April 2021

Welcome to our monthly newswire to keep you informed of the latest business and tax issues. Please do contact us if you have any questions.

HMRC publishes details of final grants for self-employed

HMRC has published details of the eligibility criteria of the final two grants available under the coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS).

At the 2021 Budget it was confirmed that the fourth SEISS grant will be set at 80% of three months' average trading profits, paid out in a single instalment, capped at £7,500. It will cover the period from February 2021 to April 2021.

To be eligible for the fourth grant, self-employed workers must have filed their 2019/20 tax return by midnight on 2 March 2021. This includes those who became self-employed in 2019/20, provided they have filed according to the deadline.

Eligibility will be based on the 2019/20 self-assessment tax return or the last four years' tax returns to 2019/20. This may affect the amount of the fourth grant and it could be higher or lower than previous grants.

The other eligibility criteria are unchanged and applicants must either be currently trading but impacted by reduced demand, or be temporarily unable to trade due to COVID-19. They must also declare an intention to continue trading.

Claims can be made from late April until 31 May 2021.

The fifth SEISS grant will cover the period from May to September 2021 and will be available from July.

It will be set at 80% of three months' average trading profits, paid out in a single instalment, capped at £7,500, for those with a turnover reduction of 30% or more.

Alternately, it will be worth 30% of three months' average trading profits, capped at £2,850 for those with a turnover reduction of less than 30%.

Further details of the fifth grant will be provided in due course.

Government publishes details of Finance Bill 2021

The details of the Finance Bill 2021 have been published by the government.

The Bill outlines the key measures set to be brought into legislation, including many measures announced in the recent 2021 Budget.

In his Budget speech, Chancellor Rishi Sunak announced an extension of the stamp duty holiday in England; a super-deduction capital allowance; extensions of the Coronavirus Job Retention Scheme (CJRS) and the Self-employment Income Support Scheme (SEISS); and an extension of the VAT cut for the tourism and hospitality sectors.

The Bill will make sure the measures announced in the Budget take effect from 6 April 2021. It also legislates for tax changes that were previously consulted on and subsequently confirmed at the Budget.

£20 million SME Brexit Support Fund opens for applications

The UK government has unveiled a £20 million Brexit support package to help small and medium-sized enterprises (SMEs) with changes to customs and tax rules when trading with the EU.

The SME Brexit Support Fund aims to help businesses prepare for the implementation of further import controls which come into force later this year.

Businesses who trade only with the EU and are therefore new to importing and exporting processes will be encouraged to apply for grants of up to £2,000 for each trader to pay for practical support, including training and professional advice, to ensure they can continue trading effectively.

Businesses must meet certain criteria, including having been established in the UK for at least 12 months, having fewer than 500 employees and no more than £100 million in turnover.

The closing date for applications is 30 June. HMRC states that the fund may close for applications earlier if the full £20 million is allocated.

National Minimum and Living wages increases

UK workers are set to benefit from rises in the National Minimum Wage (NMW) and the National Living Wage (NLW) rates that took effect from 1 April 2021.

The NMW which applies to 21 and 22 year-olds has risen from £8.20 to £8.36 and the NLW has risen from £8.72 to £8.91. 23 and 24-year-olds are now eligible for the NLW, prior to 1 April 2021, only workers aged 25 and over were eligible.

The rates for NMW and NLW for all employees are as follows:

Previous rate (£)

Rate from April 2021 (£)

Increase (%)

National Living Wage

8.72

8.91

2.2

21-22 year-old rate

8.20

8.36

2.0

18-20 year-old rate

6.45

6.56

1.7

16-17 year-old rate

4.55

4.62

1.5

Apprentice Rate

4.15

4.30

3.6

The change follows recommendations made to the government by the Low Pay Commission (LPC) and marks the first step towards the government's target of the NLW reaching two-thirds of median earnings for workers aged 21 and over by 2024.

The LPC will make recommendations to the government on the 2022 NMW and NLW rates in October.

UK cuts electric vehicle grants by £500

The government has cut the Plug-in Car Grant and Van & Truck Grant by £500 and lowered the pricing cap on qualifying electric vehicles.

The Department for Transport will now provide grants of up to £2,500 for electric vehicles on cars priced under £35,000. This is a reduction from the current £3,000 available for vehicles costing up to £50,000.

This will mean the funding will last longer and be available to more drivers, the government statement said. Grants will no longer be available for higher priced vehicles, typically bought by drivers who can afford to switch without a subsidy from taxpayers.

The number of electric car models priced under £35,000 has increased by almost 50% since 2019 and more than half the models currently on the market will still be eligible for the grant.

ACCA Sage Accountants Club ACCA - Approved Employer ACCA - Practising Certificate Development Xero Certified Advsior FreeAgent