COVID 19 – Latest Update 25 November

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Time is a precious commodity in business and is often a key driver for action. Arbitrary time deadlines imposed by governments create both threats and opportunities.
 
This year has been uniquely challenging in terms of having to take timely action: be it surviving lockdowns or preparing for Brexit. Businesses are finding timely ways to innovate and invest for future growth and resilience.
 
But here are four government deadlines of note that could influence business behaviour.
 
The first is the welcome extension of the £1m Annual Investment Allowance to 1 Jan 2022, providing companies with more time to weather the pandemic and invest for the future.

The second is a cap from 1 April 2021 on Research & Development (R&D) Tax credit claims. There will be exceptions to the cap, but companies will need to ensure evidence for claims is robust.
 
The third is a likely change in the Capital Gains Tax (CGT) regime to increase taxes on entrepreneurs as well as ordinary savers, as recently suggested by the Office for Tax Simplification. We do not yet know what suggestions the Chancellor will action or when they may occur, but he is looking to recoup the billions spent on shoring up the economy this year.
 
The threat of changes to CGT will affect how business owners behave and will influence Merger & Acquisition activity. There is still time for an exit, maximising current reliefs available. The change itself – whenever it happens – has the potential to damage entrepreneurial flair within the UK economy.
 
The fourth deadline of note has the potential to create real problems for employers who are using the latest version of the furlough scheme. There is growing alarm that claim periods for grants are reduced from 30 to just 14 days, making it difficult  for claims to be made within the time limit.
 
The much shorter deadline may be too tight where payments for a month are made in arrears in the following month once timesheets have been processed, or where payrolls straddle month ends. Pressure is being exerted on HMRC for the deadline to revert to 30 days.
 
This is a time when the government needs to be bringing forward big and bold initiatives to support our economy, showing timely agility and vision. Creating artificial constraints on business activity with arbitrary time limits and anti-business policies is counterintuitive at the best of times, let alone when in crisis management.
 
And as a timely reminder, we are here to support you with your business, so if you need help in maximising the opportunities, or if you are feeling cashflow or trading pressure, please get in touch, and also check out the Business after Covid-19 Transition Hub.

Check out our ever-evolving checklist of key dates and deadlines
An evolving checklist of Covid-related key dates and deadlines. This is updated as dates change or expire.

Furlough claim deadline creates potential for payroll pain
Employers face a shortened deadline for claims under version 3 of the furlough scheme, creating concerns that there will not be enough time to submit grant applications.

Notice is served? Then you cannot claim furlough grants
From 1 December 2020, the furlough scheme rules are changing to prevent the scheme being used for any employee that is being made redundant, is retiring or is working their notice.

How to protect your cash if the Chancellor swoops on Capital Gains Tax
A recent report commissioned by the Chancellor highlights ways that Capital Gains Tax could increase for both entrepreneurs and savers. But what can be done to offset the threat?

EMI share schemes secure after Brexit
Enterprise Management Incentive schemes will continue to be available after 31 December 2020, after the Brexit transition period ends.

Investment tax allowance extended for a year
In a move to help stimulate investment in UK manufacturing, the government is extending until 1 January 2022 the £1m Annual Investment Allowance.

Tax changes highlighted for finance bill 2021
Draft legislation has been published for Finance Bill 2021 covering R&D Tax Credits, the Construction Industry Scheme, and a new plastic packaging tax.

R&D tax relief to be capped from April next year
From 1 April 2021, Research & Development (R&D) Tax Credits will be capped, in a measure unveiled as part of next year’s Finance Bill.

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