TAX UPDATES - OCTOBER 2021

CAPITAL GAINS TAX:

Since April 2020 UK residents have been required to calculate, report, and pay any capital gains tax liabilities on disposal of UK residential property within 30 days of completion.

As from the 27th of October 2021 the reporting and payment window for landlords, second homeowners who are disposing of properties will have a 60 day period to calculate, report and pay any capital gains liability arising on disposal of relevant properties.

PAYROLL:

The national minimum wage increases from 01st April 2022 to £9.50 for 23-year-old and over.

The lowest threshold for under 18 is £4.81

ALLOWANCES and TAX RATES:

Basic rate allowance will remain the same in April 2022 - £12,570

Basic rate limit is £37,700

Basic rate - £12,571 - £50,270 taxed at 20%

The higher rate threshold will be from £50,271 – £150,000 taxed at 40%

Additional rate threshold will be from £150,001 – taxed at 45%

CONSTRUCTION INDUSTRY SCHEME:

Domestic Reverse Charge VAT:

Subcontractors and Contractors can continue to charge VAT at standard rate if they are the end users. End users are consumers and final customers.

If subcontractors are not the final users, then Domestic reverse charge applies. No VAT is charged, but the invoice shows that the reverse charge applies, and a note is made on the invoice that the end user will pay the VAT over to HMRC.