Jobs

Social care tax proposed from April 2022

by Admin

The government announced yesterday plans to introduce new social care tax, intended to help reduce the costs incurred when a person goes into care. If the bill passes parliament, this will mean be an increase in National Insurance contributions of 1.25 percentage points from April 2022, to be replaced by a separate tax of the same amount from April 2023. The benefit of this additional tax, in England at least, is that care costs will be capped at £86,000 (less if you don’t have that much in savings / assets). Scotland, Wales and Northern Ireland set their own social care policies, but will receive additional revenue from the tax generated.

The plan has drawn criticism from many who see it is a tax paid by low- and middle-income employees to subsidise wealthy retirees. It also appears to be a break of a manifesto pledge not to raise income tax, National Insurance or VAT – the justification for which, put forward by the government, has been that the pandemic has changed things.

This BBC article has a clear summary of the changes in more detail, as well as a chart showing how much extra tax you’ll pay depending on how much you earn. The bill still needs to pass parliament, but when this and other changes from April 2022 are confirmed, The Salary Calculator will be updated with the latest rates so that you can see what a difference it will make to your take-home pay.

Tags: , , , , , , , ,

Wednesday, September 8th, 2021 Income Tax, National Insurance, Savings No Comments

None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

Pandemic-related changes to tax return schedules

by Admin

[Sponsored Post]

We appreciate that it’s difficult to stay on top of tax law at a time of such uncertainty. That’s why we’ve asked Mike Parkes from GoSimpleTax to break down the biggest support package of 2020, and how it could impact you in 2021.

Whilst the support from the government has been welcomed with open arms, by most, it is worth noting that these grants are taxable. Each grant should be reported on your tax return, as income, in the accounting period they were received. This means there may be tax and NIC due on these payments and therefore it may impact your tax liability due 31 January 2022.

The extension of the Self-Assessment filing deadline

Sole traders were also made exempt from a late filing penalty, provided that they filed online by 28th February 2021. However, this has proved somewhat confusing as self-employed individuals were still expected to pay their tax bill by 31st January.

Any individuals that failed to do so would be charged interest from 1st February on any late payments. This became even more costly if you delayed your payment on account from July 2020 (another COVID-19 response measure), as the two payments were both due on 31st January 2021 and each accrued interest.

Important change to be aware of

In a further curveball announced 19th February HMRC confirmed that the initial 5% late payment penalty on self-assessed tax would not be charged as long as the tax is paid, or a time to pay arrangement is agreed by 1st April 2021. The self-assessment timeline is now:

  • 31 January – Normal Self-Assessment deadline (paying and filing)
  • 1 February – interest accrues on any outstanding tax bills
  • 28 February – last date to file any late tax returns to avoid a late filing penalty
  • 1 April – last date to pay any outstanding tax or make a Time to Pay arrangement, to avoid a late payment surcharge
  • 1 April – last date to set up a self-serve Time to Pay arrangement online

If you’re unable to pay your tax bill in time, the government is advising you to pay in instalments. This enables you to spread the cost of your tax bill over a few months. Bear in mind that you must owe £30,000 or less and have no other payment plans or debts with HMRC. Your tax returns must be up to date, and you also have to sign up before 1st April 2021. It’s worth noting that you’ll have to pay interest too.

As there is currently no information concerning the rules for the fourth SEISS grant, we here at GoSimpleTax are urging all our users to submit their tax return immediately. After all, there’s a strong possibility that they could determine your eligibility, and you must do it in order to set up a payment plan.

About GoSimpleTax

GoSimpleTax software submits directly to HMRC and is the solution for self-employed, sole traders, freelancers and anyone with income outside of PAYE to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.

Try today for free – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.

Tags: , , , , , ,

Tuesday, February 23rd, 2021 Income Tax No Comments

Job Support Scheme

by Admin

As I mentioned in an earlier post, the Pro-Rata Calculator had the details of the Job Support Scheme added to it. This scheme was meant to come in to effect on 1st November but at the last minute it was put on hold and the Furlough scheme was extended. At the time, I left the Job Support Scheme on the calculator in case it might be useful for people to see what the effect of it might be in the future. However, it is uncertain whether this scheme (in its current form) will ever return – so I have removed it from the calculator in order not to add confusion. The Furlough calculator is still available.

Tags: , , , , , ,

Furlough extension

by Admin

In September I added the then-newly-announced Job Support Scheme to the calculator, and last month I updated it with the revised employer and government contribution levels – however, just before it was due to start on 1st November, the chancellor announced that the already-running furlough scheme would be extended, first until December and then until the end of March. This is in place of the proposed Job Support Scheme.

It is not yet clear whether the Job Support Scheme will return at the end of March, or if furlough will be extended further, or if some other scheme will be in place. With Covid-19, the future is even harder than usual to predict. For now, I will leave the Job Support Scheme details on the calculator, so you can see what the effects of it might be if it were to be reintroduced. You can of course continue to use the calculator as before to work out the impact of furlough. If it becomes clear that the Job Support Scheme will not be returning, or if it is too confusing for people, I will remove it from the site.

Tags: , , , , , ,

Updates to Job Support Scheme

by Admin

In light of the current situation with Covid-19, Chancellor Rishi Sunak has made a few changes to the Job Support Scheme, so the government is providing more support than they originally planned.

The minimum number of hours which have to be worked to qualify for the scheme has been reduced from 33% of normal hours to 20% of normal hours. The employer’s contribution has been reduced from 33% of the unworked hours to 5% of the unworked hours, and the government contribution has been increased to 62% of the unworked hours (from 33%). This more generous scheme makes a huge difference to small businesses who were worried they would be unable to meet the costs from 1st November. However, it does reduce the minimum amount an employee can be paid from 77% to 73% of their full salary (this is only the case if the number of hours worked is below 33%).

The Salary Calculator’s furlough calculator has been updated with these latest figures.

Tags: , , , , ,

Sponsored Links

Close X

This website uses cookies - for more information, please click here.