Aaron Associates newsletter

Income Tax

The additional rate threshold is being reduced to £125,140 from 6 April 2023. The personal allowance is reduced by £1 for every £2 earned over £100,000 and is fully withdrawn once an individual’s income reaches £125,140. The additional 45% main rate and 39.35% dividend rates of tax will apply to income above this level. 

Dividends allowance

This being halved from its current £2,000 to £1,000 from 6 April 2023. It will be halved again to £500 from 6 April 2024.

Capital Gain Tax.

New HMRC one-stop online shop provides taxpayers with tax relief information

HMRC has launched a new one-stop online shop designed to provide taxpayers with information on the tax reliefs and financial help available from HMRC.

In a new section of the GOV.UK website, HMRC has listed financial support available to ensure individuals are not missing out. There is guidance on relief for childcare and work-related expenses, as well as information about savings and getting help if you cannot pay your tax bill.

Full details of the fifth SEISS grant, including a new turnover test which determines the level of the grant, are now available. We explain what has changed.

Level of grants

In most respects the rules for the fifth Self-employment Income Support Scheme (SEISS) grant are the same as for the fourth grant. What has changed is that the level of the grant depends on whether turnover has dropped by more or less than 30%.

Extension of Coronavirus Job Retention Scheme to 30th September 2021.

The Coronavirus Job Retention Scheme has been extended until 30 September 2021 and the level of grant available to employers under the scheme will stay the same until 30 June 2021.

Furlough Scheme Extended - Lockdown 2.0

The furlough scheme, or Coronavirus Job Retention Scheme to give its full name, was originally meant to end on 31 October 2020 and be replaced with a new Job Support Scheme (JSS). Job Retention Scheme has been extended for a month with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.

Mortgage Holidays

31 July: Taxpayers who have received CJRS or SEISS grants have 90-day period to inform HMRC of any overclaimed amounts, by law.

HMRC now has power to recover Coronavirus Job Retention Scheme (CJRS), Self-employment Income Support Scheme (SEISS), Coronavirus Statutory Sick Pay Rebate Scheme and coronavirus business support payments grants to which the recipient is not entitled, as well as to charge penalties.

1 July 2020 - Flexible furlough scheme opens.

30 June: Employers will be able to make claims for grants under the flexible furlough scheme (CJRS V2) from 1 July 2020.  

The first version of the Coronavirus Job Retention Scheme (CJRS), whereby employees had to be furloughed full time, ends on Tuesday 30 June 2020 and the deadline for claims is 31 July 2020.

Employees’ homeworking costs

The legislation specifically allows payments made by employers to employees to cover homeworker’s additional household expenses to be tax-free in certain circumstances.

Based on recent years HMRC will potentially issue at least 1 million late filing penalties..

Late filing penalties are as follows: