Are you up to speed? Here's some August updates
Working from home? How can you cut your tax bill?
If you’ve been working from home over the past few months as an employee, you may be able to claim a small reduction in your taxes. HMRC allows you to claim up to £6.00 per week worth of expenses without having to provide bills or other accounting paperwork to justify it.
However, that doesn’t mean you save £6.00 per week, just the PAYE tax you would have paid on that £6.00, which works out at £1.20 per week, or about £62.00 a year for the basic rate taxpayer. Or £2.40 per week, or £104.00 per year for the higher rate taxpayer. This is only claimable if you have had to work from home, not because you worked at home out of choice. It is possible to claim more that £6.00 per week, but you will need to provide paperwork to support your claim. If your employer already provides a working from home allowance that’s tax free up to £6.00 per week, you will not be allowed to make any additional claims. Also, If you have had to purchase, say a computer, desk, or office chair to enable you to work from home your employer may pay you back in full. If not, you can claim tax relief on what you have bought, as long as it was purchased and is used wholly, exclusively and necessarily for work purposes. You will however need to retain purchase receipts and claim back the exact amount spent.
Treasury sets out next steps for Making Tax Digital
Currently businesses above the mandatory VAT registration threshold of £85,000.00 are required to comply with Making Tax Digital for VAT legislation. From April 2022 the initiative will be extended to all VAT registered businesses including those with turnover which is below the VAT registration threshold. From April 2023 Making Tax Digital will apply to taxpayers who file self-assessment tax returns for business or property income which is over £10,000.00 annually.
HMRC outlines Job Retention Bonus criteria
HMRC has outlined the eligibility requirements for the Job Retention Bonus (JRB) that follows the furlough scheme as part of the Government’s measures to support the economy through the Covid-19 crisis. The JRB is a one-off payment to employers of £1,000.00 for every employee who they previously claimed for under the furlough scheme and who remains continuously employed through to 31 st January 2021. Eligible employees must earn at least £520.00 a month on average between the 1 st November 2020 and the 31 st January 2021. Employers will be able to claim the JRB after they have filed their PAYE returns for January 2021 and payments will be made to employers from February 2021.
Coronavirus Job Retention Scheme (CJRS) update
From August 1 CJRS continues to provide grants for furloughed workers, but no longer funds employer National Insurance or pension contributions. Employers now have to make these payments from their own resources for all employees, whether furloughed or not. From September 1 the Government will pay 70% of wages up to a cap of £2,187.50 for the hours furloughed employees do not work. Employers will need to pay 10% of furloughed employees wages to make up 80% of their total wages up to a cap of £2,500.00. Employers will continue to pay furloughed employees NI and pension contributions.
For clarification on any of the above matters please get in touch with us:
Email: info@blacktypeaccountancy.co.uk
Call: 01638 666 281
