the advisor
Touch My Crystal Ball
T
HE NEXT IMPORTANT ITEM ON ANY accountant’s horizon is the forthcoming budget, due on October 27. Obviously, 2021 has been a year like no other. We have just come to the end of the pandemic furlough scheme; which means the redundancies are just about to start. Our industry has been crippled like its cousin, hospitality, by a lack of travel both internally and externally. Even though we are still waiting for overseas travel to bring our passengers in, internally operators have been hit by massive labour issues, both pandemic and Brexit-based. Many drivers were forced to give their vehicles back to their rental companies. Even worse, many owners had no choice but to hand back their keys to their vehicle financiers, and because cars and certain parts were not being made through the pandemic, we have massive waiting list for new ones and a price hike for second hand.
WHAT WE THINK WE KNOW
Taking that into consideration, there must still be money for the Covid health response and some specific business pandemic recovery help. We still need to know what recovery will actually look like for us. The Government has already said that it will be looking at strengthening public services, levelling the playing field (in opportunity) within Gary Jacobs the UK, promoting Britain globally and moving forward its ‘Plan for Growth.’ I await how the Gary Jacobs government will define this ‘plan’ post Brexit runs Eaziserv, an and in a pandemic recovery period. accountancy firm Thanks to some work by the hilariously named specialising in Office of Tax Simplification, there may well be the taxi and private changes to Inheritance Tax and Capital Gains hire business Tax. This has been a big win for HMRC: simple means easy wins for them without affecting the eaziserv.co.uk average tax payers’ bottom line. The other easy win, not universally popular, will probably be the freezing of personal tax HMRC IS SHARPENING ITS CLAWS allowances which normally rise (to our advantage) annually. To top it all HMRC is starting to think about how the self-emFinally, let’s see if the government can keep its promise on ployed are going justify their self-employed grants, if by good freezing fuel duty for the 11th year running. I suspect that in grace they managed to earn nearly the same as the last year in the mind of the chancellor, it may be time for it to rise. a last minute ‘back to work’ frenzy. And they will be asking for A BIT OF WHAT WE WISH FOR their grants back if they don’t think you deserved it. (More on u FOR OPERATORS: Maybe some help for medium-sized that next month, or ask an accountant). It is with this in mind we wonder whether the govt will put a businesses (turnover of more than £1m) with cash-flow sticking plaster and some cooling ointment on our pains or just problems by increasing the ceiling for the VAT cash accounting rip the scab off and pick the wound, in this ‘technical budget.’ To system, which allows you to pay VAT only when your client pays be fair, Making Tax Digital, the massive new HMRC digitisation your bill. A simplification of the now ridiculously complicated process and all of its prospective headaches, has been pushed EU VAT laws post-Brexit. The ability to easily reclaim overseas back again to 2024, allowing all of us accountants and normal sales tax which is also (post-Brexit) unclear and in need of people alike, a little breathing space. work by HMRC. u FOR EVERYONE: The hospitality industry benefitted from THE PROFESSIONALS’ VIEW a reduced VAT rate of 5%, so shouldn’t passenger transport get So here are some thoughts both from myself and other a little of that help? Many fleets are significantly reduced, and accountancy pundits on what might be in store for us, or for that the big tech apps get the offshore VAT breaks, so let’s even the matter what we think should be in the budget. playing field a little, even just during our recovery. WHAT WE KNOW CONCLUSION Well, we know since Chancellor Sunak has already launched To be fair, our government has a tough call between refilling a spending review pre-budget, there will be tightening of the their coffers to continue their plans and helping us recover purse strings. I think we all knew that. Also, climate change will from the financial horrors of the past 18 months. Let’s almost definitely be on the menu. UN Conference of the Parties just hope they will remember the (COP26) is in Glasgow at the end of importance of this country’s passenger October. National Insurance is definitely transportation industry. increasing by 1.25% to cover health and social care. There will be some n Gary Jacobs is a director of unexpected state pension halts and Eazitax an industry specialist there must be some tax increases to try accountancy service. If you have and reduce the £2.6 billion tax gap, and any problems with the current the further effects on the government’s issues discussed Gary can be pandemic spending, such as the soon to contacted at Eazitax.co.uk or via finish furlough scheme. LinkedIn.
“To be fair, Making Tax Digital... has been pushed back again to 2024, allowing all of us accountants... a little breathing space...”
OCTOBER 2021
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