February Newsletter

February Newsletter

BUDGET DAY IS 3 MARCH

There has been a lot of speculation on what will be in Rishi Sunak’s second Budget in early March and whether there is any tax planning that you should consider before then.

The government will have to start paying down the massive £2 trillion of borrowings at some stage. Increasing tax rates would send the wrong message when the government is trying to stimulate economic recovery. 

What the Chancellor is more likely to do is abolish or restrict some of the generous tax reliefs that we have got used to taking advantage of. That would have the effect of raising tax revenue without increasing headline rates.

Although likely to be unpopular with Conservative party voters and backbenchers, it is possible that the Chancellor will target pension tax relief and capital taxes in his Budget. The changes may well be announced as a “simplification” of the rules but that often hides tax raising measures in the small print!

Those buying property might also want to speed up those transactions if they can, as the beneficial stamp duty land tax rates are scheduled to increase from 1 April 2021.

Listen out in the Budget as the Chancellor might possibly announce an extension of the SDLT relief to support the property sector for a few more months.

Another bit of good news to listen out for would be yet further extensions in the CJRS furlough and SEISS grant schemes. These grant schemes are currently scheduled to end on 30 April and it would be nice to get a bit more notice this time.

 

WAYS TO STAY MOTIVATED 

It can be challenging to get yourself motivated in the first couple of months of the year. Here are some practical ideas which may help.

Give yourself time It may sound counter-intuitive but waking up earlier can set you up for a more productive day. Waking earlier and giving yourself time to have breakfast and to focus on the day ahead can allow you to prioritise key tasks.

Celebrate wins Every day is a fresh start. Celebrate the little victories in your day. It could be as simple as sending an email today rather than delaying until tomorrow or making some progress on a project. If you make time to celebrate each little victory, you will feel more rewarded and happier with yourself, increasing your work mentality and boosting your motivation.

Set new goals for the year ahead The start of a new year is an opportunity to take on challenges. Maybe this will be the year that you win your biggest client or launch a new product or service. Once you set your goals, review them regularly and try to focus on progressing at least one of them each day.

Prioritise Always start with what is most important to you. Make time for your family - even if it’s just sitting down and having a meal together each day. When it comes to work, focus on progressing your key objectives rather than allowing your inbox to dictate your day. Multi-tasking is not an effective approach. Focus on doing one thing at a time and doing it properly.

Take control of your wellbeing One hour of exercise is only 4% of your day. View it as an investment in your wellbeing. The return on that investment is more energy, less stress, better sleep and more productive and focused work. As investments go, it’s worth committing 4% of your time to your wellbeing.

 

POSSIBLE INHERITENCE TAX CHANGES

The OTS suggested simplifying IHT on lifetime gifts including reducing the period of potential exemption from 7 to 5 years.

Such a change would mean that the donor would only be required to survive for 5 years following a gift for the transfer to be exempt from IHT.

The OTS also suggested that the conditions for Business Property Relief might be tightened up by aligning the rules with the definition of a trading company for CGT. This relief currently provides 100% relief on the transfer of shares in an unquoted company. The suggested change would mean that more transfers of shares would potentially be liable to inheritance tax and may require a careful review of your plans if you are looking to pass on your business.

 

DIARY OF MAIN TAX EVENTS FEBRUARY/ MARCH 2021

Date

What’s Due

19/02

PAYE & NIC deductions, and CIS return and tax, for month to 5/02/21 (due 22/02 if you pay electronically)

28/02

Revised tax self-assessment return deadline

01/03

Corporation tax payment for year to 31/05/20 (unless quarterly instalments apply)

02/03

5% penalty imposed on 2019/20 income tax, CGT, class 2 and 4 NIC still unpaid at this date unless a payment plan has been agreed with HMRC

 

19/03

PAYE & NIC deductions, and CIS return and tax, for month to 5/03/21 (due 22/03 if you pay electronically)