Are you ready for the changes?

Our accountants are already getting ahead of the curve with our real-time compliant software.

Is your software agile enough to roll with the punches?

We’ll help you keep moving with the changes by giving you the tools and software you need to comply now and in the future.

Book a demo with us today to protect and future-proof your practice now.

The new tax year starts today 6 April 2021, with it comes major changes. Here are the key changes you need to know.

VAT rates will not change, exemptions however apply to coronavirus relief measures. The VAT threshold will not change from £85,000 it’s currently set at. This will remain until April 1 2024 government says.

Minimum wage amounts, personal tax, and National Insurance allowances have increased for 2021. A recent addition to the 2021/22 tax year is National Living Wage is now extended to 23 and 24-year-olds for the first time, having previously been limited to those aged and older.

There are process changes in how medium and large businesses are to handle the tax affairs of contractors who work for them. As of April 6, 2021, medium and large businesses must determine if the IR35 applies to contractors they hire. If so they are required to pay a Deemed Employment Payment.

Brexit legislation doesn’t directly impact any other kind of business tax.

The hospitality sector VAT rate which was reduced to 5% in July 2020 has been extended to 30 September 2021. Subsequently, a new 12.5% rate will be applied until 31 March 2022. The 20% rate will resume from 1 April 2022. Flat rate VAT users in the hospitality sector also benefit further from these changes.

Catering services: 4.5% until 30 September 2021, and 8.5% following this until 31 March 2022.

Hotel and accommodation: 0% until 30 September 2021, and 5.5% following this until 31 March 2022.

Pubs: 1% until 30 September 2021m and 4% following this until 31 March 2022.

There’s no increase in corporation tax for the 2021/2022 tax year, this also applies to the 2022/23 tax year.

There are major changes in April 2023, when corporation tax rises to 25% on profits over what will then be referred to as an Upper Profits Threshold of £250,000.

Personal tax allowance will increase from 2021/22, however it will be frozen the year after.

To find out more how Capium can support your practice in with all the new tax year changes, book a free demo today and speak to our product specialist today.

The post What’s Changing in the New Tax Year 2021? appeared first on capium.

How does postponed VAT Accounting work?

If you import goods from anywhere outside GB (or possibly the UK depending on the final rules) after the end of the transition period, and those goods are for use in your business, you can use postponed VAT accounting to avoid the requirement to pay import VAT immediately upon the goods entering the UK (e.g. at the port of entry).

Postponed VAT Accounting & HMRC

In order to complete your VAT return for the accounting period which covers the date you imported the goods. You’ll need details of the imports to be included in the return. This will include:

• Any customs entries you have made in your own records
• Copies of your monthly postponed import VAT statement, when available.

Postponed Accounting for Import VAT made easy with Capium

To help you keep moving with the changes we have developed Postponed VAT Accounting in Capium. We’ll help you ensure your compliant in real-time while recovering VAT on goods imported to the UK quicker. Postponed VAT is live now and can be accessed by all our clients.

Staying up to date with the changes 

We know 2020 was riddled with changes, but we’re here to keep you up to speed with all the  developments. If you’re interested to find out how Capium can support you now book a free demo with our product specialist. If you’re interested to find out more of our services book a phone consultation today. Our support team is on hand to help you, if you have any further questions.

The post What is Postponed VAT Accounting? appeared first on capium.

As the problems of 2020 finally begin to dissipate, what can smart accountancy firms do to thrive in what looks set to be a similarly turbulent 2021?

First, let’s treat ourselves to wallowing in the good news for a moment: on 8 December, 91-year-old Margaret Keenan from Coventry became the first person in the world to receive the Pfizer COVID-19 vaccine after it was accepted by UK authorities.

There’s a long way to go yet but, finally, after months of disruption, anxiety and uncertainty, we can see a glimpse of the path out of this mess.

Professor Tim Spector, the public face of the COVID symptom study which has done so much to inform and reassure during 2020, said in a webinar on 11 December that…

“The acute problem, I think, will be over by April…. I am optimistic that if we can just get our mental state together until Easter, we can hang on in there, it’s going to get a lot more pleasant after that – we can start to relax a bit..”

Apart from the relief this brings to us all personally, for business, it means plans for 2021 can start to come together – even if they’re tempered with caution.

And let’s face it, there’s still plenty to be cautious about.

Brexit, long COVID and the economy

The first and biggest concern for many businesses will be the end of the Brexit transition period on 1 January 2021.

At the time of writing, the Prime Minister is personally negotiating with EU leaders in the hope of avoiding a no-deal scenario. While a no-deal Brexit may well cause turbulence, it’s the fact that so little is certain so close to the wire that’s most concerning.

Accountants have spent the past nine months answering questions from clients frantically trying to counteract the effects of COVID-19. They’ll now have to deal with similar queries about Brexit, with similarly scant guidance from the Government.

Our advice here, as always, is to make smart use of automated client communications to provide updates as soon as you have them, before clients feel the need to pick up the phone.

Then there’s the fact that COVID-19 won’t exactly be over in 2021. Some have reported symptoms lasting for months in a phenomenon known as ‘long COVID’. That might also be said to describe the social, cultural and economic trajectory we’re on.

Even if, as Professor Spector says, things are loosening up by Easter, we can expect continuing outbreaks, lingering restrictions and ongoing challenges for business.

In his recent spending review update, the Chancellor made it very clear that the UK faces significant economic challenges as a result of the spending necessary to tackle COVID-19.

His Budget speech in the spring is likely to start the process of clawing that money back with talk of increases in capital gains tax, one-off wealth taxes, adjustments to inheritance tax and more.

Whatever happens, we’ll be standing by to ensure Capium’s award-winning practice management software reflects any tax changes as soon as possible.

Where are the opportunities?

With increasing stability, potential new clients who have been reluctant to commit because of uncertainty may now be in a position to sign on the dotted line. Fire up your CRM and circle back to talk to all those prospects who pushed back earlier in the year.

While certain industries are wobbling and under threat, others have had a good year, at least in commercial terms.

Look at your client base and ask some tough questions – is it time to pivot away from, say, hospitality and into ecommerce, for example?

And if there are efficiencies to be made, by downsizing, automating or outsourcing, now’s the time to find them.

Whatever you do, don’t dither – act now and get ahead of the pack.

Give your accountancy practice the edge with the automation and efficiency made possible with Capium practice management software. Book your free demo today

The post Vaccines and historic debt: the threats and opportunities presented by 2021 appeared first on capium.

First, on 1 January, the Brexit transition period will end and the UK will leave the EU – formally and finally.

Amid the ongoing confusion of COVID-19, it’s been all too easy to forget about this equally pressing issue for business. Now, many accountants find themselves scrambling to get the latest information from the Government and interpret it for anxious clients with less than a month to go.

And Christmas in the way.

And self-assessment not far behind.

Yes, that’s right: despite COVID-19 doing its level best to make every milestone and deadline meaningless, HMRC has stuck to its guns on self-assessment and still expects income tax returns before midnight on 31 January.

That’s why this year, more than most, it’s important to set a countdown timer ticking and get your clients taking this seriously. The sooner they get their financial information, the sooner you can get their returns done, so they – and HMRC – can focus on coping with Brexit.

With that in mind, here’s our five-point plan for making an unusual tax season as straightforward as it can be.

1. Communication is the key

You need to talk to your clients, remind them of the deadlines and keep nudging them as often as possible. Not all comms channels are created equal, though.

If you can, call them. Making that human connection, letting them hear your voice, and getting a verbal commitment is the best way to get them to act.

Failing that, texting is the next best thing – still personal, and more likely to cut through than email.

2. Get flexible with resources

Temporarily expand your team – and don’t just rely on agencies.

This year, unfortunately, LinkedIn is full of qualified accountants and bookkeepers looking for immediate work. Put out a message letting them know that you’re in need of short-term assistance. You’ll be helping them out, and yourself.

Also consider outsourcing, which has become much slicker and more accessible since the advent of easy video-conferencing and cloud accounting software.

3. Don’t wait, go electronic now

A little time invested now in setting up automation, online data capture and instructional content could free up days down the line.

For example, automated email and SMS reminders can keep clients on track without you having to lift a finger.

On-demand webinars and explainer videos are also a great way to save time, allowing clients to self-serve rather than you explaining the same things over and again.

4. Get collaborative

One of the biggest causes of delays in the tax return process is the back-and-forth between client and accountant.

You message them, they reply the next day, you reply the day after that… Before you know it, it’s taken a week to get a simple bit of information.

These days, it’s easier than ever to collaborate in real time, even if you’re miles apart. Make use of two-way, real-time document sharing and you can get things sorted and signed off in minutes.

5. Look after yourself

It’s easy to get into bunker mentality during tax season – early mornings, late nights and lost weekends.

We know it’s easier said than done but do try to take time out. Problems often solve themselves with a walk round the block or a few minutes of whatever activity you find meditative.

And remember, your clients’ lack of organisation isn’t, ultimately, your emergency.

Capium’s award-winning cloud practice software allows you to capture, connect and collaborate for less than £1.15 per client, per month. Can your software stack do that? Book your free demo today!

The post Two birds, one stone: tackling Brexit and self-assessment together appeared first on capium.