As we raised a glass, watched the fireworks and welcomed 2020 no one knew what we were in for this year. As we look forward to 2021 there is no way for us to predict what it might look like either. 2021 will have challenges of its own. But it will also have new, exciting opportunities. Here are the 5 things we think you need to be thinking about for 2021:
The deadline is fast approaching for the UK’s departure from the European Union. Whilst negotiations are ongoing, one thing is for sure deal or no deal, we will still see changes. If there is no deal, border checks and taxes will be introduced for goods travelling between the UK and the EU. Updates will be fired off in quick succession in 2021 as details get ironed out. Businesses need to do what they can to get ready now. Click here for more information about the transition.
The new norm
2020 has been the year of change… and fast change! Businesses had to learn to be flexible and “agility” became the new buzzword. Whilst 2021 may not see as many drastic changes, the need for flexibility remains. It seems remote working is now here to stay with many businesses getting rid of their offices.
There have been spikes in searches for tech solutions related to ecommerce, online payments, cash flow management, and inventory management. Investing in new technology can put you in a good position for the new year.
Businesses also need to remain agile. They will need to constantly review and tweak how they work. For instance offering delivery, setting up an online shop, accepting new payment methods, or setting up remote working.
Making Tax Digital 2.0
Currently only VAT registered businesses with a taxable turnover above the £85,000 threshold are required to adopt MTD. However, from April 2021, all VAT-registered traders, including small businesses, will have to implement compatible software to prepare themselves for their first VAT return starting on or after April 2022.
Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2023.
These deadlines may seem a way off but starting early and moving your finances online has many benefits.
IR35 roll out
Due to Coronavirus the changes to the off-payoll rules due to come into effect on 6 April 2020 were delayed until April 2021. Under the legislation, if a contractor is engaged through personal service companies (PSCs) and assessed as inside IR35, they will need to pay the same income tax and NICs as if they were employees. Small businesses are still exempt from these changes.
The new rules will apply irrespective of what type of intermediary the company engages through. More information about IR35 can be found here.
In November the PM set out his ambitious ten point plan for a green industrial revolution. Businesses will need to consider their long-term impact on the environment and society. Sustainability will be a big focus point in 2021. Boris Johnson, in an article for the Financial Times wrote:
“Now is the time to plan for a green recovery with high-skilled jobs that give people the satisfaction of knowing they are helping make the country cleaner, greener and more beautiful.”
We have survived 2020 and no matter what happens in 2021 we will be there, helping to guide you all the way. If there is anything you would like to discuss drop us an e-mail or give us a call on 01332 292022.