Start of new tax year ushers in raft of fiscal changes
The 6 April start of the new tax year sees important fiscal and business changes come into effect, including the introduction of the new coronavirus (COVID-19) Recovery Loan Scheme (RLS).
The RLS provides financial support to businesses affected by the COVID-19 pandemic. The scheme gives lenders a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The RLS is open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
The RLS is initially available through a handful of lenders accredited by the British Business Bank. More information can be found here.
The rules relating to off-payroll workers, commonly known as IR35, also change from 6 April. The new rules shift responsibility for making the decision on employment status on each contract away from contractors and personal service companies (PSCs) and on to the client receiving their services. This has already been done in the public sector.
From 6 April 2021, you are no longer responsible for deciding your employment status if you are working for a 'medium' or 'large' client in the private sector. It becomes the client's responsibility instead. The change also has consequences for tax and national insurance contributions (NICs).
Additionally, from 6 April a nil-rate of tax applies to zero-emission vans within the van benefit charge. In 2020/21 such vans have a van benefit charge at 80% of the standard flat rate of £3,490.
Finally, the personal allowance rises to £12,570 for the 2021/22 tax year. It has been frozen at this figure for the tax years 2022/23 to 2025/26.