Job Retention Scheme – Further Details

Updated 18 April 2020

Full guidance can be found on GOV.UK by clicking on the following link.

Some of the key details are as follows:

-The scheme will provide support to employers whose business has been severely affected by COVID-19 by way of a grant towards wages of employees who have been furloughed.

-A portal will be created for employers to claim 80% of furloughed employees usual wages up to £2,500 per month plus associated Employers National Insurance and minimum automatic enrolment employer pension contributions.

-It will be for a 4 month period (previously 3 months) starting from 1st March 2020 and the portal should be open on 20 April.

-It is open to all UK employers who had a PAYE scheme created and started on 19 March 2020 (previously 28 February 2020).

-Employees must have been on the payroll and a RTI submission made on or before 19 March 2020 (previously 28 February 2020).

-Employers should write to their employees confirming that they have been furloughed and this should be for a minimum period of 3 weeks.

-Once furloughed employees can not undertake any work for the employer.

-For salaried employees their last pay prior to 19 March 2020 (previously as at 28 February 2020) should be used to calculate the grant.

-For employees with variable pay, if they have been employed for more than 12 months then the claim can be the higher of, the same month last year or an average of the 19-20 tax year. If they have been employed less than 12 months then it will be an average since they started.

It is now confirmed Directors will be able to use the scheme as long as they meet all the normal eligibility requirements.

Making Tax Digital – Update

The commencement of Making Tax Digital for VAT (MTDfV) is now less than a month away. We have been working with our clients over the last few months to bring them up to speed and find the best solution to make sure they are compliant when MTDfV starts.

In recent weeks HMRC has updated their website with a step by step process guide which also includes the link for signing up to MTDfV. Please click here for a link to the webpage.

The key points to remember are that once you have filed your last VAT return under non-MTDfV you then need to sign up for MTDfV as mentioned above and following acknowledgement of this your software will need to be authorised.

This authorisation process will vary from software to software and you may need to speak to your provider on how this is done.


Tax Rates/Allowances 2019/20

Based on the Budget announcements of 29 October 2018 please see below some of the main tax rates & allowances for the forthcoming 2019/20 tax year.

Income Tax

Personal allowance £12,500

Starting rate £1-£5,000 20% (the rate on non dividend savings income is 0% where taxable non savings income does not exceed £5,000)

Basic rate £5001-£37,500 20%

Higher rate £37,501-£150,000 40%

Additional rate over £150,000 45%


Dividends are subject to different rates of tax. The dividend allowance of £2000 is 0%, dividends above this are taxed at 7.5% for starting/basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.

The basic rate band can be extended by gross Gift Aid donations and most personal pension contributions.

The personal allowance is reduced by £1 for every £2 on income over £100,000.

A high income child benefit charge applies where adjusted net income is in excess of £50,000. The charge is calculated at 1% of the benefit for each £100 of adjusted net income over £50,000 and therefore charges the full amount if adjusted net income exceeds £60,000.

There are differing rates of income tax for Scottish taxpayers which have not been outlined above.

Other allowances:

Married/civil partners transferable allowance £1,250 (available where one partner is a non taxpayer and the other is a basic rate tax payer)

Savings allowance £1,000 (£500 for higher rate tax payers and £nil for additional rate tax payers)

Trading income allowance £1,000 (if gross income is in excess of £1,000 then a deduction of £1,000 permitted if greater than actual expenses)

Property income allowance £1,000 (if gross income is in excess of £1,000 then a deduction of £1,000 permitted if greater than actual expenses)

National Insurance


Class 2 £3.00 per week but can be exempt if profits are below £6,365

Class 4 9% payable on profits between £8,632 and £50,000, 2% payable on profits above £50,000


Class 1 12% on earnings between £166 and £962 per week, 2% on earnings over £962 per week


Class 1 13.8% on earnings above £166 per week

Class 1A £13.8%


Class 3 £15 per week

Corporation Tax

Corporation Tax 19%

Tax payable on loans to participators 32.5% (can be recovered once loans have been repaid)


Compulsory registration if taxable supplies are above £85,000 within the previous 12 months or the next 30 days alone.

Capital Allowances

Plant and machinery

Annual investment allowance 100% (maximum £1m pa from 1.1.2019 to 31.12.2020 (£200,000 pa up to 31.12.2018 and from 1.1.2021)).

Long life assets and integral features 6% (reducing balance basis)

Other assets 18% (reducing balance basis)

First year allowance 100% (only available on certain expenditure)


CO2 emissions 50 g/km or less 100%

CO2 emissions 51-110 g/km 18% (reducing balance basis)

CO2 emissions over 110 g/km 8% (reducing balance basis)

Structures and buildings

Expenditure on non residential structures and buildings on or after 29.10.2018 2%

Capital Gains Tax

Annual exemption £12,000

Rate payable by basic and starting rate taxpayers 10% (8% surcharge on residential property)

Rate payable by higher and additional rate taxpayers 20% (8% surcharge on residential property)

Entrepreneurs relief lifetime allowance remains at £10m and where entrepreneurs relief applies there is a rate of 10%.

Note: From 6 April 2020 certain disposals of residential property must be reported and the tax paid to HMRC within 30 days of sale. Similar rules for non-residents come into force from 6 April 2019.

Child Benefit Charge – Planning

Having had several discussions recently regarding the child benefit charge please see below a reminder on when it applies and what can be done to mitigate it.

The high income child benefit charge was introduced in 2013 as a way for HMRC to recover some/all of the child benefit paid where net adjusted income is in excess of £50,000. The charge is calculated as part of the self-assessment tax return and is payable at 1% of the child benefit for each £100 of income over £50,000. This means by the time net adjusted income reaches £60,000 you have to pay all of the child benefit received back to HMRC. These thresholds have not increased since they were introduced in 2013 and as incomes rise more people will be caught by the charge.

One area that seems to catch people out is that the charge is payable by the highest earner but is based on whether the household receives the benefit. It is therefore not uncommon that one partner may have applied for and receive the benefit but it is the other that has to declare and pay the charge.

If you are claiming child benefit for 2 children the effective tax rate on income between £50,000 and £60,000 can approach 60% (if you have 4+ children that you claim for this becomes in excess of 70%) so planning in this area can save a significant amount of tax.

For the self-employed capital expenditure in a particular year could bring profits below £50,000 and a Limited Company can be used to smooth personal income and plan around this.

Personal pension contributions can be used by the above as well as those who are employed as these are taken into account to arrive at net adjusted income. They can be very effective if your income is in the £50,000 to £60,000 bracket as the actual ‘cost’ of making the contribution can be relatively small compared to the amount added to the pension.

If further advice/planning would be helpful in this area or if you have to complete a self-assessment tax return because of the charge please contact us.

Making Tax Digital


Over the past few years the government has been setting out its plans to transform the tax system, known as Making Tax Digital (MTD).

The proposals introduce digital record keeping and quarterly updating to HMRC by businesses, the self-employed and landlords for Income Tax Self Assessment, VAT and Corporation Tax.


The MTD requirements will apply to VAT registered businesses (where their turnover is over the compulsory registration threshold of £85,000) from April 2019. For Income Tax Self Assessment and Corporation Tax it will not be before April 2020 at the earliest.

What does this mean for your business

MTD for VAT will mean businesses must keep their VAT records digitally and provide their return information to HMRC via MTD compatible software. The software will need to link with HMRC so that information can be exchanged both ways. Spreadsheets will be classed as digital record keeping but will not be able to link with HMRC without bridging software. It is therefore expected many small businesses will need to move their record keeping across to compatible software in time to meet the requirements.

Where can we help

At present detailed information of what will be required is limited and many software providers are still working on making their software compliant. We will be communicating with our clients via post, telephone and in person (as well as through further posts on here) to keep you updated as things progress. We are talking with our software providers about what they will be providing as well as familiarising ourselves with what we expect will be the most commonly used pieces of software.

The service we provide will vary according to each clients requirements and we will be discussing this in the coming months. In the mean time if you have any questions on MTD please feel free to contact us.

Chancellors Budget 16th March 2016

Tax year 2016/17

Income Tax

Tax rates are:
0% between £0 and £11000
20% between £11000 and £43000
40% between £43000 and £150000
45% above £150000

Personal allowance is £11000 for everyone.

Note 1 – where income exceeds £100000 the personal allowance is reduced by £1 for every £2 of income above £100000.

Note 2 – the amount that married couples and civil partners can transfer to their spouse increases to £1100 (only applicable if both don’t pay above the 20% rate). Please use the following link if you would like to register for this

National Insurance


Class 2’s £2.80 per week but can be exempt if profits below £5965 (class 2’s for 2015/16 to be paid in January 2017 by way of the tax return)
Class 4’s  9% between £8060 and £43000
Class 4’s  2% above £43000


Class 1’s  12% between £155 and £827 per week
Class 1’s  2% above £827 per week


Class 1’s  13.8% above £156 per week

Corporation Tax

Gradual reduction from 20% in 2016/17 to 17% by 2020/21.


Compulsory registration if taxable supplies are above £83000 within the previous 12 months or the next
30 days alone.

The flat rate scheme can be opted for where turnover is less than £150000. You must leave the scheme if turnover goes above £230000.

The cash accounting scheme can be used where turnover is less than £1.35m. You must leave the scheme if turnover goes above £1.6m.

Capital Allowances

The annual investment allowance is £200000 for the calendar year 2016.

Writing down allowances remain at 18%.

Cars with CO2’s up to 75 g/km      100% (but only up to 50 g/km from April 2018)
Cars with CO2’s between 75 g/km and 130 g/km    18% (but only up to 110 g/km from April 2018)
Cars with CO2’s above 130 g/km    8% (but 110 g/km from April 2018)
Leased cars – disallowance of 15% if above 130 g/km (110 g/km from April 2018)

Capital Gains Tax

From 6.4.16, the higher rate of CGT will be reduced from 28% to 20%, and the lower rate will reduce from 18% to 10%. The 28% and 18% rates will continue to apply to chargeable gains on residential property.

The allowance remains at £11100.

Entrepreneurs Relief remains at 10% with a lifetime limit of £10 million.

Inheritance Tax

The allowance remains at £325000 per person (£650000 for married couples and civil partners).

Dividend Tax Changes

As announced in the budget on 8th July 2015 changes to the way dividends are taxed will be introduced from 6 April 2016.

The old system of the dividend tax credit will be abolished and there will be the introduction of a new dividend tax allowance of £5,000 a year. The new rates of tax on dividends above the allowance will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.

This change obviously has an impact on owner managed limited companies where dividends are used as part of remuneration. We will therefore need to look at each case individually to assess the impact and advise how this may be reduced.

The Second Budget 2015

On 8th July 2015 the Chancellor presented his first budget of this Parliament.

Business Tax
Corporation Tax will be reduced by 1% to 19% for the years beginning on 1.4.17, 1.4.18 and 1.4.19. A further 1% reduction will apply from 1.4.20 making the rate 18%.

Annual Investment Allowance has been changed with the rate set at £200,000 per year commencing from 1.1.16. The current allowance of £500,000 remains in place until 31.1.15.

Personal Tax
The personal allowance will increase to £11,000 on 6.4.16 and £11,200 on 6.4.17.

The higher rate (40% tax) threshold will increase to £43,000 on 6.4.16 and £43,600 on 6.4.17.

A new personal savings allowance will be introduced from 6.4.16 and will mean basic rate taxpayers can receive up to £1,000 of savings income tax free while higher rate tax payers can receive £500.

From 6.4.16 a change to the way dividends are taxed will be introduced. The current tax credit will be removed and replaced with a £5,000 dividend allowance. Dividends above £5,000 will be taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate (45%) taxpayers. Please see our separate article to follow.

On buy to let properties the amount of income tax relief on finance costs will be restricted to the basic rate. This will be phased in from 6.4.17 over the following four years. The restriction will not apply to furnished holiday lettings. Also from 6.4.16 the Wear and Tear allowance on furnished residential property will be replaced by the actual costs of replacing furnishings. There will also be an increase in Rent-a-Room relief from £4,250 to £7,500 from 6.4.16.

Inheritance Tax
An additional nil rate band where a residence is passed down to direct descendants will be introduced. From 6.4.17 this will be £100,000, from 6.4.18 £125,000, from 6.4.19 £150,000 and from 6.4.20 £175,000. These allowances can be transferred to the surviving spouse or civil partner. This potentially increases the the IHT nil rate band to £1 million for a couple from 6.4.20.

Other Changes
From 6.4.16 a new minimum wage will be introduced for those aged 25 and above. This will be set at £7.20 per hour.

The Employment Allowance will increase from 6.4.16 to £3,000 per year but will no longer be available to companies where the director is the sole employee.

Employers NI – Under 21s

With effect from 6 April 2015 every employer with employees under the age of 21 will no longer pay Class 1 secondary National Insurance contributions on earnings up to the upper earnings limit (£815 per week).

If you operate your own payroll and have employees under 21 please ensure the correct NI category letter is used to reflect these changes.

Marriage Allowance

From 6 April 2015 married couples and civil partners will be able to transfer some of their personal allowance to their spouse or civil partner.

Where a spouse or civil partner does not pay tax (their earnings are below £10,600) they can transfer up to £1,060 of their personal allowance to the other spouse or civil partner as long as they are within the basic rate of income tax.

If the full £1,060 of allowance is transferred then tax of £212 can be saved.

You can register your interest before April using the following and HMRC will then contact you.