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Since the start of the COVID-19 pandemic, the UK government has been supporting small businesses through various loan schemes. Hundreds of billions of pounds were invested into economic support packages to keep employers and their employees afloat during a difficult time for many.

Unfortunately, a small percentage of fraudsters managed to claim some of this money under false pretences, effectively stealing billions of taxpayers’ money. In response, the government formed the Taxpayer Protection Taskforce (TPT) in 2021, which will continue investigating until 2023.

So, what exactly is the TPT doing to tackle COVID-19 fraudsters, and what does this mean for your business if you claimed COVID-19 relief during the pandemic?

Previously called Entrepreneurs’ Relief, the type of CGT (Capital Gains Tax) relief now known as BADR (Business Asset Disposal Relief) is only available for trading companies and groups that carry out primarily trading activities.

Gains from the disposal of company shares may be eligible for a reduced CGT rate of 10%, but only if the activities of the trading company ‘do not include, to a substantial extent, activities other than trading’ – but what qualifies as ‘substantial’?

Those concerned about qualifying for Business Asset Disposal Relief and claiming CGT reductions will be interested to know that the definition of ‘substantial non-trading’ has recently changed.

As businesses continue to recover from the pandemic, the UK government has launched the Help to Grow: Digital scheme. This initiative supports small to medium-sized enterprises (SMEs) to digitalise their businesses, providing impartial advice and discounts on accounting and customer relationship management (CRM) software from approved providers.

Starting from January 2022, eligible businesses can apply for Help to Grow: Digital and its partner scheme Help to Grow: Management. Lack of knowledge and expense are some of the biggest barriers preventing businesses from growing through digitalisation, but these schemes should be a game-changer in accessibility and productivity.

We all know that documenting and filing taxes is a complex and often stressful process. Despite our best efforts, some of us may miss deadlines or misrepresent information on our tax returns – leading to HMRC issuing a tax penalty. Whether you’re self-employed or part of a small business, nobody wants the additional stress of paying tax penalties on top of the actual tax and interest.

However, if you can prove that you had a ‘reasonable excuse’ for the action that incurred the tax penalty, then HMRC might agree to amend or waive the fine. You’ll still have to pay any outstanding tax and interest, but a successful tax penalty appeal will reduce the penalty or remove it altogether.

So, what counts as a ‘reasonable excuse’ for late or incorrect tax returns, according to HMRC? How much will you have to pay if you get a tax penalty, and what can you do to avoid getting one?

HMRC is reminding businesses with turnover below the £85,000 threshold of the steps they need to take regarding changed to Making Tax Digital (MTD) for VAT from 1st April 2022. Up to this point, only VAT registered businesses with turnover above £85,000 had to file returns through MTD.

For VAT return periods starting on or after 1st April 2022, VAT registered businesses need to keep digital records and file returns through approved software. Currently MTD is compulsory for business with annual turnover above the VAT registration threshold of £85,000, but the forthcoming change brings all VAT registered businesses into the MTD regime.

Many small business owners like to keep things in the family, because working with family can be comfortable and fun. After all, you’re more likely to trust a family member than a stranger.

Another benefit of adding a family member to your payroll is the potential to reduce business taxes. Paying a salary to any employee – regardless of their relation to you – is a deductible expense.

This means that turning a family member into a salaried employee could help to reduce your declarable profits, and therefore the amount of tax due on your business income.

There are no rules against hiring family members to work for your privately owned business, but it’s important to pay attention to employment laws and taxes that still apply.

Let’s look into the tax implications of employing a family member and what your legal duties would be as their employer, so you don’t accidentally break the law.