|1 December 2021 – Due date for Corporation Tax payable for the year ended 28 February 2021.
19 December 2021 – PAYE and NIC deductions due for month ended 5 December 2021. (If you pay your tax electronically the due date is 22 December 2021).
19 December 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2021.
19 December 2021 – CIS tax deducted for the month ended 5 December 2021 is payable by today.
30 December 2021 – Deadline for filing 2020-21 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2022-23.
1 January 2022 – Due date for Corporation Tax due for the year ended 31 March 2021.
19 January 2022 – PAYE and NIC deductions due for month ended 5 January 2022. (If you pay your tax electronically the due date is 22 January 2022).
19 January 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2022.
19 January 2022 – CIS tax deducted for the month ended 5 January 2022 is payable by today.
31 January 2022 – Last day to file 2020-21 self-assessment tax returns online.
31 January 2022 – Balance of self-assessment tax owing for 2020-21 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2021-22.
Archives for December 2021
Readers are reminded that there is a tax-free allowance for the provision of an annual party or other event for the benefit of staff and their partners. The present limit to tax relief is £150 per head. If this amount is exceeded, the full cost of the benefit is taxable, not the excess over £150.
Where it’s not possible to calculate individual costs, an averaging process can be adopted. There are also other considerations that must be met to qualify for this relief.
Another way to benefit staff tax-free for Christmas is to consider making small gifts.
You don’t have to pay tax on a benefit (gift) to your employee if all of the following apply:
Gifts that fall into this category are known as a ‘trivial benefit’; and whilst they may be much more than trivial in substance, you don’t need to pay tax or National Insurance or let HMRC know you are making the gift.
Any gifts that do not meet this definition will likely be taxable.
Gifts to directors are treated in a similar fashion with one over-riding condition: a director cannot receive trivial gifts of more than £300 in total each tax year. This restriction only applies to the directors of “close companies”. A close company is a limited company with five or fewer shareholders.
Watch out for VAT charge
If you recover the input tax charged when you buy gifts for employees, and if the total value of gifts given to an employee in a tax year exceeds £50, then you will have to account for VAT on the total value of gifts provided. If this is the case, you may be advised to avoid recovering the VAT in the first place.
Business gifts are not allowed as a tax deduction against profits. The legislation treats gifts in the same way as business entertaining expenditure, which is also disallowed.
HMRC define a gift as:
“… something that is given to a person without receiving anything in exchange. It is offered voluntarily and without any expectation of a return. An example of this would be gifts provided for potential customers who take a test drive in a new car – there is no obligation to buy the car and so nothing has been given to the trader in return for the gift.
Gifts may also arise where goods or services are supplied at less than the cost to the trader. For instance, a hotel might offer meals to its suppliers at a nominal charge. Here the difference between the cost of the meal and the price paid is a non-allowable gift. By contrast, if a baker reduces the price of fresh bread at the end of the day, this is a normal commercial transaction (as the bread will be worthless by the next day) and the cost is allowed in full.”
o Dividends that form part of the basic rate band – 8.75% (7.5% 2021-22)
o Dividends that form part of the higher rate band – 33.75% (32.5% 2021-22)
o Dividends that form part of the additional rate band – 39.35% (38.1% 2021-22)
For most director/shareholders of smaller companies who have adopted the high dividend low salary approach to remuneration, will pay more tax as a result, but this should not affect the overall strategy.
If you are concerned by any aspects of the recent Budget, please call.
There was little good cheer in the Chancellor’s announcements to parliament on 27 October. A short summary of the good news is listed below: