In the current economic climate, there are a host of financial, commercial and practical pressures affecting individuals and businesses.
Here, SLJ Accountants provides a summary of the more important tax issues to consider, which may help to reduce the tax burden now and as the country’s lockdown measures are eased.
Company owners
- Make sure that you know all the statutory filing deadlines for accounts and taxation as there has been some relaxation in the rules;
- Identify and schedule all direct and indirect tax liabilities;
Speak to HMRC at the earliest opportunity if you envisage that the company may be unable to pay its liabilities on time;- If VAT has been deferred make sure that this is factored into the company’s cashflow;
- If a ‘time to pay agreement’ has been agreed with HMRC make sure that the company keeps to the agreed terms;
- Consider the tax implications of any material one-off transactions and the ways in which tax liabilities could be reduced or deferred;
- Can the company make R & D claims to reduce a CT bill or generate a tax repayment?;
- If the company is operating in the creative sector are all tax breaks being used?;
- Consider the company’s remuneration policy for management and staff. This may need to be addressed to deal with the expected changes in working practices and the increased need to retain key staff once business returns to normal; and
- Make sure that for any fixed asset purchases the capital allowance position is fully understood. The Annual Investment Allowance is still £1 million.
Individuals
- If you choose to defer your 31 July payment make sure that this is factored into your cash flow for January 2021;
- Consider whether a repayment might be due for the tax year ended 5 April 2020. If one is expected, submit your tax return as soon as possible and ask HMRC for the repayment to be made direct to your bank account;
- Remember that for property disposals there is now a 30-day reporting and payment deadline; and
- If you are thinking of moving house, the SDLT threshold has been increased to £500,000 for all completions before 31 March 2021.
Administration
- A summer Budget is expected. There are likely to be changes which will affect all business and individual taxpayers; and
- The tax treatment of any Covid-19 grants, or other incentives, will need to be addressed.
For further guidance on how to reduce the tax burden as lockdown measures are eased, please get in touch.
Simon Littlejohns
SLJ Accountants Limited
17 July 2020