March Newsletter

March Newsletter

Pre 6 April tax planning

With 5 weeks to go until the end of the Tax Year, it is time to make the most of your tax allowances this year. The first step to making the most of your tax allowances can mean looking closely at your pension. UK residents under 75 can add money to a pension and receive tax relief on it. You’ll automatically get basic rate tax relief (currently 20%) paid into your pension by the government. If you pay tax at a higher rate you could get up to a further 25%, but you’ll need to claim it by declaring any pension contributions you’ve made on your tax return.

To make the most of your pension, you need to know the Pension allowances that you are entitled to. If you have not used them to the full, there may still be time to top them up – and start planning on how you will use them next tax year. The annual allowance is the maximum you can invest in your pension each year that would be eligible for tax relief. It is currently £40,000, or your entire income, whichever is the smaller and there are lifetime allowances to consider. If you run a limited company then there are some actions you could consider such as dividend and salary planning, purchasing capital items to maximise capital allowances, research and development tax credits and a range of other matters.

 

The impact on the UK travel and tourism industry 

Last week the office for national statistics (ONS) released analysis of industries related to travel and tourism in the UK that have been affected by the coronavirus (COVID-19) pandemic, using data on business performance and the labour market. The main points raised from their analysis are:

 

          • Monthly air passenger arrivals to the UK fell from 6,804,900 in February 2020 to 112,300 in April 2020, a fall of 98.3%.
          • Greater London saw the largest fall in room occupancy of any English region from 2019 to 2020, with just 20% of rooms occupied in July 2020 compared with 90% in the same month in 2019.
          • Accommodation and travel agency businesses saw the sharpest decline in turnover during the first national lockdown, falling to 9.3% of their February levels in May 2020.
          • The proportion of businesses in travel and tourism industries trading peaked at 85% in October 2020, before declining in response to increasing restrictions in November.
          • In the three months to June 2020, employment in accommodation for visitors fell by 21.5% compared with the same three months of 2019.
          • In travel and tourism industries overall, the number of people aged 16 to 24 years saw the largest fall in employment of any age group between Quarter 3 (July to Sept) 2019 and Quarter 3, 2020.

As we are still in lockdown the results are not surprising. We hope that this sector bounces back in the summer once the vaccination programme and other measures stabilise the virus.

Advisory Fuel Rate for Company Cars

These are the suggested reimbursement rates for employees' private mileage using their company car as of yesterday, 1 March 2021. Where there has been a change the previous rate is shown in brackets. Note that for hybrid cars you must use the petrol or diesel rate. You can continue to use the previous rates for up to 1 month from the date the new rates apply.

Engine Size

Petrol

Diesel

LPG

1400cc or less

10p

 

  7p

1600cc or less

 

9p

(8p)

 

1401cc to 2000cc

12p

(11p)

 

8p

1601 to 2000cc

 

11p

(10p)

 

Over 2000cc

18p (17p)

12p

12p

                                                                                                                      

 

 

 

 

 

 

 

 

 

 

DIARY OF MAIN TAX EVENTS MARCH/APRIL 2021

19/03 - PAYE & NIC deductions, and CIS return and tax, for month to 5/03/21 (due 22/03 if you pay electronically)

01/04 - Corporation tax payment for year to 30/6/20 (unless quarterly instalments apply)

05/04 - End of 2020/21 tax year. Tax actions need to be taken by this date (see above)

19/04 - PAYE & NIC deductions, and CIS return and tax, for month to 5/04/21 (due 22/04 if you pay electronically)