UPDATE: You can read about the Tax Changes for 2022 on this page.

The new tax year began yesterday (6th April 2021). Even in a normal year, it’s a period that ushers in allowance, admin and tax changes. Throw into the mix the extra changes due to the coronavirus pandemic and Brexit and there’s a lot for businesses to keep on top of.

We thought it would be a good time to take stock. So, this post alerts you to the main changes that are occurring in April 2021. We’ve covered some of these already and point you to articles we’ve already written. For the rest, we’ve included a short summary of what you need to know.

Employing armed forces veterans 

A new initiative to make it less expensive to employ armed forces veterans has been given a lot of coverage in recent days. Essentially, if you employ a veteran after 6th April 2020, you can claim back employers’ National Insurance Contributions for the first 12 months.

It’s worth noting that the official definition of a veteran is very broad. A person qualifies as a veteran if they have served one or more days in the armed forces, including a day of basic training. Additionally, it does not matter when a person left the forces, as long as they have not since been employed in a civilian capacity.

The exemption is available until 5th April 2024. The relief applies to earnings between the secondary threshold and the upper secondary threshold. You can claim back employers’ NICs from April 2022. Government will publish details on how to do this.

The Super Deduction

If you invest in plant or machinery, you can claim the new Super Deduction. This is a 130% capital allowance deduction for each £1 of qualifying expenditure.

Vehicles (1): Van Benefit Charge

There is now a van benefit charge of zero for employees provided with zero carbon emissions vehicles. This applies to company vans that an employee can use privately.

Vehicles (2): Cars and capital allowances

The 100% first-year allowance for cars will only apply to electric cars or those with zero CO2 emissions. In addition, they must be bought new or unused.

The 18% writing down allowance will only apply to the purchase of cars with CO2 emissions of 50g/km or under. Please note that cars with higher emissions will qualify for a lower 6% rate.

VAT Returns

From 9th April, HMRC will stop accepting VAT Returns made with software that uses XML to make the submission.

If you think your accounting package may not comply, we can help you make the switch to modern cloud accounting software such as FreeAgent or Xero.

R&D Tax Credits

A new cap limits the amount of R&D tax credits that SMEs can claim to £20,000 plus 300% of its total PAYE and NI contributions. However, there are exemptions to this cap – read our article to find out more.

IR35 changes for the private sector

Major IR35 changes have now been applied to the private sector. Essentially, this could have serious ramifications for firms dealing with workers via a personal service company or other intermediary. Follow the link for more details.

National Minimum Wage

The NMA went up on 1st April. The current rates are published here.

Questions about allowance, admin or tax changes?

As always, if you are a THP client and you’d like any help or support concerning the above allowance, admin or tax changes, we can help. Simply get in touch with your account manager.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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About Karen Jones

Having worked for one of the world’s largest accountancy firms, Karen Jones uses her tax knowledge and skills to help clients obtain substantial reductions to their tax liabilities.

With an expanding portfolio of tax clients, Karen enjoys the variety her work brings her and particularly likes working with new businesses and people. With a growing number of tax clients, she frequently faces a variety of challenges and relishes the experience she gains as she solves them.

Karen likes the THP ethos: “I like the way the team has a professional, but friendly and down-to-earth approach – it creates a productive atmosphere that benefits everyone.”

Karen’s specialist skills:

  • Personal Taxation
  • Tax Efficient Planning
  • Trust Administration
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