Tax breaks working from home

Employed persons

If your employer requires that you work from home, this will apply to many employees during the various COVID lock-down periods, HMRC will allow you to claim for any extra costs associated with working from home.

To save you calculating what these extra costs might be, HMRC has agreed a claim based on their estimate of the average extra costs you may experience if working from home.

The choices you have are therefore:

·         £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) ? you will not need to keep evidence of your extra costs

·         the exact amount of extra costs you’ve incurred above the weekly amount ? you will need evidence such as receipts, bills or contracts

You will get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

Additional costs include things like heating, metered water bills, home contents insurance, business calls or a new broadband connection.

They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax.

You cannot claim tax relief if you choose to work from home.

Self-employed persons

If your self-employment takes up more than 25 hours a month you could claim based on the following agreed flat rates per month or as above, you could work out the additional costs and claim those. The HMRC agreed rates for the self-employed are:

Marriage Allowance claim

HMRC published the following press release on Valentine’s Day 2021.

HMRC is encouraging married couples and people in civil partnerships to sign up for a tax break this year.

Marriage Allowance offers individuals the chance to transfer part of their Personal Allowance to their husband, wife or civil partner, which could reduce their tax by up to £250 a year. For some couples, this could mean a backdated payment of up to four years of claims which could be as much as £1,188.

It is free to apply for Marriage Allowance and HMRC is encouraging customers to claim directly through its online portal to ensure they receive 100% of the tax relief they are eligible for.

For the tax year 2020-21, the Marriage Allowance lets people earning £12,500 or less transfer up to £1,250 of their Personal Allowance to their husband, wife or civil partner ? if their income is higher and they are a basic rate taxpayer. This will reduce their tax by up to £250 for the 2020-21 tax year. Claims can also be backdated to April 2016 until 5 April 2021. After 6 April 2021, couples will only be able to claim back to the 2017-18 tax year.

The same criteria apply to married couples and civil partnerships in Scotland, except their partner must pay Income Tax at the starter, basic or intermediate rates between £12,501 and £43,430.

The Personal Allowance rate for the 2021-22 tax year is increasing to £12,570.

To claim, search the GOV.UK website for Marriage Allowance.

Marriage Allowance claims are automatically renewed every year. However, couples should notify HMRC if their circumstances change.

Exporters – simplified declarations

You can make a simplified declaration before you export your goods. This is called ‘presenting’ your goods to customs.

The first part of your declaration does not need as much information as a full declaration. When it’s approved, you can export your goods or move them from your premises.

You will still need to give customs more information, but you send it later in a supplementary declaration.

You need to do this within 14 days of your goods departing the UK.

You cannot make simplified declarations for goods:

·         covered by the Common Agricultural Policy

·         subject to export licensing (exceptions apply)

·         subject to excise duty (exceptions apply)

·         that require a full customs declaration

Simplified declarations cannot be used if goods are entered into a special procedure using authorisation by declaration.

Some controlled goods can be exported using simplified procedures, but you will need to include extra information in your declaration.

The process

The first part of this declaration is where you submit basic details of your export to customs. In most cases, you submit this electronically using the National Export System.

You will need to present your goods and declaration at a port or airport. Simplified declaration procedures can also be presented at a designated export place. A designated export place is an inland location approved by customs.

When your goods are cleared, you can usually then load and ship them without needing to present any supporting documents.

Supporting documents may be needed for some controlled goods which are prohibited or restricted.

You’ll still need to give customs more information, but you send it later in a supplementary declaration.

Minimum Wage levels from April 2021

From April 2021, the National Living Wage (NLW) will be the statutory minimum wage for workers aged 23 and over. It currently applies to workers aged 25 and over. The reduction in the NLW age threshold follows a review of the structure of the National Minimum Wage youth rates and recommendations made by the Low Paid Commission in autumn 2019. The threshold will further reduce to 21 by 2024.

The published rates for 2020-21 are:

Tax Diary March/April 2021

1 March 2021 – Due date for Corporation Tax due for the year ended 31 May 2020.

2 March 2021 – Self-assessment tax for 2019/20 paid after this date will incur a 5% surcharge.

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

19 March 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2021.

19 March 2021 – CIS tax deducted for the month ended 5 March 2021 is payable by today.

1 April 2021 – Due date for Corporation Tax due for the year ended 30 June 2020.

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

19 April 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2021.

19 April 2021 – CIS tax deducted for the month ended 5 April 2021 is payable by today.

30 April 2021 – 2019-20 tax returns filed after this date will be subject to an additional £10 per day late filing penalty.

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