Welcome to the June edition of the Leon & Company column, where we offer a timely reminder to consider submitting your P11D forms and throw in a top tax tip to boot!
Benefits in kind
We’ve reached that time of year again where business owners let HMRC know about any benefits-in-kind (also known as perks) enjoyed by either themselves as a director of a limited company and/or their staff during the tax year 6th April 2020 to 5th April 2021. Benefits may include (but are not limited to) a company car (although the benefit on full electric cars is 0% in 2020/21 – a whole separate tax planning opportunity as previously reported), private medical insurance, and sums of cash borrowed from the company of over £10,000.
Where such benefits need reporting, then forms P11D and P11D(b) need completing, with any tax and NI paid accordingly. The deadline for submitting these forms is 6th July 2021; so if this applies, then get your skates on – but don’t forget to put these on the form if your company provides the skates for free!
Capital allowances ‘super-deduction’
Here’s a nice tax tip for companies: from 1st April 2021 to 31st March 2023, a ‘super deduction’ of 130% will be available to companies incurring expenditure on qualifying plant and machinery. This will generate a reduction in tax of 24.7p for every £1 pound spent. For example, if your business invests in a laptop for £1,000, it will be as if the company had spent £1,300 for tax purposes – thus creating additional tax relief of £57. So if you are thinking about investing in equipment, then there has rarely been a better time to do so!
Check out the June / July edition of JLife Leeds for more on finance, personal development and advice.