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New tax year resolutions for individuals and smaller businesses

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As someone once almost said, the times they are a-challenging. Covid-19 presents additional challenges for the new tax year, in particular for those who have lost income but also for the relative minority who have benefited from increased income. Chris Williams summarises the big concerns. 

23rd Apr 2021
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Working from home? claim deductions

This is an opportunity for employers and employees alike. An employee who works from home can claim a tax deduction of £6 per week (£26 per month) for the costs of using their home as a workplace without having to keep records of specific expenditure.

Alternatively the employer can pay the homeworker the allowance tax and NIC-free.

Any payment in excess of the fixed allowance is taxable unless it reimburses specific expenses deductible under the normal rules for employment expenses wholly, exclusively and necessarily incurred in the course of employment (see our separate article on working from home).

Higher rate taxpayers may make the most of gift aid

Gift aid for donations to charity is more flexible than some think. Tax relief can be claimed in the year the donation is made or carried back to the preceding year to reduce that year’s liability and possibly produce a repayment.

Check PAYE codes

PAYE codes may contain adjustments for unpaid tax, deductions or other income, based on preceding years’ figures. The 2021/22 code may be incorrect if additional deductions will be due, or investment income has reduced or is likely to do so.

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Replies (2)

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By johnjenkins
26th Apr 2021 10:37

Chris, you sound like a great guy who I would love to have a pint (or4) with. So why have you written this article that really is something we would do automatically?

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By Mr J Andrews
26th Apr 2021 16:17

It must be remembered that the £150 ''Exemption'' is per attendee not necessarily just the employee attendance . So think spouses / partners too.
And seeking advice from HMRC before ''going ahead'' would no doubt guarantee a cancellation if the Revenue's response record is anything to go by.

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