June Questions and Answers

Newsletter issue - June 2021

Q. I've been going over some old tax returns to try to track down some capital losses. However, whilst doing this I've noticed that I missed including my considerable pension contributions off the 2018/19 return. From what I can see online, I've just missed the deadline to amend it. Is there any way to claim the extra relief? It's worth around £2,000 which would be very helpful at the moment.

A: You should make a claim under the provisions for Overpayment Relief. This permits a claim to be made up to four years after the end of the tax year in question where there are no other means to recover the overpaid tax. You need to be very careful when drafting the claim, as it must contain specified information (see HMRC's guidance here). It must also be signed by you personally an advisor can't sign it on your behalf (though they could help you draft the letter).

Q. We make a relatively high number of B2C sales to EU-based customers - usually over the summer months. We also use the flat rate scheme, and I've heard that Brexit may cause issues for us. Is that the case and if so can we leave the scheme for the summer months?

A: Yes - the problem arises because all sales to EU customers are now zero rated, so you aren't collecting input tax. However, you still have to apply the flat rate percentage to these sales. If a lot of your sales are zero rated, it will probably make sense to leave the scheme. You can do this at any time, just make sure you inform HMRC of your chosen leaving date. However, once you leave you cannot rejoin for at least 12 months, so you can't just leave for a few months then come back to it after the summer.

Q. Following the Covid-19 pandemic, I've decided to change my year end to 31 March (from 31 December) in order to utilise overlap relief that I've been carrying forward. However, I'm not sure exactly what profits to include on my return.

A: This will depend on exactly how you enact the change. If you prepare accounts for the 15 months to 31 March 2021, your return for 2020/21 will include the results for the full 15 months, less the overlap relief. If you prepare accounts for the three months to 31 March 2021, you will have two accounting periods (one 12 months and one three months) in the basis period for 2020/21 and you will include the results from both, again deducting the overlap relief. Of course, it's possible that you are referring to your current year, i.e. you will prepare accounts to 31 March 2022. In that case, the change won't take place until the 2021/22 year and you should just report your results to 31 December 2020 on the 2020/21 return in the usual way.

What our clients say about us...

  • "Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."


  • "I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."

    Neil Price - Managing Director at Work Relief Charity Recruitment

  • "Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"

    Lee Westrap MBCS - Director - Bulldog IT Services

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Booth & Co  |   The Hermitage  |   15a Shenfield Road  |   Brentwood  |   Essex  |   CM15 8AG        Telephone: 01277 224666    |   Email: info@boothandco.co.uk