September 2021

Fifth SEISS grant is open to claims

The fifth Self-employment Income Support Scheme (SEISS) grant covering the period May 2021 to September 2021 is open to individuals who are self-employed or a member of a partnership.

You must have traded in the tax year 2019/20 and submitted your tax return on or before 2 March 2021, and also have traded in the tax year 2020/21. You must either be currently trading but being impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus.

The amount of the fifth grant will be determined by how much your turnover (sales figure) has been reduced in the year April 2020 to April 2021. You will need a comparative sales figure to support this so please contact us if you are not sure how to calculate this.

HMRC has been contacting individuals who may be eligible based on their tax returns to give them a date from which they can make their claim. The claim criteria is different from previous grants so it needs to be carefully considered before the application is submitted.

National Insurance and dividend tax rate increases

This week the Government announced increases in NIC and dividend tax rates to help fund Health and Social Care.

Class 1 NIC payable by employees and employers on salaries and benefits in kind and Class 4 NIC payable by the self-employed, will rise by 1.25% from 6 April 2022. The limits at which NIC is payable has not yet been confirmed so the exact cost of the increase is not known.

From 6 April 2023, NIC rates will go back to current levels but the increase will remain in the form of a new “health and social care levy”, a new tax payable by those currently affected by the NIC increase and also by those exempt from NIC due to being at state pension age.

The government also announced a 1.25% increase in dividend tax rates from 1 April 2022, taking rates to 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate taxpayers.

The £2,000 dividend allowance will remain as will the current personal allowance and tax bands for the foreseeable future.

Company car advisory fuel rates

New company car advisory fuel rates have been published and took effect from 1 September 2021.

The guidance states: 'you can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 September 2021 are:

HMRC guidance states that the rates only apply when you either:

• reimburse employees for business travel in their company cars
• require employees to repay the cost of fuel used for private travel.

HMRC also advises that:

• you must not use these rates in any other circumstances.
• the Advisory Electricity Rate for fully electric cars is 4p per mile.
• electricity is not a fuel for car fuel benefit purposes

Dentists

HMRC has announced that from 6 April 2023, associate dentists will no longer be automatically treated as self-employed but will need to meet the same criteria as other workers in accordance with HMRC's Employment Status Manual and CEST, this being HMRC's “Check Employment Status for Tax” tool.

Dental practices will need to consider this with their associates in good time before the rules take effect.

Please do contact us if you would like to discuss any of the above further.