1 October tax changes
Watershed. 30 September 2021 marked an end for businesses being able to claim for staff on furlough. However, the date is also crucial for your clients for other reasons.
Property. Firstly, the extended stamp duty land tax (SDLT) holiday for transactions in England and NI came to an end. The 0% band was temporarily set at £250,000, but now reverts to the standard £125,000. Relief is available for first-time buyers (see Follow up ).
VAT. The VAT rate for the hospitality industry has also increased. In July 2020 the government slashed the applicable rate from 20% to 5%. From 1 October 2021 the rate increases to 12.5%.
Pro advice. This is a completely new VAT rate, so ensure clients are capable of processing transactions correctly, e.g. by reprogramming tills etc.
FRS. Certain flat rate scheme (FRS) percentages were also cut in July 2020. From 1 October 2021 these have increased - though not to their pre-pandemic levels. The affected categories are as follows (previous rates shown in brackets):
- hotels and other accommodation businesses - 5.5% (0%)
- pubs - 4% (1%)
- catering businesses - 8.5% (4.5%).
Pro advice. Warn clients that a further increase is scheduled for 1 April 2022 when the rates will return to their pre-pandemic levels of 10.5%, 6.5% and 12.5% respectively.
Pro advice. Where your clients do not submit VAT returns for calendar quarters there will be two FRS rates to deal with for periods ending in October or November.
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