Debate over how to improve MAPs and APAs will bring changes this year
Finance Minister Nirmala Sitharaman announced that companies will no longer be required to pay for an external audit of their annual goods and services tax (GST) return or to obtain a reconciliation statement to satisfy the rules under the GST regime.
However, tax professionals are divided as to whether the change to self-certification introduces more risks for in-house tax departments that could lead to litigation.
“This is a double-edged sword,” said a tax director at a leading pharmaceutical company.
At the same time, African governments are looking for ways to increase tax revenue. Botswana’s annual budget was also presented to Parliament on February 1. Minister of Finance and Development Thapelo Matsheka announced a two percentage point rise in the VAT rate from 12% to 14%, as well as a number of other rate rises on withholding tax and fuel levies.
HM Treasury in the United Kingdom released its
sixth direction concerning the Coronavirus Job Retention Scheme on 26 January 2021. Many of the central features of the furlough scheme have not changed, including the level of the government’s contribution to employees’ wages. However, certain dates have been amended and the direction addresses issues that employees on variable pay would have faced under the scheme had the latest changes not been made. Employers will also be interested to know that HM Revenue & Customs has started to publish details of companies that have made claims through the scheme since December 2020.
WHAT IS DIFFERENT?
Chart of the week: Japan Budget 2021-22 5 February 2021: This week s chart focuses on the Japanese economy as it seeks to return to relative fiscal normality in the year commencing 1 April 2021, following multiple supplementary budgets in its current financial year. The #icaewchartoftheweek is full of anticipation for the UK Budget next month and so decided to take a look at how the Japanese central government plans to borrow ¥28.9tn (£205bn) in the year to 31 March 2022. Together with taxes and other income of ¥63.0tn (£450bn), this will be used to fund ¥86.9tn (£620bn) of spending and a ¥5.0tn (£35bn) COVID-19 contingency.
This follows a significant amount of borrowing in the current financial year, with the 2020-21 Budget amended by three supplementary Budgets in response to the coronavirus pandemic. If temporary and special measures are excluded, the 2021-22 Budget reflects a 0.7% increase in spending over the previous year’s ¥86.3tn (
Tax consultant Deloitte has put together examples spanning different salaries. What are the proposed rates? Expected number and proportion of Scottish taxpayers by marginal rate, 2021-22 The lower earner
£15,000 salary If you earn a salary of £15,000 in 2021-22, and have no other income, the personal allowance of £12,570 (assuming this is increased in line with the Consumer Prices Index, as planned) will be deducted and £2,430 will be taxable. If you are resident in Scotland, your income tax calculation will be as follows; Scottish starter rate - £2,097 at 19%= £398.43 Scottish basic rate - £333 at 20% = £66.60 Total tax = £ 465.03 This is a decrease of £14.12 compared to 2020-21 due to the expected increase in the personal allowance from £12,500 to £12,570 and the small increase in the starter band from £2,085 to £2,097.