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Tax

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On Wednesday 3rd March, Chancellor Rishi Sunak announced the 2021 Budget which outlined this year’s steps to provide financial support and new opportunities for residents of the UK. The Chancellor set out the government’s tax and spending plans for the year ahead, and announced new measures to help businesses and jobs through the pandemic and to support the UK’s long-term economic recovery with a series of tax-raising plans to help rebalance the UK’s finances.

Please see below a few key points taken from last weeks budget:

Measures to mitigate the impact of Coronavirus:  

  • Extension of the Coronavirus Job Support Scheme (‘furlough payments’) to September 2021 across the UK, with employer contributions to salary from July.
  • Fourth Self Employment Income Support Scheme grant covering February to April 2021 to claim from late April. This is similar to the first three grants – and newly self-employed people who filed 2019/20 tax returns by 2 March may be eligible to claim for the first time.
  • No further support announced for people working as directors through their own personal companies.
  • Range of ‘Restart’ grants for businesses reopening after lockdown.
  • Recovery Loan Scheme from 6 April 2021: government to guarantee 80% of eligible loans from £25,000 to £10 million to give lenders confidence to support UK businesses, with some other loan schemes coming to an end on 31 March 2021.

Reliefs Extended:

  • Stamp Duty Land Tax Holiday on property transactions up to £500,000 extended from 31 March to 30 June 2021, with £250,000 threshold up to 30 September 2021.
  • Duties on alcoholic drinks and fuel frozen for the second year running.

Tax Year 2021/22:

  • Small increases in main Personal Allowance, Basic Rate Band and National Insurance thresholds confirmed, as already announced.
  • Lifetime Allowance for tax-advantaged pension funds, Inheritance Tax nil rate band, Capital Gains Tax annual exempt amount, ISA subscription limits all frozen at 2020/21 levels.
  • No increase in CGT rates announced, contrary to some speculation in advance, but there is the potential for this to be reviewed via a consultation later this month.
  • Corporation Tax rate remains 19% until 31 March 2023.
  • Personal Rate Tax bands and Personal Allowance are being frozen going forward.

To read the full 2021 Budget and Updated Tax Rates please click the links below. 

Ad Valorem Budget Summary 2021

2021/22 Tax Rates

If you have any questions regarding what was outlined in the budget update please do not hesitate to contact us:

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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R&D tax relief – upcoming changes

After a recent announcement from HMRC new rules will come into effect from 1 April 2021 for SME businesses. The new rules are being implemented to target fraudulent claims using UK companies to claim a repayable credit even though no R&D is being carried out in the UK. 

The new rules apply a cap on the amount of payable R&D tax credit an eligible loss-making company can claim. It is important to note that the new rules only apply to loss making businesses or where your R&D claim takes you into taxable losses. The cap will affect claims for accounting periods commencing on or after 1 April 2021. 

What is the cap? 

The cap limits the payable R&D tax credit to three times the total annual PAYE and NIC liability of the company plus £20,000. 

I’m claiming R&D tax credits, will I be affected?

If your claim meets any of the below criteria, you will not be affected.

  • You claim under the RDEC Scheme (large company) 
  • Your R&D claim doesn’t take you into taxable losses in the accounting period
  • Your payable R&D tax credit is less than £20,000 

A company may also not be capped if it meets the criteria of the following two tests:

  1. The company’s employees are creating, preparing to create or actively managing IP arising from the R&D project. 
  2. The expenditure on subcontracted work or agency workers is less than 15% of the overall R&D expenditure. 

Even though the new cap is designed to target fraudulent claims, there will be many genuine SME claims who will be affected by the new rules. If SMEs outsource large elements of their projects or have large consumable costs, they may well be impacted by the new cap. 

If you have any questions about the new claim cap rules then please contact us using our details below: 

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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Since 6th April 2020 if you have sold a UK property or land in the UK you must report and pay any Capital Gains Tax that is due to HMRC within 30 days of the completion of the sale.

You will need to report the sale of:

  • UK holiday homes
  • properties that have been let as rental properties in the UK
  • properties that have been inherited in the UK

You may not have to report the sale of:

  • properties that you use as your main home

You do not have to report the sale of foreign properties that are not in the UK within the 30 day deadline but you will have to report this on a Self-Assessment Tax Return if you are a UK resident.

All sales must be reported using a new HMRC online service and if you do not report a sale within the 30 day deadline, you may be sent a penalty as well as having to pay interest on any amounts that are due to HMRC.

If you are thinking of selling a property in the future or you have completed in the last 30 days then please contact our team with any queries that you may have and we will be happy to help. 

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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The scheme was announced to help both small and medium sized business recover from the negative financia

There is no doubt that 2020 is proving to be massively different to any of the predictions given by tax advisers at the start of the year. After three years of wall to wall Brexit coverage, a worldwide pandemic has changed the business landscape beyond recognition and there is the inevitable speculation amongst business leaders that there will need to be an increase in taxes… but what will this look like? 

In July, Chancellor Rishi Sunak commissioned the independent Office of Tax Simplification to review how Capital Gains is paid by individuals and smaller businesses. This has naturally led to a nervousness around whether this will lead to a Capital Gains Tax increase. Of course, this is purely speculation and every year around the presentation of the annual tax budget, rumours of tax changes are rife, many of which never materialise.

Other areas which might see changes are the various reliefs available for selling our main residences, our businesses and certain other assets, such as vintage cars, which at the moment are exempt.

We should not forget that there have already been some changes in April 2020 to Capital Gains Tax on residential properties, with the key change being that tax is now due to be reported and paid within 30 days of the completion date. In the grip of the pandemic, the Government did announce a relaxation to this rule with penalties only being charged for completions after 31st July 2020.

What should the public do to prepare?  

Firstly, there is no doubt that the Government will be watching the economy very carefully before making changes to taxes. It is important not to take action based on speculation or rush into a decision without all of the facts. 

Our advice is that people should take the opportunity to review their affairs and seek professional help if needed. 

How can we help?

We have dedicated Personal & Corporate Tax departments, who offer a free no obligation meeting.  In our initial meeting we learn about your plans for the future and identify areas in which we can help you to meet your short and long-term financial goals.  

If you would like to arrange a meeting, please contact us on our details below. 

 (E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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Stamp Duty

The Chancellor announced that he will enforce temporary reductions in residential property Stamp Duty Land Tax Rates (SDLT) between 8th July 2020 – 31st March 2021, which is of great benefit to those currently looking to get onto the property ladder or purchase a new property. You will only pay SDLT on the amount that you pay for the property above £500,000. This rate applies to both first time buyers and existing homeowners. The temporary SDLT rates are:

                                             Property or lease premium or transfer valueSDLT Rate
Up to £500,000Zero
The next £425,000 (Costing £500,001 to £925,000)5%
The next £575,000 (Costing £925,001 to £1.5 million)10%
The remaining amount (Costing above £1.5 million)12%


The existing rules for first time buyers are temporarily replaced by the reduced rates shown above. 

If purchasing an additional property, there is a 3% higher rate, which applies on top of the above rates. For example, on a buy-to-let or second home, the temporary rates become:

Property or lease premium or transfer valueSDLT Rate
Up to £500,0003%
The next £425,000 (Costing £500,001 to £925,000)8%
The next £575,000 (Costing £925,001 to £1.5 million)13%
The remaining amount (Costing above £1.5 million)15%


Businesses buying residential property worth less than £500,000 will also benefit from these changes at the additional 3% SDLT rate.

As of the 1st April 2021, the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.

For further details on the SDLT temporary changes click here:

https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates

Green Homes Grant

The Government has set aside £2 billion for homeowners in England to make green home upgrades. Homeowners in England will be able to apply for vouchers from the  The Green Homes Grant scheme, to pay for improvements such as loft, wall and floor insulation. This could save some households hundreds of pounds a year on their energy bills and create thousands of jobs for tradespeople. This is aimed to help to boost home efficiencies.

The Government has not yet announced a timescale for this scheme. 

(E) enquiries@advaloremgroup.uk  (T) 01908 219100

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George Bruce – Senior Business Development Manager

Since lockdown, those working from home have found themselves saving money on daily expenses such as travel, lunches and the daily coffee purchasing. However, these costs may have been reattributed to other outgoings that align with working from home, such as business telephone calls or electricity and heating bills.

If you have been forced to work from home (not if you’ve chosen to work from home), then you may be able to claim tax relief on some of the bills you have had to pay, due to working from home on a regular basis. 

How much can I claim?

HMRC have put in place a ‘blanket’ costing approach in order to pay everyone as quickly and efficiently as possible, rather than working out exact electricity bill costs vs usage. 

HMRC now allows you to claim up to £6 per week of expenses without having to provide bills or paperwork as evidence. This doesn’t directly mean you save £6 a week but instead you save the tax you would have paid on it. From 6th April 2020, this works out to be £1.20 a week for a basic rate taxpayer, or £2.40 a week for a higher rate taxpayer. 

In order to make a claim you must have had to work from home (haven’t chosen to do so) and incurred extra costs due to working from home. It is also possible to claim more than £6 per week, but you have to provide paperwork to support your claim. 

If your employer does choose to provide a ‘working from home allowance’, that would be tax free up to £6 per week, which means you can’t make an additional claim for tax relief on top. 

How can I claim?

If you normally complete a Self-Assessment tax return, you can include your claim details on there. If you do not complete a Self-Assessment, you can claim by completing a P87 form, either online or by post. 

These allowances have been available for years, but awareness has grown since the pandemic forced many offices to close.

For further details, please see the Government Guidance on Employees Working at Home 

(E) enquiries@advaloremgroup.uk  (T) 01908 219100