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A breakdown of what small businesses need to know as we enter the 2021/22 tax year.
Last updated: 30 Mar 2021 2 min read
A new tax year is just around the corner and with it come some changes in legislation that may affect your small business. Accounting software provider FreeAgent has summarised a few key updates in advance of the new tax year starting on 6 April.
New legislation was introduced for VAT-registered contractors and subcontractors in the construction industry on 1 March 2021. VAT-registered contractors are now required to apply the domestic VAT reverse charge on qualifying services supplied by VAT-registered subcontractors.
Until 5 April 2021, freelancers working with clients in the private sector can decide whether their projects fall within IR35. However, this will change in the new tax year, when clients that are medium-sized or large businesses will have to decide. Clients must notify the freelancer of their decision and if the project falls within IR35, the business must collect tax and national insurance from the freelancer.
The following changes will come into effect in April 2021.
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