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Hopefully, this year staff Christmas parties can go ahead and thoughts turn once again to gifts for staff.

Whether you are a partner in a GP practice, a consultant with a limited company, or practicing as sole practitioner or indeed as a partnership, so long as you have employees, which may include yourself, say, a director of a limited company or family member, then carrying on reading what benefits are available.

Social Functions & Parties

The Revenue allow social functions and parties that cost £150 or less per person. The cost is tax deductible for you as the employer and not taxable on your staff.

To be eligible it must be available to all staff and be an annual event like Christmas or summer barbecue.

It need not all be spent at once and can be spread to other functions and if for some reason Covid hits Christmas again it can apply to online or virtual parties.

More details can be found here.

Trivial Benefits

In addition to the above, a tax deduction is allowed for gifts given to your staff, provided they cost £50 or less to provide, are not a reward for their work performance and are not included in any contract. These gifts are not taxable upon your staff. Gifts could include non-cash vouchers that can be used for a turkey or a Christmas hamper and even alcohol. Normally, the Revenue restrict tax relief on alcoholic products for businesses.

Major online platforms provide gift vouchers.

Multiple vouchers can be given to an employee in a year with the only restriction being directors of ‘close’ companies being limited to £300 in any year.

A ‘close’ company would include the majority of practitioners with limited companies.

More details can be found here.

The partners, associates and all staff at Sandison Easson & Co hope that the above will bring some festive cheer and should you have any questions please feel free to get in touch.

The Budget announcements were FAB in the sense that the Fizz of champagne would be taxed less, Airport passenger duty for domestic flights would be reduced and the tax on Banks effectively cut compared to other businesses.

Other main beneficiaries from the Budget were the NHS getting an additional £5.9 billion and individuals on income support by way of the universal credit taper.

Most of changes that will affect you next year and beyond had already been announced previously by way of additional 1.25% national insurance and dividend tax to take effect from April 2022 and the corporation tax rates increasing from 19% to 25% for investment companies from April 2023 and trading companies rate of corporation tax increasing from 19% to 25% in a step wise fashion as profits progress from £50,000 and under to £250,000 and over.

Thankfully, entrepreneurial relief for disposal of business assets and winding up of companies remains unaltered as do the rates of capital gains tax and inheritance tax.

In the run up to Christmas, thoughts will be diverted to obtaining presents that may be difficult to source what with lorry driver shortages and issues of containers ships unable to offload goods. Once the present list has all hopefully ticked off then some attention can be addressed to tax planning.

There are still plenty of tax planning opportunities ranging from:

  1. Electric vehicles and limited companies whereby there are tax advantages
  2. Setting up PAYE scheme for spouse and children who already undertake work for you. You never know furlough may be reintroduced but separate from that there are benefits from increasing State Pension entitlements and other benefits from such schemes
  3. Extracting dividends before the additional 1.25% additional tax kicks in next year
  4. New equipment may be entitled to super accelerated capital allowances of 130%
  5. If not already done so, you may look at incorporation of your private practice
  6. For those of you with limited companies, check if you have alphabet shares

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Boris Johnson made his announcement yesterday of the additional National Insurance levy to be paid to help the NHS and fund Social Care and in addition added 1.25% to the rate of dividend tax payable.

Leaks from Whitehall centred around the intended increase in National Insurance that will take effect from April 2022 and how it broke the Government manifesto promise of no tax nor national insurance increases during the term of this Government.

The exact details of how the increment will be applied between employers, employees and self-employed is yet to be published.

What was below the radar was the intended increase in the rate of dividend tax, again from April 2022. The previous 7.5% for basic rate tax payers will increase to 8.75% , with higher rate increasing from 32.5% to 33.75% and upper rate increasing from 38.1% to 39.35%.

Hopefully, the additional monies generated will alleviate the backlog of consultations and operations and go a long way to improving your working environment. Similarly, for social care any additional money is badly needed.

Although much was publicised about breaking the manifesto promise everyone was acutely aware that money was needed to be found to help the NHS and Social Care to recover from the pandemic.

On 27 October 2021 Rishi Sunak will give his half yearly budget update and no doubt further leaks will surface prior to any announcement.

The main contents of the Budget, like most ministerial announcements these days, were leaked well in advance of yesterday’s announcement by the Chancellor, Rishi Sunak. He continues with his well-publicised aim to keep to the government manifesto promises and set the UK back on track to reduce its indebtedness arising from the pandemic.

Below is a summary of the main points that we understand will impact you.

The Coronavirus Job Retention Scheme - Extended

The Furlough Scheme has been extended until 30 September 2021 and the level of grant available to employers under the scheme will remain the same until 30 June 2021.

From July 2021, the Government contribution will reduce to 70% dropping down to 60% in August 2021.

To be eligible for the grant employers must continue to pay their furloughed employees at least 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

Income Tax Thresholds

The personal allowance will increase to £12,570 and remain frozen at this level through to the end of 2026. The basic rate tax threshold will increase to £37,700 and will also remain frozen at this level through to 2026.

Different rates and allowances apply to Scotland and can be found here

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