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2021 Budget Actions

2021 Budget Actions

We've taken some time to digest the recent budget to come up with the following 8 actions:

 

  • With the gradual tapered increase of Corporation tax from 1st April 2023, and although it seems a long way away, it's worth starting to consider pension contributions and optimal salaries for directors.

 

  • Another thing to consider as an extension to the above point is electric company cars instead of a taxed dividend to pay for a car privately.

 

  • If you're planning on systems improvements using new software depending on how urgent - sign up for the 'Help to grow digital scheme' and wait for the scheme to launch with up to 50% of subscriptions up to £5000.

 

  • The 'Super Deduction' ... So if you are about to invest in plant and machinery such as according to HMRC: solar panels, computer equipment and servers, vans, ladders, drills, office chairs and desks or electric vehicle charge points wait until 1st April as you'll be able to claim you'd be able to claim up to £250 in tax relief (as opposed to up to £190 per £1000)

 

  • If planning on when to 'reopen' in hospitality and leisure remember the VAT rate will remain at 5% until 30th Sept and 12.5% until April 2022, as well as restart grants from £6000 for non-essential retail to £18000 for hospitality and leisure.

 

  • Made a Loss in the company this year but not normally? - you may be able to reclaim tax paid over the last three years in relation to that loss on your next Corporation Tax return.

 

  • Furlough! - Its still here until 30 September 2021, although the employer starts to have to pay a percentage of the salary cost from July again (10% in July / 20% in August and September) in addition to the Employers National Insurance and Pension as now, and remember it can be used flexibly if needing to offer a percentage of an employees or directors hours.

 

  • If you still haven't paid any 2020 Deferred VAT? - You can apply using your company government gateway account before 21st June to no longer repay the VAT by 31st March 2021 but you have until 31st March 2022 to pay by instalments instead.

 

The above are only meant to provide an insight as to what you can action from the recent budget and if you are unsure about putting them into action, it goes without saying, be sure to seek the relevant advice.

All the best, Lauren & the team

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