Cap on payable R&D tax credit

A cap on the amount of the payable research and development (R&D) tax credits for small and medium-sized enterprises (SMEs) comes into force for accounting periods beginning on or after 1 April 2021. The cap limits the amount of payable R&D tax credit that an SME can claim to £20,000 plus 300% of its total PAYE and national insurance contributions liability for the period. The cap does not apply to those companies who: • Have employees creating, preparing to create or managing intellectual property; and • Do not spend…

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A tax changes come into force from the start of April 2021, Off payroll working (IR35) – Employment taxes

The off-payroll working (OPW) rules finally come into force for the private sector on 6 April 2021.The rules aim to ensure that PAYE is accounted for where a contractor would have been an employee of the client, but for the fact that the client has a contract with the contractor’s personal service company rather than the contractor personally.With OPW being introduced, many more contractors may be encouraged to operate via an umbrella company.

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Pre-verification checks for new SEISS claims

The fourth SEISS grant will be open to some taxpayers who became newly self-employed in 2019/20. To protect the scheme from fraud, HMRC is writing to up to 100,000 of these taxpayers, asking them to complete pre-verification checks.HMRC is asking some of those who started self-employment in 2019/20 and who wish to claim the fourth and fifth self-employment income support (SEISS) grants to complete pre-verification checks to confirm their identity and provide evidence of trade.Taxpayers will receive a letter between 8 March and mid-April 2021, notifying them that they will receive a phone…

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