What's new with Tax returns

As the tax year comes to a close, it's essential to stay updated on recent changes in tax regulations to ensure that you're filing your tax returns accurately. For those who fall outside of IR35, there have been some significant changes in recent times that are worth noting.

Firstly, it's worth noting that IR35 is a set of regulations that were introduced to tackle tax avoidance by those who work through an intermediary, such as a limited company or a personal service company. If you are outside of IR35, then you are not affected by these regulations, and your tax returns will be processed differently.

One of the most significant changes for those outside of IR35 is the increase in the Personal Allowance threshold. This means that you can earn up to £12,570 in the tax year 2021/22 before you need to pay any income tax. This threshold has increased by £70 from the previous year, giving you more flexibility when it comes to your earnings.

Another significant change is the increase in National Insurance Contributions (NICs). The Class 1 National Insurance rate has increased from 12% to 13.8%, while the Class 4 rate has gone up from 9% to 9.5%. This means that you'll need to factor in these changes when you're calculating your tax liability.

Furthermore, there have been changes to the way that expenses are handled for those outside of IR35. Before April 2021, you could claim expenses such as travel and subsistence costs against your taxable income. However, as of April 2021, this is no longer the case. Instead, you'll need to factor in these expenses when calculating your tax liability.

It's worth noting that there are still some expenses that you can claim against your taxable income, such as office rent, equipment, and insurance costs. However, it's essential to ensure that these expenses are legitimate and that you have the necessary documentation to support your claims.

In conclusion, staying up to date with recent tax changes is essential for anyone filing a tax return. For those outside of IR35, there have been some significant changes, including increases in the Personal Allowance threshold and National Insurance Contributions, as well as changes to the way expenses are handled. It's crucial to ensure that you're aware of these changes and that you're filing your tax returns accurately and on time. If you have any questions or need further advice, don't hesitate to contact Think Tax Return for guidance.