Baxter&Co - 2021 Spring Business Support Guide

4 Business-support fraud The Government is aware that there have been a significant number of fraudulent claims under the various support measures (e.g. employers claiming furlough grants for hours when employees are still working or traders claiming SEISS grants when their business has been unaffected by coronavirus). HMRC may soon be on to the culprits, as it has been allocated £100m for a ‘taxpayer protection taskforce’ of 1,265 HMRC staff to combat fraud within COVID-19 support packages. Early disclosure of such matters to HMRC can reducesignificantly, or even eliminate, any penalties that might otherwise arise. Are you up to date with the revised eligibility criteria for the various support schemes? Do you think you might need to disclose information to HMRC about a previous incorrect claim?We are here to help with these and any other matters, so that you can make the most of this Government support without running into unforeseen problems. Should you be VAT registered? HMRC actively looks for businesses that have an annual turnover of £85,000 or more, as most should be VAT- registered. It gathers information from many different sources, including credit card payments and sales by wholesalers, then analyses that data and compares it to turnover figures declared on tax returns. This data has allowed HMRC to find businesses that are not VAT-registered, but where the turnover indicates they should be. HMRC has been writing to those businesses, asking them to register for VAT or to say why they don’t think theyneed to be registered. If you receive one of these letters, you need to respond without delay, as HMRC will follow the letter up with further tax enquires. Please forward a copy of the letter to us as soon as possible, so we can advise you on the approach to take. HMRC’s information about your businessmay not be completely correct. If needed, we can help you complete the VAT registration form so that there areno omissions and no errors. Company cars - lots of changes! Take extra care when reporting companycars on Form P11D over coming weeks. For 2020/21, there were significant changes to the percentages that need to be applied to the list price of a car when calculating a benefit, namely: • Electric cars now have a zero benefit • The percentage for cars up to 50g/km of CO2 emissions now takes account of how far the car can travel in pure electric mode as well as the level of emissions; and • There are separate percentage tables for cars first registered up to 5 April 2020 and those firstregistered after that date For cars purchased from April 2021,there are important changes to the Capital Allowances that businesses can claim as a replacement for the depreciation in the accounts: • New electric cars – 100% of thecost is relieved in the year of purchase (NB this was previously available on a broader range of cars) • Cars above 50g/km (‘high emission’ cars) only attract very slow tax relief – previously this threshold was110g/km, so many more cars are now affected