BREXIT VAT Changes from 1st January 2021

March 4, 2024

Brexit changes for business and where to find help

In just weeks the Brexit transition period ends. If you do business with EU countries there’s a stack of information you need to take on board. We’ve put together links to the official sites where you can find the latest information relevant to your situation.

VAT and exporting goods to the EU. Assuming no last-minute arrangements are agreed, the UK stops following EU rules on VAT from 1 January 2021. There will be two sets of VAT rules to contend with when exporting to the EU: those goods leaving the UK and those in the EU country where the goods will arrive. EU countries will treat goods coming from the UK as they do goods coming from non-EU countries currently. To find out about GB to EU exports and, for example, the position on VAT zero rating, visit https://www.gov.uk/prepare-to-export-from-great-britain-from-january-2021 .

Postponed VAT accounting (PVA). Currently you must pay VAT on goods you import when they enter the UK. HMRC will not release them before the VAT is paid. If you’re VAT registered you can then reclaim the VAT according to the usual rules. To prevent this delay in getting the VAT back you will be able to use PVA. This will allow you to declare the import VAT and reclaim it on the same VAT return. It won’t just apply to imports from the EU. From 1 January PVA can be used to account for VAT on goods imported from anywhere in the world. For more information, visit https://tinyurl.com/y3l2qk6a . For how you complete a VAT return with PVA, visit https://tinyurl.com/y2c45jzs .

VAT on imported goods value up to £135. With effect from 1 January “low value consignment relief” which applies to imported goods with a value of £15 or less will be abolished. Instead, VAT on imported goods valued at £135 or less must be accounted for when you sell them. For details of the changes, visit https://tinyurl.com/y4dzazuj .

Distance selling. Currently there are simplified rules for online and distance selling where your customer is in the EU. This is where you sell goods or services via digital, mail order, phone or text message. From 1 January 2021 you may need to register for VAT in the EU countries to which you distance sell. For information about the change, visit https://tinyurl.com/yxb5obmf .

EU VAT registrations. There aren’t just UK rules to think about from 1 January 2021. You have to consider EU rules too. As mentioned already, this might require you to register for VAT in EU countries where you have customers. In some EU countries where you register for VAT, you also need a VAT representative (someone local who’ll be responsible for following the VAT rules) in the country you’re exporting to. For more information, visit https://tinyurl.com/ybt6lr3x .

Selling digital services to EU consumers. If you sell digital products, e.g. books or software, to customers in the EU you’ve probably used the UK VAT mini one stop shop (MOSS) to account for VAT. If so, you’ll be deregistered from UK MOSS from 1 January 2021. You may instead be able to register for MOSS in an EU country. For more information, visit https://tinyurl.com/y5wmxchx and https://tinyurl.com/y4jvjdoa .

VAT refunds from EU countries. Currently where you pay VAT on goods and services while visiting an EU country, e.g. a hotel bill, you can reclaim it via HMRC’s EU refund portal. This service will close on 31 March 2021 for VAT incurred on or after 1 January 2021. For information on the position where you incur VAT after that date, visit https://tinyurl.com/y4jvjdoa .

Customs and imports. In addition to VAT, importing goods from an EU country will involve new customs declarations, duties and tariffs. To find out about the rules, visit https://tinyurl.com/yyp8p8wl .

Northern Ireland (NI). Post-Brexit rules for doing business with NI will be especially tricky. NI will continue to follow EU VAT rules (for goods) but will remain as part of the UK for other VAT purposes. For VAT information on what steps you need to take in transactions with NI, visit https://tinyurl.com/y5f478kd and https://tinyurl.com/y6p4rewc . The Trader Support Service also provides useful guidance about the new NI customs rules at https://www.gov.uk/guidance/trader-support-service .

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Furlough Scheme Update & Changes

March 4, 2024

As some of you may have seen, the Government announced an extension of the furlough scheme on Friday 29th May 2020, these changes may significantly affect you as an Employer. The furlough scheme has been extended to 31st October 2020, however the following changes have been made: - The final date you can furlough an employee who has not previously been furloughed to qualify for the Job Retention Scheme grant is 10th June 2020, this means that they will have completed their 3 week qualifying period before the changes commence on 1st July 2020. Flexible furloughing becomes an option from 1st July 2020, whereby as any Employer you are able to bring an employee back to work on a part time basis. In respect of the hours worked, the employer would need to cover the cost, of whilst the Government will top up. Clearer guidance is expected on this on 12th June and we will keep you updated accordingly. Although the scheme has been extended to 31st October 2020, there are some changes coming in each month which are show in the table below. Please let us know as soon as possible if you should have any further queries regarding the Job Retention Scheme.

Self Employment Income Support Scheme Extension

March 4, 2024

As previously advised, the Government announced the above scheme to support those who were self employed who met the criteria to make a claim for 80% of their monthly profits up to a cap of £2,500 per month for the months of March, April and May. This allowed for a maximum claim of £7,500 to be claimed after 13th May when the application process was opened. To claim the initial 3 month period mentioned above, you must make your claim by Monday 13th July 2020. However, I would confirm that they have now extended the scheme end date and therefore you can apply again for additional support for the months of June, July & August. This has been reduced to 70% of your monthly profits up to a maximum cap of £2,190 per month, this is assuming you previously qualified and met the specific criteria. This extension cannot be claimed until August however but no specific application date has been advised by HMRC yet. This is to keep you up to date on the additional ongoing support available to you, up until 31st August.

How to claim self-employment support (SEISS)

March 4, 2024

As previously mentioned in our email to you regarding support available during the current Covid-19 crisis, some of you may have received the below email or a text from HMRC regarding the Self Employed Income Support Scheme (SEISS). If you have not received either please do not panic, HMRC are sending out letters but this takes longer. It does not mean that you are ineligible. Whether you have or haven’t received an email, text or letter from HMRC, we would suggest the first step to be taken as per the details in the email below would be to check if you are eligible by entering your details in to the Eligibility Checker as per this link - https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference Details you will need are your 10 digit unique tax reference number (UTR) together with your National Insurance number, both of which can be found on your income tax return in the top left hand corner under the HMRC logo under ‘UTR’ and ‘Tax Reference’. If however you are unable to locate these details, please email us requesting the information as we will not be giving these details by phone. Once you have completed the above step, if you qualify it will state that you need to login via your Government Gateway, if you do not have one then please select the necessary option to create a Government Gateway account and follow the necessary steps. You will need your passport/P60 to hand to enable you to complete the necessary security checks before the account can be set up. Assuming all goes to plan with HMRC having the system available, from tomorrow (13th May), you will be able to commence making your claim, the information in red below on the HMRC email, gives the information required to complete your claim. Please be aware of the following points: - · To qualify over 50% of your total income received during 2018/19 must have been from self-employment to qualify. · Profits from your self-employment must be under £50,000 to qualify. · As with any official emails or texts from HMRC, they will not contain any personal details or request that you select links so any that are received by you requesting this please simply delete and ignore as they are scams. Dear customer, The Chancellor, Rishi Sunak, announced a new scheme at the end of March to support self-employed people impacted by coronavirus. It’s about to launch ahead of schedule and we’re writing to you because you might be eligible to make a claim under the scheme. The Self-Employment Income Support Scheme provides a taxable grant of 80% of average monthly trading profits, paid in a single instalment of up to a total of £7,500. This email sets out how to check your eligibility and how to make a claim. How to check if you are eligible Search GOV‌.UK for 'Self-Employment Income Support Scheme' from Monday 4‌‌ May. To complete this eligibility check, you’ll need to have your: National Insurance number – if you don’t know this, go to the HMRC app, your online tax account or ask your tax agent (if you have one). Self Assessment Unique Taxpayer Reference (UTR) number – you can find this on your self assessment papers or from your agent. If we confirm you are eligible, you’ll then need your: Government Gateway user ID and password – if you don’t have an account, or have forgotten your details, follow the instructions on GOV‌.UK by searching for the 'Self-Employment Income Support Scheme'. Please check your contact details are correct in your Government Gateway account. You cannot access the financial support yet. We’ll send you another email soon to tell you when the claim system is available for you to use. We expect this to be between 13 and 18‌‌ May. How to make a claim You’ll need to make the claim yourself, although you can seek advice from an agent if you use one. Once we have contacted you with your claim date, please follow these simple steps to make your claim: All you will need are your Government Gateway user ID and password, bank account number and sort code. We will calculate the income support you’re entitled to, based on the information you have submitted in your previous tax returns. After we’ve received your claim and verified it, we’ll pay the money directly into your bank account within six working days. Please only call us if you cannot find the support you need on GOV‌.UK or our webchat service – this will leave our lines open for those who need our help most. A word about scams We are aware of an increase in scam emails, calls and texts. If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, please do not respond. You can forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599. I wish you all the best at this challenging time. Yours sincerely jharra Jim Harra Chief Executive and Permanent Secretary – HMRC

July 2020 Income Tax Payment Deferral

March 4, 2024

As you may be aware due to the current Coronavirus pandemic, as a self-employed individual you may be due to make a payment to HMRC on 31st July 2020. However, this has now been deferred until January 2021. If you are currently self-employed, you are eligible for this deferment. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment of your July 2020 payment on account until January 2021. HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of coronavirus and have outstanding tax liabilities. Should you have any further queries regarding this please let me know, however you should be aware whether you have a July payment due as well when we prepared your personal self-assessment tax return for the year ended 05/04/19 we would have notified you alongside your January 2020 payment details of the amount due in July 2020.