Many businesses entered 2021 with a renewed optimism. The news of the vaccine promises a path out of the pandemic and there is light at the end of the tunnel.
However, worrying statistics from the Federation of Small Businesses (FSB) show that more than 250,000 small businesses across the UK are set to close for good in 2021.
The government is increasing its support package and businesses such as V4B Business Finance are continuing to support those with financial initiatives designed to bolster those companies during times of uncertainty.
We look at some of the changes due in 2021 which could have an impact on British businesses.
The government allowed businesses to defer self-assessment tax payments during the tax year 2020/21. Self-employed businesses with a tax bill of up to £30,000 due on January 31, 2021 can make the payment in instalments, delaying full payment until January 31, 2022. However, businesses must apply to the HMRC to make a deferred payment.
Income tax allowances and national insurance limits will increase from April 6 this year. Personal allowance for 2021/22 will increase to £12,570 while the basic rate limit for 2021/22 will be £37,700. National Insurance limits and thresholds for 2021/22 will also increase in line with CPI figures.
How the off payroll working rules (IR35) are used will change on April 6 2021. The new rules will apply if a company employs contractors on a self-employed basis and companies will now be responsible for deciding a worker’s employment status. This should have been introduced in April 2020 but was deferred to this year.
Making tax digital
HMRC has published its consultation on Making Tax Digital for corporation tax. It hopes to begin the voluntary pilot in April 2024 but it will not be compulsory for companies until at least 2026. Businesses will be responsible for maintaining their VAT records digitally using compatible software.
HMRC has a consultation on introducing Making Tax Digital for Corporation Tax. HMRC is looking for views from companies that pay corporation tax to submit views. These must be uploaded by March 5 this year. CLICK HERE for more information.
A final hour Brexit trade agreement was reached just before Christmas which means doing business with Europe has now changed. Businesses who deal in exports or imports to Europe will have to follow new guidelines. Those businesses who move goods between the UK and EU, which involve customs declarations, customs duties, VAT on imports, safety and security declarations will be affected. For more information CLICK HERE
The Treasury has confirmed that the budget will go ahead this March. Rishi Sunak is likely to include support for businesses and tax is set to be a headline feature. Given the amount of government spending throughout the pandemic, the government may be forced to introduce some tax changes and rate increases. The budget will be held on March 3, 2021.
The original furlough scheme introduced during the first lockdown has been extended to April 30 2021. The government will cover up to 80% of a furloughed employee’s wages for unworked hours with a cap of £2,500.
The government has also extended the Self-Employed Income Support Scheme until April 2021 and has plans to introduce a fourth grant for further support.
Businesses, such as those in the hospitality industry which are unable to stay open can apply for grants of up to £3,000 per month. There is also the option of a one-off grant of up to £9,000.
The Coronavirus Business Interruption Loan Scheme (CBILS) has been extended and businesses across the UK have until the end of March to access the initiative. It was created by the government for small and medium businesses to support those who have lost revenue or have had cash flow disrupted due to the COVD-19 outbreak. Under the CBILS’ scheme the government provides an 80% guarantee on all loans taken out on the scheme. Lenders can now extend the loan term up to 10 years rather than six years. V4B Business Finance is an accredited provider of the scheme.
V4B Business Finance
V4B Business Finance has continued to operate throughout the pandemic and can arrange traditional funding, both unsecured loans and asset finance. Decisions can be made in as little as 24 hours providing a lifeline for many small businesses.
For a FREE business funding consultation contact:
Call 01978 668939