October Newsletter

October Newsletter

Fletcher Thompson have merged with Athena Business Services

As of Friday 1 October, Fletcher Thompson and Athena Business Services became one almighty powerhouse.

The merge will enable us to expand our offering to our clients by bringing the expertise, skills and knowledge of Xero Accredited and Xero trained Athena Business Services staff member, Amy Rapin. Amy joined Athena Business Services in July 2019 and we are really looking forward to working with her as the two businesses combine.

Although Kathryn has been Xero accredited for a number of years, it has always been under the Athena banner, and it felt like the right time to combine both businesses in what we can only see as a positive move for both us and our clients.

 

Making Tax Digital for Income Tax postponed until April 2024

The government have decided to postpone the introduction of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) until the tax year beginning in April 2024.

The reason for the postponement is to allow the self-employed & buy to let landlords an extra year to prepare for the digitalisation of Income Tax & to also give HMRC more time for customer testing of the pilot system. The start date for partnerships to join MTD for ITSA has been put back still further to the tax year beginning in April 2025.

There has been no change to the £10,000 per annum gross income threshold which means that most self-employed traders & buy to let landlords will be mandated to comply with MTD for income tax from April 2024.

For many businesses, MTD is a natural extension of the way they already operate and evidence shows that they are already experiencing wider benefits and reductions in input errors.

 

1.25% Increase in NICs and tax on dividends to fund health and social care

From April 2022 it is proposed that there will be a 1.25% rise in National Insurance Contributions (NICs) to be paid by both employers and workers. This will then become a separate Levy on earned income from 2023/24 - calculated in the same way as NIC and appearing on an employee's payslip.

It is important to know that the 1.25% increase also applies to the Class 4 contributions paid by the self-employed on their profits. The Class 1 NI contributions paid by employees increase to 13.25% of earnings above £9,568 and the self-employed rate increases to 10.25%. The 3% differential remains for the time being, although there are rumours that the rates will align in the future. Above £50,270 earnings or profits the rate will be 3.25%.

The employers Class 1 NIC rate will increase from 13.8% to 15.05% from 6 April 2022, however many small businesses are able to set off the £4,000 employment allowance against their employers NIC liability. Many workers operating through personal service companies to whom the new “off-payroll” working rules apply will also be caught by the proposed measures.

 

Advisory fuel rate for company cars

As the result in recent increases in petrol and diesel prices HMRC have increased the advisory fuel rates that apply for the reimbursement of employees' private fuel for their company cars. The same rates apply when the employer reimburses employees for fuel used for business journeys in their company car.

The new rates have applied since 1 September 2021. Employees who have all the fuel for their company car paid for should consider reimbursing their employer for private use to avoid a private fuel benefit being charged. Where there has been a change the previous rate is shown in brackets:

Engine Size

Petrol

Diesel

LPG

1400cc or less

12p

(11p)

 

7p

1600cc or less

 

10p

(9p)

 

1401cc to 2000cc

14p

(13p)

 

8p

1601 to 2000cc

 

12p (11p)

 

Over 2000cc

20p

(19p)

15p

(13p)

12p

 

 

 

 

 

 

 

 

 

  

 

 

DIARY OF MAIN TAX EVENTS OCTOBER / NOVEMBER 2021

Date

What’s Due

05/10

Deadline for notifying HMRC of chargeability for 2020/21 if not within Self-Assessment and receive income or gains on which tax is due

19/10

PAYE & NIC deductions, and CIS return and tax, for month to 5/10/21 (due 22/10 if you pay electronically)

01/11

Corporation tax for year to 31/01/2021, unless quarterly instalments apply

19/11

PAYE & NIC deductions, and CIS return and tax, for month to 5/11/21 (due 22/11 if you pay electronically)