. During those 5 days he was unable to work from home but was able to rearrange his contracts. He does not believe there will be a significant reduction in his trading profits. He is not eligible to claim the third grant.

As expected HMRC are receiving high levels of contact, click here for the different ways to reach out to HMRC, if you need to. 

Lockdown Part 2

Winter Economy Plan

Rishi Sunak announced his Winter Economy Plan on Thursday 24th September. Rishi’s support was based on the outlook that 'People want to see us focused on the here and now'. Two key updates for the self-employed are outlined below.
 
SEISS Grant

The SEISS grant will be extended with two additional grants, the first covering the period November to January and the second covering February to April. The grant will be based on 20% of your profit and to qualify for the grants your must have qualified for the previous grants. Also, you must be trading but be facing reduced demand due to Covid-19. 

Paying HMRC

Previously, the Treasury had given anyone with a July 2020 Payment on Account a 6-month extension, allowing this payment to be made in January 2021. The Chancellor has also announced a further extension for all individuals due to pay HMRC in January 2021 (including the above payment on Account). It appears this extension will be in the way of a 12-month payment plan with HMRC, running from February 2021 to January 2022. To qualify you must owe HMRC less than £30,000. Unlike the previous extension an individual will have to apply for this extension, however, no guidance has been issued on how to make the application yet.

Further updates and advice will be issued as we know more. 

CHANGE IS THE ONLY CONSTANT THING IN LIFE

There is no doubting that the last few months have been extremely tough, and as we move through the restart and recovery there will be more changes to come. Hopefully, you are back in the passenger seat, raring to go and let’s hope we move through the rest of 2020 in a more positive way.

The lockdown saw the driver training industry come to a halt and home-schooling became a reality for many, as did the growth in Tik Tok challenges and baking banana bread! Many took to keeping themselves busy and it was also great to hear about driving instructors putting their skills to great use, I mean there is no one better than a driving instructor to take on a driving role for a supermarket, courier or the NHS.

With the mix of getting back to your day job and making lessons as safe as possible, we know you will have a lot to think about now. We wanted to make sure you have not missed any support that is available to you, especially as things are ever-changing. We do know a lot of self-employed fell through the cracks of the Government support and the mini Budget on the 8^th July was the last chance saloon for some freelance sectors. There has been a lot to take in over recent months so here are a few areas to recap:

SEISS SECOND GRANT

• Based on 70% of your trading profits
• Your business must have been adversely affected from 14th July
• Applications for the second and final grant are due to go live on the 17th August
• If parents and those who adopted, took time out of trading to care for children within the first 12 months of birth or 12 months of an adoption placement they will now be able to use either their 2017/2018 or both 2016/2017 and 2017/2018 self-assessments for the basis of their SEISS eligibility. All other eligibility criteria remain the same.

DEFER TAX PAYMENTS

• HMRC automatically deferred the July payments that were due
• You must pay by the 31st Jan 2021 if you deferred your July tax payment
• Remember your tax bill for the 2019/2020 tax year is also due 31st Jan 2021

BOUNCE BACK LOAN

• Provides access to borrowing that is between £2,000 and up to 25% of your turnover (up to a maximum of £50,000).
• No repayments for 12 months
• Make sure you have your 2019/2020 tax return done so the latest figures are included
• Always seek financial advice prior to borrowing

TAX TIPS

You might not have done your 19/20 tax return just yet (don’t worry, you have until the 31st Jan 21 to file online) but we wanted to highlight a few things ahead of your 20/21 return and to help you give your business that self-care that it needs.

Making Tax Digital (MTD) is still on the horizon, MTD is HMRCs plan to mandate digital record keeping. COVID-19 and the support provided by HMRC has been priority over recent months, but we are monitoring Making Tax Digital updates. Small changes now will mean it is an easier transition when the time comes. If you are not used to keeping digital records or operating through software it is best to get comfortable ahead of the change. A bookkeeping routine is important, yes you will likely prefer to watch the latest Netflix release, but it will help you to understand your businesses cashflow. It is one of the most important financial management tasks so that you know the income and outgoings of your business. This way you know if you have any cash reserves, vitally important when you see a period of reduced income. The best way to put it: 

Both SEISS grants are taxable and need to be recorded as income on the 20/21 tax return, make sure you record the amounts you received on the dates you received them.

Do not forget to include all PPE expenses, that relate to your business, in your tax returns. You are unlikely to have ever purchased such items for your business before, but the costs of such items will quickly add up.

We always advise clients to have separate business and personal bank accounts, it will make your life easier in the long run. Especially when looking for transactions or if an HMRC investigation ever pops up. You might also want another account to set aside your savings for your tax liabilities, out of sight and out of mind hopefully means it is easier to keep that pot of funds available. 

There is no one size fits all approach to this recovery, do what is best for you and your business. Reach out for help when you need it, stay safe, be aware of scams and most importantly try not to panic. 

Self-Employment Income Support Scheme (SEISS)

The online service is now available for the SEISS. You will need to apply through your Government Gateway ID. HMRC have said if you cannot claim online, there will be an alternative way to claim, as yet we don’t know what this will be. If you are eligible, HMRC will give you a date from which you can complete your claim. We would advise you to use the Government Gateway to do this, using this online service is beneficial to access other tools such as pension forecasts and National Insurance contributions

As soon as you complete your claim you will be advised if it has been approved and you should receive your payment within 6 working days.
 
If you haven’t already checked your eligibility you can do so via this link https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
 
To complete your claim, you will need the following information:

• Self-Assessment UTR 
• National Insurance number 
• Government Gateway user ID and password - if you do not have a user ID, you can create one when you check your eligibility online via the above link
• bank account number and sort code you want the grant to be paid into 

You will also have to confirm to HMRC that your business has been adversely affected by coronavirus.
 
As always be vigilant, if you receive texts, calls or emails claiming to be from HMRC, offering financial help or a tax refund and asking you to click on a link or to give personal information, it is a scam. You should email it to phishing@hmrc.gov.uk and then delete it.
 
This process and the guidelines surrounding it are new and constantly evolving, we will continue to share relevant updates with you as information is released.

COVID-19: SUPPORT FOR THE SELF-EMPLOYED

Budget 2020

The Chancellor of the Exchequer presented his Budget on the 11^th March 2020. Said to be a ‘people’s budget for the people’s government’ there was a key topic throughout, COVID–19. Mr Sunak stated the NHS will get ‘whatever it needs, whatever the cost’.

COVID – 19

The Budget announcements bring numerous temporary measures which are set to assist with the current worldwide pandemic. The measures have been put in place to help support those affected by COVID-19, whether that be as an individual or a business.

The chancellor also commented on those advised to self-isolate, even if they do not show symptoms, they are to receive statutory sick pay (SSP) if eligible.

Those who are not eligible for SSP, such as self-employed individuals, will see Employment Support Allowance (ESA) paid quicker with the qualifying number of sick days reduced from 8 to 1. This means that once you have got your sick note from 111 you can then contact the Department of Work & Pensions and begin the process of claiming ESA. Click here to find out more about ESA.

ESA is paid to those who are too sick to work, provided they meet certain conditions. It is worth £73.10 a week, or £57.90 for the under-25s.

If you do find yourself in a position where you need to access such benefits, we would always advise taking the medical advice from 111 and contacting the Department for Work & Pensions who can advise you fully on the processes you need to follow.

A 100% reduction in Business Rates for Small business’s was also introduced in the Budget, more interesting for a lot of very small business was a £3,000 grant which appears to be aimed at all small businesses. There is very little guidance available on this at the moment, we will follow up on this once information on who can apply and how to apply has been issued.

Finally, HMRC have been asked to assist taxpayers with payments to them, to that end a new team to deal with Time to Pay arrangements for business’s affected by Coronavirus has been set up. If you find your capital reserves are running low and you are worried about paying your next bill, we strongly recommend you call them on 0800 015 9559.

As Mr Sunak stated, ‘the current situation is temporary’, ‘life will return to normal’. However, ‘for a period, it is going to be tough’.

Will we see more money in our pockets?

The honest answer, probably not but the following are factors that provide an element of positivity. 

• From the 1^st April the National Insurance threshold is increasing from £8,632 to £9,500, meaning you can earn more profit before paying Class 4 National Insurance.
• Fuel Duty will be frozen for the 10^th consecutive year and there will also be a freeze in duty rates for beer, ciders and spirts. 
• Another tax to be cut is VAT on digital books, newspapers and magazines.
• The 5% rate of VAT on sanitary products - referred to as the "tampon tax" - will be abolished from January. 
• People can put a lot more into tax-free savings for children. The allowance for Junior ISA’s (Individual Savings Accounts) and Child Trust Funds will be increased from £4,368 to £9,000 in April. However, the typical amount saved is only about £1,000. 

The personal allowance will remain at £12,500 and there will be no changes to the tax rates. Additionally, for the self-employed there will be a slight increase in Class 2 payments, from £3.00 per week to £3.05.

Once thing we won’t need to brace ourselves for is the mammoth number of potholes in our roads. A massive £2.5bn is set to be invested within our local roads. Let’s see how that one pans out!

So, from supporting businesses, highlighting green priorities and supporting those in need it was a budget delivered in challenging times and one that saw some substantial spending commitments.

FBTC Accountancy Services receives Feefo Platinum Trusted Service Award 2020

FBTC Accountancy Services are thrilled to have won the Feefo Platinum Trusted Service award. This is an independent seal of excellence that recognises businesses for delivering exceptional experiences, as rated by real customers. Feefo have given the Platinum Trusted Service award to FBTC as they have achieved Gold standard for three consecutive years.
 
Alan Gott, FBTC Manager, commented: ‘We greatly appreciate clients taking the time to leave us feedback. Here at FBTC we take pride in supporting clients to the best of our ability’.

Congratulating FBTC on winning this year’s award, Steph Heasman, Director of Customer Success at Feefo, commented: “The Trusted Service award has always been about recognising companies that go way beyond the norm in customer experience and generate great feedback from happy customers.  

Well done team!

Another positive year ahead for the Driver Training Industry

FBTC are excited to share another year’s analysis on the Driver Training Industry. The report focuses on the key areas of Driving Instructors’ workload, earnings and levels of job satisfaction. A continued trend from last year is the presence of a smarter working week and high levels of job satisfaction.  

The overall findings of this year’s survey show another positive year;

Read the full 2020 Driving Instructor Review here 2020 Annual UK Driving Instructor Review.pdf (401KB)

THE FINAL COUNTDOWN

With 70 days go to file your 2018/2019 tax return, what are you waiting for? With plenty of fun and games to be had between now and the end of January don’t delay your tax return any more. You never know what could happen between now and the tax return filing deadline. Such as unforeseen circumstances to technical difficulties, to realising you don’t have all the required information or just getting caught up in the festivities! 
Last year 750,000 self-employed people missed the filing deadline and instantly received £100 penalty. HMRC received this massive amount of income from penalties and I am sure you would rather get some bargains in the January sales than pay for an unnecessary fine.
 
From those that missed the filing deadline there were some, let’s say creative, reasons reported to HMRC, which included;

• My mother-in-law is a witch and put a curse on me
•  I’m too short to reach the post box
•  I was just too busy – my first maid left, my second maid stole from me, and my third maid was very slow to learn
• Our junior member of staff registered our client in Self-Assessment by mistake because they were not wearing their glasses
•  My boiler had broken, and my fingers were too cold to typo

Having all the information is one thing, completing the return, using your allowances and paying the correct amount of tax is another. 
Angela MacDonald, HMRC Director General of Customer Services, said: “Help will always be provided for those who have a genuine excuse for not submitting their return on time but it’s unfair to the majority of honest taxpayers when others make bogus claims."

So, what do you need to complete your tax return, aside from a little less procrastination:
It is always good to check your options and instructing an accountant to support you with your tax affairs isn’t a bad thing! Yes, you will have to pay for the service, but it is an allowable business expense. which is included within your total outgoings and deducted from your total income.
Did you know 2,616 taxpayers submitted their tax return on Christmas Day last year! Don’t be included in this figure this year, spend more time listening for sleigh bells and less time on your self-assessment. 

About FBTC Accountancy Services 
Covering the whole of the UK, FBTC provides service to more than 2,000 clients. Wrapped up in one £30 monthly fee, FBTC will: 

• Self-employment registration 
• Compilation of annual accounts 
• Annual tax returns 
• All communications with HM Revenue & Customs 
• Access to making tax digital compliant software  
• Tax and accountancy advice 
  

To contact the team for a no obligation chat click here and complete the enquiry form to the right.

FBTC will keep you OnBalance

FBTC Accountancy Services have now released their new bookkeeping software, which is included as part of the all-inclusive £30 monthly fee. All FBTC clients will be provided with the Making Tax Digital (MTD) compliant software, that will make bookkeeping easy!

The MTD compliant software allows you to add income and expenses with a click of a button, scan your receipts and submit business records directly to FBTC.

The accounting software is perfect for small businesses and FBTC have taken time to ensure it is right for their clients. Alan Gott, FBTC Manager is thrilled with the new software, ‘We have just started rolling the new software out to clients and it is great to receive such positive feedback already, it is definitely the highlight of 2019 for the team and our clients’.

The secure access system called OnBalance, is an extremely accessible system that allows users to access data anytime and anywhere. As it is cloud based software all you need is an internet connection to log in. Perfect when you are out and about running your business. You can keep records on a real time basis which will mean you save time when it comes to record keeping and juggling your work life balance.

As FBTC will take care of maintaining, updating and continuous improvement of the system you will always be running the latest and greatest version.

The further benefit of the software is that you can easily separate your transactions, for example if you have multiple trades and/or property income. Before FBTC invite you to start using the software they will set it up to include each of your trades meaning you can simply register, login and start recording transactions within minutes. Once you have entered transactions the handy dashboard will give you some of the key performance indicators of your business such as total turnover and expenses.

So, what else would make the completion of your tax return easier, other than a great accountant and first-class bookkeeping software? We think quick submission to your accountant is vitally important. With a click of a button you can send FBTC your data instantly. Using OnBalance with FBTC, will also give you MTD compliance as you are keeping digital records and using software to submit your records.

MTD, for those that are non-VAT registered, isn’t now set to be mandated until April 2021 at the earliest and HMRC do need to confirm an exact roadmap of how it will be enforced but FBTC are keeping abreast of the MTD updates as they are published and will keep you fully informed.

If you would like to know more about the software or joining FBTC Accountancy Services complete the ‘Send us an enquiry’ form to your right or call us on 0344 984 2515.

Save your Valentine tax this year

Love is in the air, roses, wine and chocolates are everywhere and yet some of us are still thinking about tax. Although we would never give dating advice (trust me you really wouldn’t benefit), when it comes to tax, we really know our stuff. The Marriage Allowance is a little tax saving gift definitely worth having, a simple election could help you save around £238 in 2018/19, and while this may not seem like a lot, have you seen the price of roses, so every little helps.

I know we have made light of it here but please don’t read the above and think we are not serious, the days of huge tax savings are gone, so making as much of the little savings as you can is the best way to try and reduce you tax bill. If you or your partner aren’t making full use of your Personal Allowance, £11,850 in 2018/19, then this is something we would strongly recommend. The link below will take you to a HM Revenue and Customs website where you can make the election:

https://www.gov.uk/apply-marriage-allowance

If you are not sure about the election or would like to talk it over with someone please do call us, the team are here to help.