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BUSINESS NEWS ENGLAND

shaikh May 17, 2021 📷 Welcome to our round up of the latest business and Covid-19 news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you through these tough times.More than 20 million UK adults receive both doses of COVID-19 vaccineMore than 36 million people in the UK have been vaccinated with 1 dose and 20 million have received 2 doses. The country’s most vulnerable are to be offered their second COVID-19 vaccine earlier, the government has announced, as part of plans to tackle rising cases of the B1.617.2 variant of concern first identified in India.Appointments for a second dose of a vaccine will be brought forward from 12 to 8 weeks for the remaining people in the top 9 priority groups who have yet to receive their second dose. This is to ensure people across the UK have the strongest possible protection from the virus at an earlier opportunity.Public Health England (PHE) analysis shows for the first time that individuals who receive a single dose of the AstraZeneca vaccine have approximately 80% lower risk of death with COVID-19 compared with unvaccinated individuals.📷The report also shows protection against death from the Pfizer-BioNTech vaccine rises from approximately 80% after one dose to 97% after 2 doses.Separate new PHE analysis also confirms the Pfizer-BioNTec h vaccine is highly effective in reducing the risk of hospitalisation, especially in older ages.How the Lockdown rules change todayFrom 17 May government advice is we should continue to work from home if we can and below we summarise the new relaxed lockdown rules:Gathering limits will be eased. Outdoor gatherings will be limited to 30 people and indoor gatherings will be limited to 6 people or 2 households (each household can include a support bubble, if eligible). New guidance on meeting friends and family will emphasise personal responsibility rather than government rules. Instead of instructing you to stay 2m apart from anyone you don’t live with, you will be encouraged to exercise caution and consider the guidance on risks associated with COVID-19 and actions you can take to help keep you and your loved ones safe. Remember that the risks of close contact may be greater for some people than others and in some settings and circumstances, there will be specific guidance that you will need to follow even when you are with friends and family. Indoor entertainment and attractions such as cinemas, theatres, concert halls, bowling alleys, casinos, amusement arcades, museums and children’s indoor play areas will be permitted to open with COVID-secure measures in place. People will be able to attend indoor and outdoor events, including live performances, sporting events and business events. Attendance at these events will be capped according to venue type, and attendees should follow the COVID-secure measures set out by those venues. Indoor hospitality venues such as restaurants, pubs, bars and cafes can reopen. Organised indoor sport will be able to take place for all (this includes gym classes). This must be organised by a business, charity or public body and the organiser must take reasonable measures to reduce the risk of transmission. All holiday accommodation will be open (including hotels and B&Bs). This can be used by groups of up to 6 or 2 households (each household can include a support bubble, if eligible). Funeral attendance will no longer be limited to 30 people but will be determined by how many people the COVID-secure venue can safely accommodate with social distancing. Limits at weddings, wakes and other commemorative events will be increased to 30 people. Other significant life events, such as bar/bat mitzvahs and christenings, will also be able to take place with 30 people. The rules for care home residents visiting out and receiving visitors will change, allowing up to five named visitors (two at any one time), provided visitors test negative for COVID-19. All higher education students will be able to

access in-person teaching. Support groups and parent and child group gathering limits will increase to 30 people (not including under 5s) There will no longer be a legal restriction or permitted reason required to travel internationally. There will be a traffic light system for international travel, and you must follow the rules when returning to England depending on whether you return from a red, amber or green list country. ONS confirms economy growingThe Office for National Statistics (ONS) have published their latest figures on the economy showing that:Monthly gross domestic product (GDP) grew by 2.1% in March 2021, but remained 5.9% below its level in February 2020, which was the most recent month not affected by the coronavirus (COVID-19) pandemic. The rise in GDP was led by a month-on-month rise of 1.9% in services in March 2021, but this sector remained 7.2% below its February 2020 level; the monthly rise in services was led by the education sector (contributing 0.54 percentage points of the growth). Monthly production grew by 1.8% between February 2021 and March 2021 but remained 1.8% below its February 2020 level; the monthly rise in production was led by manufacturing (contributing 1.51 percentage points of the growth). Monthly manufacturing grew by 2.1% between February 2021 and March 2021 but remained 2.2% below its February 2020 level; the monthly rise was led by manufacturing of machinery and equipment not elsewhere classified. Monthly construction grew by 5.8% between February 2021 and March 2021, meaning it was 2.4% above its February 2020 level. We expect these positive figures to continue as we go through the summer, lock down restrictions are eased and if you need any help in planning for growth with your business and the incentives and finance available please call us.HMRC urge businesses to carry out due diligence into their labour supply chainHMRC is warning organisations about the use of mini umbrella companies in the labour supply chain and the need to carry out due diligence to protect the organisation from financial and reputational damage.Without a careful review of their labour supply chain the end user could find themselves liable for tax, national insurance and VAT avoided by entities inserted in the labour supply chain between them as end user and the workers engaged via the umbrella structure. This was highlighted in a recent BBC programme which identified 48,000 umbrella companies set up to exploit the £4,000 employment allowance. These companies were set up to supply workers to the NHS Covid testing programme outsourced to G4S. Similar arrangements continue to be marketed to allegedly sidestep the new “off-payroll” working rules.If you use agency or temporary workers or are an agency providing workers, you or one of the other parties in the labour supply chain may need to operate PAYE on the workers’ earnings – you should check who needs to do this. HMRC have provided the following advice on due diligence procedures:See: Advice on applying supply chain due diligence principles to assure your labour supply chains – GOV.UK (www.gov.uk)What are the risks?HMRC can ask you to account for unpaid tax and National Insurance contributions. For example, if an offshore agency supplies you with workers and they do not account for tax and National Insurance contributions payable through the PAYE system, then you may have to.To increase compliance with the off-payroll working rules in the private and voluntary sectors, organisations receiving an individual’s services (where the individual works through their own intermediary, most commonly their own limited company) are now responsible for assessing that individual’s employment status and determining whether the rules apply from April 2021. This reform already applies in the public sector where an individual works through their own intermediary.The off-payroll working reform from April 2021 will also provide HMRC with the power to recover unpaid tax and National Insurance contributions from you, or

the agency you contract with in some circumstances – if, for example, a UK-based agency lower down in your labour supply chain fails to account for tax and National Insurance contributions payable through the PAYE system under the off-payroll working rules and there is no realistic prospect of recovering the tax and National Insurance contributions from them. This change will apply to the public, private and voluntary sectors.See: 10 things about due diligence: supply chain assurance – GOV.UK (www.gov.uk)Employers’ NICs Relief for employees working in Freeport tax areasThe government have announced a new zero rate of secondary Class 1 National Insurance contributions (NICs) for eligible employers on the earnings of eligible employees working in a Freeport tax site.📷 In Great Britain (England, Scotland and Wales), this measure will provide those employers with physical premises in a Freeport tax site (Freeport employers) with a zero rate of secondary Class 1 National Insurance contributions on the earnings of new employees who spend 60% or more of their working time within Freeport tax site. This rate can be applied on the earnings of all new hires up to £25,000 per annum from 6 April 2022 for 36 months per employee. Legislation to introduce the relief is included in the National Insurance Contributions Bill 2021.This measure is in addition to the tax breaks and Customs Duty exemptions announced in the March Budget for businesses operating in these designated areas.The first 8 Freeports announced in the Budget are located at East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth and South Devon, Solent, Teesside and Thames.See: Zero-rate of secondary NICs for Freeport employees – GOV.UK (www.gov.uk)COVID-19 GOVERNMENT SUPPORT NEWSBelow is our weekly roundup of changes to government support information generally and for businesses, employers and the self-employed.Coronavirus and changing young people’s labour market outcomes in the UK: March 2021The Office for National Statistics (ONS) have performed an analysis of labour market outcomes for young people (aged 16 to 24 years), how the young people were impacted by the coronavirus (COVID-19) pandemic.Their findings are unsurprising in many ways and optimistic for the future employment prospects of the younger workforce. The main points are:Young people’s employment rate saw a large decline in 2020 compared with 2019, while their unemployment and economic inactivity rates increased. After an initial fall in young people in full-time education in the first few months of the pandemic, the proportion of young people in full-time education increased in the second half of 2020, reaching a new high of 46.8% in Quarter 3 (July to Sept) 2020. The number of young people employed in the accommodation and food services industry who moved to unemployment or economic inactivity increased by more than 50% in Quarter 2 (April to June) 2020 compared with Quarter 2 2019. Young people who worked part-time moved from employment to economic inactivity at a faster rate than they moved to unemployment in 2020. Young people’s labour mobility (job-to-job moves) declined more during the pandemic than for older age groups. See: Coronavirus and changing young people’s labour market outcomes in the UK – Office for National Statistics (ons.gov.uk)NHS Test and Trace in the workplaceThe guidance on what to do if you or someone you employ is contacted by NHS Test and Trace, including self-isolation, sick pay and financial support has been updated following the recent relaxations in lockdown rules.See: NHS Test and Trace in the workplace – GOV.UK (www.gov.uk)Self-Employment Income Support Scheme (SEISS) – Help and support if your business is affected by coronavirusWatch videos and register for the free webinars to learn more about the support available to help you deal with the economic impacts of coronavirus. A catch up webinar for the SEISS – fourth grant has been added. This webinar takes you through the aim of the scheme,

who can apply, how much you may be entitled to, how to claim the fourth grant, and what happens after you have claimed.See: Help and support if your business is affected by coronavirus (COVID-19) – GOV.UK (www.gov.uk)Help to Grow your businessThe government’s new Help to Grow programme is now open for registrations and will launch in June. The programme will help small and medium sized businesses across the UK learn new skills, reach new customers and improve profits.The Help to Grow Management scheme offers small businesses a 12 week programme delivered by leading business schools across the UK, accredited by the Small Business Charter. The programme will combine a practical curriculum, with 1:1 support from a business mentor, peer-learning sessions and an alumni network. Designed to be manageable alongside full-time work, this programme will support small business leaders to develop their strategic skills with key modules covering financial management, innovation and digital adoption. By the end of the programme participants will develop a tailored business growth plan to lead their business to its full potential.30,000 places will be available over 3 years. The programme is 90% subsidised by government – participants will be charged £750.Who is it for?UK businesses from any sector that have been operating for more than 1 year, with between 5 to 249 employees are eligible. The participant should be a decision maker or member of the senior management team within the business e.g. Chief Executive, Finance Director etc. Charities are not eligible.Register your interest here: Help to Grow – Management – Small Business CharterThe Help to Grow Digital Scheme will enable small businesses to get free impartial advice on how technology can boost their performance through a new online platform. The scheme starts this Autumn.Eligible businesses will also be able to get a discount of up to 50% on the costs of approved software, worth up to £5,000. Vouchers are initially expected to be available for software that helps businesses:build customer relationships and increase sales make the most of selling online manage their accounts and finances digitally Who is it for?All businesses will be able to benefit from free online advice on the platform.The voucher is expected to be available to UK business that:employ between 5 and 249 employees and are registered at Companies House have been trading for more than 12 months are purchasing the discounted software for the first time Full details on the businesses and software eligible for the voucher will be published this summer.Register your interest here: Company registration number – Help to Grow: Digital – GOV.UK (register-help-to-grow-scheme.service.gov.uk)This may be useful to help businesses preparing for Making Tax Digital (MTD) for income tax self-assessment and MTD for corporation tax. Please contact us if you would like to discuss digital accounting.Private providers of coronavirus testingThe Lists of and information about private providers who have self-declared that they meet the government’s minimum standards for the type of commercial COVID-19 testing service they offer have been updated.See: Private providers of coronavirus testing – GOV.UK (www.gov.uk)New ‘We Offer Testing to our Staff’ scheme launchedA new sticker scheme will allow businesses to easily show they are testing their staff regularly has been launched.A new scheme for businesses offering workplace testing for staff through NHS Test and Trace has been launched across the UK. It will show customers, employees and the wider public the businesses that are going the extra mile to keep their staff and the public safe.In addition to workplace testing, business owners and staff should all follow essential behaviours such as ‘Hands, Face, Space, Fresh Air’ and, where applicable, checking customers and visitors in using the NHS COVID-19 app.Businesses that offer rapid workplace testing to staff, either through on-site testing or workplace test collection, will be able to download

posters and stickers to demonstrate their offer for free, regular testing to their employees keeping people safe.More than 122,000 businesses have signed up for free workplace testing already, using free government-supplied rapid test kits from NHS Test and Trace. All organisations that registered before 12 April and self-declared their involvement are eligible for the scheme.Participating firms will be able to access digital assets including stickers and posters from Tuesday 11 May and can be accessed by participating firms online via the online ordering platform.The aim is by prominently displaying the stickers on their websites or on their premises, alongside existing materials which promote checking customers and visitors in, businesses will be able to demonstrate to their customers that the health of staff, customers and their local communities is a key priority.See: New ‘We Offer Testing to our Staff’ scheme launched – GOV.UK (www.gov.uk)Right to work checks – Temporary measures ending on 20 JuneAdvice for employers carrying out right to work checks during the coronavirus pandemic has been updated and replaces previous guidance issued on 20 April 2021.The temporary COVID-19 adjusted right to work checks will now end on 20 June 2021, and from 21 June 2021 employers will revert to face to face and physical document checks as set out in legislation and guidance.This is aligned with the easing of lockdown restrictions and social distancing measures, as set out in the roadmaps for all regions of the UK.Updated advice for employers carrying out right to work checks during the coronavirus (COVID-19) pandemic.The following temporary changes were made on 30 March 2020 and remain in place until 20 June 2021 (inclusive):checks can currently be carried out over video calls job applicants and existing workers can send scanned documents or a photo of documents for checks using email or a mobile app, rather than sending originals employers should use the Employer Checking Service if a prospective or existing employee cannot provide any of the accepted documents Checks continue to be necessary and you must continue to check the prescribed documents set out in right to work checks: an employer’s guide or use the online right to work checking service. It remains an offence to knowingly employ anyone who does not have the right to work in the UK.Checking an individual’s right to work using the temporary COVID-19 adjusted check measuresUp to and including 20 June 2021, if you are carrying out a temporary adjusted check, you must:ask the worker to submit a scanned copy or a photo of their original documents via email or using a mobile app arrange a video call with the worker – ask them to hold up the original documents to the camera and check them against the digital copy of the documents record the date you made the check and mark it as “adjusted check undertaken on [insert date] due to COVID-19 if the worker has a current Biometric Residence Permit or Biometric Residence Card or has been granted status under the EU Settlement Scheme or the points-based immigration system you can use the online right to work checking service while doing a video call – the applicant must give you permission to view their details. End of temporary adjustmentsThe temporary adjustments to Right to Work checks due to COVID-19 are ending.From 21 June 2021 you must either:check the applicant’s original documents, or check the applicant’s right to work online, if they’ve given you their share code Retrospective checksYou do not need to carry out retrospective checks on those who had a COVID-19 adjusted check between 30 March 2020 and 20 June 2021 (inclusive). This reflects the length of time the adjusted checks have been in place and supports business during this difficult time.You will maintain a defence against a civil penalty if the check you have undertaken during this period was done in the prescribed manner or as set out in the COVID-19 adjusted checks guidance.It remains an offence to work illegally in the UK. Any

individual identified who is disqualified from working by reason of their immigration status, may be liable to enforcement action.If the job applicant or existing worker cannot show their documentsYou must contact the Home Office Employer Checking Service. If the person has a right to work, the Employer Checking Service will send you a ‘Positive Verification Notice’. This provides you with a statutory excuse for 6 months from the date in the notice.See: Coronavirus (COVID-19): right to work checks – GOV.UK (www.gov.uk)Providing apprenticeships during the coronavirus (COVID-19) pandemicThis guidance is for apprenticeship training providers (providers), employers, end-point assessment organisations (EPAOs) and apprentices.It describes:how and when apprentices can safely train and undertake an assessment in the workplace, education and assessment settings the temporary flexibilities which apply during the coronavirus (COVID-19) pandemic It should be read alongside:the safer working guidance the further education (FE) operational guidance the government’s coronavirus (COVID-19) guidance and support for businesses the apprenticeship funding rules the Institute for Apprenticeships and Technical Education guidance the public health guidance to support exams The aim is to help employers and apprentices start, continue and complete their apprenticeships wherever possible. Some of this guidance can be found on the apprenticeship service help page for employers, providers and assessment organisations, as well as in articles for apprentices.On-site training and assessmentFrom 8 March 2021, all apprentices can attend on-site training and assessment. The only exception is apprentices in higher education (HE) who can only return to HE settings if they need practical training and access to specialist equipment and facilities.From 17 May 2021, all apprentices in HE can return to in-person teaching and learning alongside Step 3 of the roadmap out of lockdown.See: Providing apprenticeships during the coronavirus (COVID-19) pandemic – GOV.UK (www.gov.uk)Vocational, technical and other general qualifications in 2021 – Wales, England and Northern IrelandPublications relating to the awarding of vocational, technical and other general qualifications in the academic year 2020 to 2021 has been updated with a 2021 student guide.See:  Vocational, technical and other general qualifications in 2021 – GOV.UK (www.gov.uk)Demonstrating your COVID-19 vaccination status when travelling abroad – EnglandHow to demonstrate your coronavirus (COVID-19) vaccination status to show that you’ve had the full course of the COVID-19 vaccine and access this status when travelling abroad.COVID-19 vaccination status is available to people who live in England. You can get your vaccination status in digital or paper format. The service went live from Monday 17 May.See: Demonstrating your COVID-19 vaccination status when travelling abroad – GOV.UK (www.gov.uk)Maintaining records of staff, customers and visitors to support NHS Test and Trace – EnglandDesignated venues in certain sectors must have a system in place to request and record contact details of their customers, visitors and staff to help break the chains of transmission of coronavirus. This has been updated in line with step 3 of the roadmap to explain how certain venues should be collecting customer, visitor and staff contact details and displaying an NHS QR code poster.See: Maintaining records of staff, customers and visitors to support NHS Test and Trace – GOV.UK (www.gov.uk)We Offer Testing to our Staff (WOTTOS): endorsement scheme – EnglandGuidance about a simple and free voluntary promotional scheme for firms who are participating in the government’s free coronavirus (COVID-19) workplace testing programme.See: We Offer Testing to our Staff (WOTTOS): endorsement scheme – GOV.UK (www.gov.uk)Claiming financial support under the Test and Trace Support Payment scheme – EnglandThe £500 Test and Trace Support Payment is for people on low incomes who have to self-isolate due to

coronavirus (COVID-19). You may be eligible if you are employed or self-employed, cannot work from home, and will lose income as a result. You can only apply if you’ve been told to self-isolate by NHS Test and Trace, notified to self-isolate by the NHS COVID-19 app, or you’re the parent or guardian of a child who has been told to self-isolate.If you’ve been told to self-isolate by NHS Test and Trace, you’re legally required to do so. If you’ve been notified by the NHS COVID-19 app to self-isolate and you apply for the Test and Trace Support Payment, you will be legally required to self-isolate.Who can applyYou might be able to get a payment of £500 to support you during self-isolation if you live in England and meet all the following criteria:you’ve been told to stay at home and self-isolate by NHS Test and Trace or the NHS COVID-19 app, either because you’ve tested positive for COVID-19 or have recently been in close contact with someone who has tested positive you’ve responded to messages from NHS Test and Trace and have provided any legally required information, such as details of your close recent contacts you’re employed or self-employed you’re unable to work from home and will lose income as a result of self-isolating you’re currently receiving or are the partner of someone in the same household who is receiving, at least one of the following benefits:Universal Credit Working Tax Credit income-based Employment and Support Allowance income-based Jobseeker’s Allowance Income Support Housing Benefit Pension Credit If you’re not on one of these benefits, you might still be able to apply for a £500 discretionary payment if all the following apply:you meet all the other criteria listed above you’re on a low income you will face financial hardship as a result of self-isolating See: Claiming financial support under the Test and Trace Support Payment scheme – GOV.UK (www.gov.uk)Traffic light system: safe return to international travelFrom 17 May, the ‘Stay in the UK’ regulation will cease, and international travel will be allowed to restart, governed by a new traffic light system.The traffic light systemAs the virus is still spreading in many parts of the world, the government advises people should not be travelling to amber or red countries.The green list comprises of the following 12 countries and territories when international travel resumes on 17 May:Portugal (including the Azores and Madeira) Israel and Jerusalem Gibraltar Iceland Singapore Australia Brunei Darussalam Falkland Islands Faroe Islands New Zealand Saint Helena, Ascension and Tristan da Cunha South Georgia and the South Sandwich Islands Countries on the green list pose the lowest risk, therefore passengers who have only visited or transited through a green list country will not be required to quarantine on arrival in England. They will be required to fill in the passenger locator form, provide a valid notification of a negative test result prior to travel and take a sequencing test on day 2 after arrival.See: Traffic light system: safe return to international travel – GOV.UK (www.gov.uk)Demonstrating COVID-19 vaccination statusFrom 17 May, people in England who have had the vaccine will be able to demonstrate their COVID-19 vaccination status for outbound travel using the NHS app or letter. In due course, the app will allow people to show evidence of negative tests as they travel out of the country.See: Traffic light system: safe return to international travel – GOV.UK (www.gov.uk)Landlord right to rent checksThis update replaces previous guidance issued on 20 April 2021.The temporary COVID-19 adjusted right to rent checks will now end on 20 June 2021, and from 21 June 2021 landlords will revert to face to face and physical document checks as set out in legislation and guidance. This is aligned with the easing of lockdown restrictions and social distancing measures, as set out in the government’s roadmap for England.The following temporary changes were made on 30 March 2020 and remain in place until 20 June 2021

(inclusive):checks can currently be carried out over video calls tenants can send scanned documents or a photo of documents for checks using email or a mobile app, rather than sending originals landlords should use the Landlord Checking Service if a prospective or existing tenant cannot provide any of the accepted documents Checks continue to be necessary and you must continue to check the prescribed documents set out in Landlords Guide to Right to Rent or use the online right to rent checking service. It remains an offence to knowingly rent to a person who does not have the right to rent in the UK.End of temporary adjustmentsThe temporary adjustments to Right to Rent checks due to COVID-19 are ending. From 21 June 2021 you must either:check the applicant’s original documents, or check the applicant’s right to rent online, if they’ve given you their share code See: Coronavirus (COVID-19): landlord right to rent checks – GOV.UK (www.gov.uk) CategoryCovid-19

[joelchristina26]

COVID-19 GOVERNMENT SUPPORT NEWS

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Welcome to our round up of the latest business and Covid-19 news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you through these tough times.Changes to the Coronavirus Job Retention Scheme (CJRS)CalculationsGovernment guidance on calculating how much you have to pay your furloughed employees for hours on furlough and how much you can claim back has been updated with new maximum wage tables and claim dates.See: Calculate how much you can claim using the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)Find examples to help you calculate your employees’ wagesCheck examples to help you calculate your employee’s wages, National Insurance contributions and pension contributions if you’re claiming through the Coronavirus Job Retention Scheme.See:  Find examples to help you calculate your employees’ wages – GOV.UK (www.gov.uk)Check which employees you can put on furlough to use the Coronavirus Job Retention SchemeThe Section on employee transfers under TUPE and on a change in ownership has been updated.See: Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)Steps to take before calculating your claimThe section about employee reference dates added and changes made throughout the page to include employee reference dates.See: Steps to take before calculating your claim using the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)Penalties for not telling HMRC about CJRS overpayments – CC/FS48.If you have received a grant but were not eligible or you have been overpaid, find out what penalties you may have to pay if you do not tell HMRC.See:  Penalties for not telling HMRC about Coronavirus Job Retention Scheme grant overpayments – CC/FS48 – GOV.UK (www.gov.uk)Self-Employment Income Support Scheme (SEISS) UpdateThis guidance has been updated with information about the fourth SEISS grant. The online service to claim the fourth grant will be available from late April 2021. If you are eligible based on your tax returns, HMRC will contact you in mid-April to give you a date that you can make your claim from. It will be given to you either by email, letter or within the online service. You must make your claim on or before 1 June 2021.See: Claim a grant through the Self-Employment Income Support Scheme – GOV.UK (www.gov.uk)How HMRC works out trading profits and non-trading income for the SEISSHMRC look at your trading profits and non-trading income on your Self-Assessment tax returns to check if you meet the eligibility criteria for the fourth grant. They also use your average trading profits to work out how much grant you will get.See:  How HMRC works out trading profits and non-trading income for the Self-Employment Income Support Scheme – GOV.UK (www.gov.uk)If you need help in claiming the fourth SEISS grant please contact us. We have access to accurate calculators to work out your likely claim amount.Recovery Loan Scheme updateThe Recovery Loan Scheme supports access to finance for UK businesses as they grow and recover from the disruption of the COVID-19 pandemic.Up to £10 million is available per business. The actual amount offered, and the terms are at the discretion of participating lenders.The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.The scheme is open until 31 December 2021, subject to review.Loans are available through a network of accredited lenders, listed on the British Business Bank’s website.EligibilityYou can apply for a loan if your business:is trading in the UK You need to show that your business:would be viable were it not for the pandemic has been adversely impacted by the pandemic is not in collective insolvency proceedings (unless your business is in scope of the Northern Ireland Protocol in which case different eligibility rules may apply) Business that received support under the earlier COVID-19 guaranteed loan schemes are still eligible to access finance under this

scheme if they meet all other eligibility criteria.Who cannot applyBusinesses from any sector can apply, except:banks, building societies, insurers and reinsurers (but not insurance brokers) public-sector bodies state-funded primary and secondary schools What you can getterm loans or overdrafts of between £25,001 and £10 million per business invoice or asset finance of between £1,000 and £10 million per business No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.How long the loan is forThe maximum length of the facility depends on the type of finance you apply for and will be:up to 3 years for overdrafts and invoice finance facilities up to 6 years for loans and asset finance facilities How to applyFind a lender accredited to offer Recovery Loans from the list on the British Business Bank website: Recovery Loan Scheme: current accredited lenders – British Business Bank (british-business-bank.co.uk)There is more detailed information on our website www.shaikhandcoaccountants.comThat’s all for today, keep safe , healthy and busy

[joelchristina26]

COVID-19 GOVERNMENT SUPPORT NEWS

shaikh April 15, 2021

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Welcome to our round up of the latest business and Covid-19 news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you through these tough times.Changes to the Coronavirus Job Retention Scheme (CJRS)CalculationsGovernment guidance on calculating how much you have to pay your furloughed employees for hours on furlough and how much you can claim back has been updated with new maximum wage tables and claim dates.See: Calculate how much you can claim using the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)Find examples to help you calculate your employees’ wagesCheck examples to help you calculate your employee’s wages, National Insurance contributions and pension contributions if you’re claiming through the Coronavirus Job Retention Scheme.See:  Find examples to help you calculate your employees’ wages – GOV.UK (www.gov.uk)Check which employees you can put on furlough to use the Coronavirus Job Retention SchemeThe Section on employee transfers under TUPE and on a change in ownership has been updated.See: Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)Steps to take before calculating your claimThe section about employee reference dates added and changes made throughout the page to include employee reference dates.See: Steps to take before calculating your claim using the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)Penalties for not telling HMRC about CJRS overpayments – CC/FS48.If you have received a grant but were not eligible or you have been overpaid, find out what penalties you may have to pay if you do not tell HMRC.See:  Penalties for not telling HMRC about Coronavirus Job Retention Scheme grant overpayments – CC/FS48 – GOV.UK (www.gov.uk)Self-Employment Income Support Scheme (SEISS) UpdateThis guidance has been updated with information about the fourth SEISS grant. The online service to claim the fourth grant will be available from late April 2021. If you are eligible based on your tax returns, HMRC will contact you in mid-April to give you a date that you can make your claim from. It will be given to you either by email, letter or within the online service. You must make your claim on or before 1 June 2021.See: Claim a grant through the Self-Employment Income Support Scheme – GOV.UK (www.gov.uk)How HMRC works out trading profits and non-trading income for the SEISSHMRC look at your trading profits and non-trading income on your Self-Assessment tax returns to check if you meet the eligibility criteria for the fourth grant. They also use your average trading profits to work out how much grant you will get.See:  How HMRC works out trading profits and non-trading income for the Self-Employment Income Support Scheme – GOV.UK (www.gov.uk)If you need help in claiming the fourth SEISS grant please contact us. We have access to accurate calculators to work out your likely claim amount.Recovery Loan Scheme updateThe Recovery Loan Scheme supports access to finance for UK businesses as they grow and recover from the disruption of the COVID-19 pandemic.Up to £10 million is available per business. The actual amount offered, and the terms are at the discretion of participating lenders.The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.The scheme is open until 31 December 2021, subject to review.Loans are available through a network of accredited lenders, listed on the British Business Bank’s website.EligibilityYou can apply for a loan if your business:is trading in the UK You need to show that your business:would be viable were it not for the pandemic has been adversely impacted by the pandemic is not in collective insolvency proceedings (unless your business is in scope of the Northern Ireland Protocol in which case different eligibility rules may apply) Business that received support under the earlier COVID-19 guaranteed loan schemes are still eligible to access finance under this scheme if they meet all other

eligibility criteria.Who cannot applyBusinesses from any sector can apply, except:banks, building societies, insurers and reinsurers (but not insurance brokers) public-sector bodies state-funded primary and secondary schools What you can getterm loans or overdrafts of between £25,001 and £10 million per business invoice or asset finance of between £1,000 and £10 million per business No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.How long the loan is forThe maximum length of the facility depends on the type of finance you apply for and will be:up to 3 years for overdrafts and invoice finance facilities up to 6 years for loans and asset finance facilities How to applyFind a lender accredited to offer Recovery Loans from the list on the British Business Bank website: Recovery Loan Scheme: current accredited lenders – British Business Bank (british-business-bank.co.uk)There is more detailed information on our website www.shaikhandcoaccountants.comThat’s all for today, keep safe , healthy and busy

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News on Recovery Loan Scheme & Coronavirus Job Retention Scheme – Update

shaikh April 8, 2021

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Some UpToDate on news on recovery loan scheme and other provisions, more detailed information can be found on our website www.shaikhandcoaccountants.comPlease contact us if you want to talk about how these updates affect your business. We are here to support you through these tough times.Recovery Loan Scheme launches todayThe Recovery Loan Scheme will ensure businesses continue to benefit from Government-guaranteed finance throughout 2021. Loans will include 80% government guarantee and interest rate cap.With non-essential retail and outdoor hospitality reopening next week, Ministers have ensured that appropriate support is still available to businesses to protect jobs. From today, businesses – ranging from coffee shops and restaurants to hairdressers and gyms – and can access loans varying in size from £25,000, up to a maximum of £10 million. Invoice and asset finance is available from £1,000.See: Recovery Loan Scheme launches today – GOV.UK (www.gov.uk)Coronavirus Job Retention Scheme – UpdateThe Coronavirus Job Retention Scheme has been extended until 30 September 2021.Claims for furlough days in March 2021 must be made by 14 April 2021.See: Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)NHS Test and Trace in the workplaceEmployers must take steps to keep workers and visitors safe. By following the COVID secure guidelines, employers can reduce the risk of co-workers having to self-isolate if a member of staff tests positive for COVID-19, or is identified as having had close contact with someone who has tested positive.Working from home, where possible, is essential to limiting mixing between households. People should work from home unless it is not reasonable to do so. If necessary, workers can travel for work purposes and stay away from home.It is vital that employers play their part by:supporting staff to work from home making workplaces as safe as possible (if working from home is not possible) not knowingly allow workers who are required to self-isolate to attend the workplace encouraging employees to download and use the NHS COVID-19 app Employers must continue to ensure the health, safety and welfare of their employees and other people in the workplace. This includes, but is not limited to workers, agency workers, contractors, volunteers, customers, suppliers and other visitors.See: NHS Test and Trace in the workplace – GOV.UK (www.gov.uk)

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IR35 UPDATE AND PLANNING -The Private Sector Changes from 6th April 2021

shaikh April 1, 2021

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If you are in the contracting industry or use a personal Service Company ( PSC ) , you will be aware of the impending new rules coming in the Private Sector and the changes from 6th April 2021, it is complex and the official guidance in places confusing, the tool CEST provided by the HMRC to help with status determination has come under a great deal of criticism being inconsistent and unclear.I have tried to briefly explain below how in practice the determination process should take place when correctly assessing as to whether a business falls within the confines of IR35, this article should also help in laying plans for the future.There is too much to cover in one article , especially the accounting and tax implications of this to the companies caught by the IR35, I will cover this bit separately in the ensuing articlesThe first point to note is that the new bit of legislation only applies to medium and large businesses engagers in the private sector, those engager businesses that are small do not have to apply the rules.Accordingly, a Personal Service Company (PSC) engaged by a small business from 6th April 2021, will continue to self- assess its own IR35 status and be liable for its tax and NIC deductions under the existing IR35 legislation.To be a large or medium sized engager, it must meet two of the following conditions:• Turnover – More than £10.2 million• Balance sheet total – More than 5.1 million• Number of employees – More than 50In terms of employees, part time employees are included in the qualifying number.So by default, a business with turnover less than £10.2 million will be small and need not carry out determination of status, instead the business it engages will need to carry out the determination itselfThe Five main factors ( there are others I shall discuss in the next article ) that has to be considered in working out if IR35 may apply are summarised below, for ease of illustration, Fred here is the main contractor ( engager) and Bob the subcontractor, through his company Bob LtdControl There must be no control or absolutely minimal control over Bob;No mutuality of obligations There must be no ongoing and regular obligation for Fred  to have to give him work and Bob also must have no obligation to accept it. To be self-employed you must be able to show that you can turn work down. HMRC conveniently try to ignore mutuality of obligations. Indeed it was not featured whatsoever on the first version of CEST, This is unfair!The judges in court do not ignore mutuality of obligations! It has regularly been an important and deciding factor in many cases over the years both old and more recent!Substitute Has Bob got an agreed substitute in his engagement with Fred (say Alan)?Did Bob approve, choose and engage the substitute Alan? Has Bob ever used Alan?If so who billed who?If the substitute has been used, then Bob Ltd must still bill Fred, and Alan duly bills Bob Ltd.You must never have the substitute billing the ultimate engager, Fred!Some workers have, for the last few years, used substitute retainer arrangements!InsuranceDoes Bob Ltd pay the relevant insurance i.e. public liability insurance? This is an important factor, but HMRC will try and dismiss this! They should not! Employees will not pay this type of insurance!Financial Risk If the individual, via his personal service company, has very little financial risk, then this is not good. It leans towards an employment!If Bob has very little financial risk, then he is like a deemed employee!In summary, IR35 does not apply when Fred engages the individual directly, Bob, i.e. not through a personal serviceCompany, This will simply be a case of employed v self-employed, and a possible failure to operate PAYE.You must remember that the new IR35 private sector changes only apply to work performed by Bob Ltd on or after 6th April 2021.Finally, please look at the attached document, it is in 2 parts, if you happen to receive the first of the first part of the attached letter headed Model status Determination Statement ( when inside IR35 ), please do not

ignore it, contact us immediately as there is a right to appeal against this determination under the new client-led disagreement process. More on the subject to followWe  are here to help if you require any assistance 01892 5526696, there are also updated articles on our website www.shaikhandcoaccountants.com

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Research & Development Credits ( R&D )

shaikh March 25, 2021

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There were various points raised in the budget relating to the topic of Research and Development and the qualifying claims relating to it, and some misconception relating to the entitlement to this  relief, mainly brought about by some so called specialist R & D Claim experts, so here below some information, hopefully will be usefulResearch & Development Credits ( R&D )From 1 April 2015, SME companies that have incurred costs on qualifying R&D projects can obtain an uplift on these costs of 230%. It means that if a company spends £100, it will receive tax relief as if it had spent £230Where a company has unrelieved trading losses it may surrender the R&D tax relief in exchange for a tax credit at 14.5%The amount that can be surrendered is the lower of the actual tax-adjusted loss or the total qualifying expenditure (i.e. the qualifying costs plus the uplift).It is possible to make a ‘combination claim’, where the R&D tax credit can be used to bring the tax payable to zero, and surrender the balance of the relief for a repayable tax credit.R&D Relief is a Corporation Tax relief.There are two schemes for claiming relief, depending on the size of the company or organisation:·        The Small or Medium-sized Enterprise (SME) Scheme·        The Repayable Credit Large Company Scheme or R&D Expenditure Credit (RDEC).Here we focus on relief for SMEs, although noting that the large company scheme applies to SMEs in certain circumstances (see below for briefing on large companies).R&D relief is given in two different ways, by enhanced deduction or by payable credit.Preventing abuse of R&D relief by SME’sNew measures have been confirmed in order to prevent the abuse of R&D relief by SMEs and deter fraudulent claims where there is little or no genuine R&D activity.From 1 April 2021 (delayed from April 2020):·        The amount of payable credit that a qualifying loss-making business can receive through R&D relief in any one year will be capped.·        There will be a £20,000 minimum claim threshold below which the cap will not apply.·        The cap will be the threshold plus three times the company’s total PAYE and NICs liability for that year.·        Relevant related party PAYE and NICs may be included in the calculation of the cap.·        Businesses will be exempt where a two-stage test is met:o   The company’s employees are creating, preparing to create or actively managing intellectual property, ando   the company’s expenditure on work subcontracted to, or EWPs provided by, a related party is less than 15% of the total R&D expenditure of the company.In order to claim relief, a company must have been engaged in qualifying R&D activity and then satisfy a number of specific conditions.The company must be a going concern. Any single R&D project must not receive total aid of more than €7.5m. Special rules and conditionsThere are special rules if a company has received state aid in respect of the project. Expenditure is not generally available if it has been subsidised. There are special rules for contracting and sub-contracting R&D. Some specialist R&D claims firms have automated selling processes that are designed to convince businesses that they are undertaking R&D, and so will qualify for a tax repayment by claiming R&D tax credits.Those R&D claims often succeed because HMRC hasn’t properly reviewed them, but this is changing. There are more cases of unsupported R&D claims being taken to the tax tribunals. For example see the case of AHK Recruitment Ltd, which is worth reading.HMRC has also updated its Corporate Intangibles Research and Development Manual to include common errors it finds when it examines an R&D claim (see CIRD80500).These errors cover almost every aspect of the R&D scheme but the list starts with the basic: “project activities outside the scope of R&D for tax purposes”.A myth being circulated in the building trade is that alterations to offices or buildings to accommodate covid-secure working qualify as R&D – they don’t. !!For a project to qualify as R&D for tax purposes it needs

to involve “an attempt to achieve an advance (in knowledge or capability) in a field of science or technology, through the resolution of scientific or technological uncertainty.”All those elements need to be present:an attempt to advance knowledge or capability in science or technology resolving a scientific or technological uncertainty. Guidance on what is R&D for tax purpose is set out in a paper linked to below, which is referred to in the R&D regulations.Even if the project does qualify as R&D there are plenty of other mistakes that can be made with an R&D claim; from including the wrong categories of expenditure, to claiming under the wrong scheme (SME or large company).If you have undertaken genuine R&D work our R&D tax experts would be happy to review the R&D claim to ensure HMRC don’t have a reason to challenge it years down the line.Common errors in R&D claimsAHK recruitment v HMRC [TC07718]Guidelines on meaning of R&D for tax purposesRemember we are here to help www.shaikhandcoaccountants.com or  01892 552696Stay healthy , safe and busy, I will be back with some more emails, sorry !!

[joelchristina26]

SELF-EMPLOYMENT INCOME SUPPORT SCHEME – FOURTH GRANT (SEISS)

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In the recent Budget, the chancellor has set out further support for the self-employed.In addition to the upcoming fourth grant there will also be a fifth SEISS grant covering the 5 months to 30 September.The chancellor has extended the scheme to include certain traders who were previously excluded. Thus, those who commenced self-employment in 2019/20 will now be included provided they had submitted their 2019/20 tax return by 2 March 2021. This is potentially a further 600,000 traders.The Budget confirmed that the fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.Conditions for the fifth grant will be linked to a reduction in business turnover. Self-employed individuals whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £2,500 a month. Those whose turnover has fallen by less than 30% will receive a 30% grant, capped at £950 a month. We are awaiting further details of this fifth grant and we will keep you up to date when we get more information.Eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received. To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership.To work out your eligibility HMRC will first look at your 2019 to 2020 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.If you are not eligible based on your 2019 to 2020 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.You must also have traded in both tax years:2019 to 2020 and submitted your tax return by 2 March 2021 2020 to 2021 You must either:be currently trading but are impacted by reduced demand due to coronavirus have been trading but are temporarily unable to do so due to coronavirus You must also declare that:you intend to continue to trade you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus To allow HMRC to process recently submitted 2019 to 2020 Self-Assessment tax returns, the online Claims service for the fourth grant will be available from late April 2021 until 31 May 2021.If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.There will be more guidance about the fourth and fifth grants in due course.Please contact us if you want to check your eligibility and estimate your claim.See:  https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension

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Tax E-News

Welcome to this special newswire. In this edition we focus on the Chancellor’s March Budget. Please contact us if you wish to discuss any matters in this newsletter in more detail.CHANCELLOR “LEVELS UP” WITH US ON TAX📷 In the Chancellor’s second real Budget on 3 March 2021 he announced that he had to level with people about the state of the UK economy.  Prior to Budget day there were fewer leaks than normal about possible tax changes. There were however announcements prior to Budget day of grants for High Street businesses and the hospitality sector and the widely predicted extension of the furlough scheme.Rishi Sunak has chosen a fine line between raising taxes to start paying down the massive Government borrowings but at the same time stimulate economic recovery and save jobs. He was also mindful of pledges made in the Conservative Party manifesto not to raise income tax, VAT and national insurance. So that leaves corporation tax, CGT and inheritance tax…Maybe he will delay the announcement of significant increases in taxation until later in the year as it is anticipated that there will be a further Budget in the Autumn. By then the economy will hopefully have started to bounce back.It has already been announced that there will be important consultation documents issued on 23 March which will seek views on future tax changes. That may be when the expected reforms to CGT and IHT will be announced.CJRS FURLOUGH SCHEME EXTENDED TO 30 SEPTEMBERThe current version of the furlough scheme that started on 1 November 2020 was scheduled to end on 30 April 2021. In order to avoid a “cliff-edge” with resulting widespread redundancies the chancellor has announced a further extension of the scheme and also a phased reduction in support to employers. The CJRS furlough grant for May and June will remain at 80% of the employees’ usual pay for hours not working but it will then be limited to 70% for July and then 60% for August and September.This phased reduction will operate in a similar way as in September and October 2020 with the employer being required to contribute the remaining 10% and then 20% of an employee’s regular pay so that they continue to receive 80% pay for furloughed hours.In addition to the 10% and 20% contributions employers will continue to be responsible for paying employers national insurance and pension contributions on the full amount being paid to employees.Contact us if you need assistance with your CJRS furlough claims.SELF-EMPLOYED INCOME SUPPORT GRANTS ALSO EXTENDEDIn line with the further extension of the CJRS furlough scheme for employees the chancellor has also set out further support for the self-employed. We had been waiting for the details of the calculation of the fourth SEISS grant covering the period to 30 April and we now know that the support will continue to be 80% of average profits for the reference period capped at £2,500 a month and can be claimed from late April. There will then be a fifth SEISS grant covering the 5 months to 30 September.The chancellor has also bowed to pressure to extend the scheme to include certain traders who were previously excluded. Thus, those who commenced self-employment in 2019/20 will now be included provided they had submitted their 2019/20 tax return by 2 March 2021. This is potentially a further 600,000 traders.Conditions for the fifth grant will be linked to a reduction in business turnover. Self-employed individuals whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £2,500 a month. Those whose turnover has fallen by less than 30% will receive a 30% grant, capped at £950 a month. We are awaiting further details of this fifth grant.CORPORATION TAX RATES TO INCREASE TO 25% BUT NOT FOR ALL COMPANIESThe UK corporation tax rate is currently one of the lowest rates of the G20 countries and the government states it is committed to keeping the rate competitive.That should have the effect of encouraging companies to remain in

the UK and companies to set up here. With other countries considering raising corporate tax rates the chancellor has announced that the UK will follow suit and consequently the rate will increase to 25% from 1 April 2023 where profits exceed £250,000. However, where a company’s profits do not exceed £50,000 the rate will remain at the current 19% rate and there will be a taper above £50,000. Businesses will however be able to take advantage of new tax breaks to encourage investment in equipment and an enhanced carry back of losses.SUPER-DEDUCTION FOR INVESTMENT IN NEW EQUIPMENTIn order to encourage companies to invest in new capital equipment the chancellor announced a radical new “super-deduction” of 130% where they invest in new plant. This would mean that when a company buys plant costing £10,000 they would qualify for a £13,000 deduction in arriving at business profits. The new deduction, which will run for two years from 1 April 2021, will not be available for motor cars. Certain assets such as fixtures in buildings will only qualify for 50% relief in the first year instead of the normal 6% writing down allowance.THREE YEAR CARRY BACK OF TRADING LOSSESMany businesses will have made a loss in the last year as a result of the Coronavirus pandemic and the difficult trading environment.Trading losses can normally only be set against profits of the preceding accounting period or previous tax year in the case of unincorporated businesses.The chancellor has announced that the carry back period will be temporarily increased to three years thereby enabling the business to obtain a tax refund. For companies this will apply to loss making accounting periods ending in the period 1 April 2020 to 31 March 2022. For unincorporated traders, the extended loss relief will apply to losses incurred in 2020/21 and 2021/22.The amount of trading losses that can be carried back to the preceding year remains unlimited for companies. After carry back to the preceding year, a maximum of £2,000,000 of unused losses will then be available for carry back against profits of the same trade of the previous 2 years. There will be a similar £2,000,000 limit for unincorporated businesses.NO CHANGES TO INCOME TAX RATES AND PERSONAL ALLOWANCE FROZENThe basic rate of income tax and higher rate remain at 20% and 40% respectively, and the 45% additional rate continues to apply to income over £150,000.The personal allowance and higher rate threshold have been increased in line with inflation to £12,570 and £50,270 respectively for 2021/22. These thresholds will then be frozen until 2025/26 possibly yielding an extra £19 billion for the government.There had again been rumours that the dividend rate might be increased, but dividends continue to be taxed at 7.5%, 32.5% and then 38.1%, depending upon whether the dividends fall into the basic rate band, higher rate band or the additional rate band. Note that the first £2,000 of dividend income continues to be tax-free.NATIONAL INSURANCE RATESThe national insurance contribution (NIC) rates and bandings were announced 16 December 2020 to take effect from 6 April 2021.Employees and the self-employed will not pay national insurance contributions (NIC) on the first £9,570 of earnings for 2021/22, an increase of £1 a week. The employee contribution rate continues to be 12% up to the Upper Earnings limit £50,270, with the self-employed paying 9% on their profits up to the same level. Note that employer contributions will apply to earnings over £170 per week, £8,840 per annum which is also a £1 a week increase.5% VAT RATE FOR FOOD, ATTRACTIONS AND ACCOMMODATION EXTENDEDIn order to continue to support businesses and jobs in the hospitality sector, the reduced 5% rate of VAT will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK until 30 September 2021.The 5% reduced rate of VAT will also continue to apply to supplies of accommodation and admission to attractions across the UK.From 1 October

until 31 March 2022 the rate will be set at 12.5% and will then revert to 20% from 1 April 2022.VAT REGISTRATION LIMIT FROZEN AT £85,000 UNTIL 1 APRIL 2024The VAT registration limit normally goes up each year in line with inflation but will remain at £85,000 for a further two years. Arguably this makes it easier for businesses to assess whether or not they are required to register for VAT as it is no longer a moving target.MAKING TAX DIGITAL EXTENDED TO ALL VAT REGISTERED BUSINESSES FROM 1 APRIL 2022The government has confirmed that the requirement to maintain accounting records in a digital format and submit the data to HMRC electronically will be extended to all VAT registered businesses from 1 April 2022 regardless of the level of taxable supplies.NEW GRANTS FOR HIGH STREET BUSINESSES AND HOSPITALITY SECTORBusinesses forced to close due to the Coronavirus lockdown will be eligible to apply for grants of up to £18,000 depending upon the rateable value of their business premises. Pubs, restaurants, hotels, gyms and hairdressers will be eligible for a grant of up to £18,000 per premises whilst non-essential retail businesses will be eligible to apply for a grant up to a maximum of £6,000.The grants are intended to be a contribution towards the fixed costs of the business during the period that they have been unable to trade normally. Staff costs continue to be covered by the CJRS furlough scheme.The government will also continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021.Unfortunately, the “Eat out to Help Out” scheme will not be reintroduced this Summer.NEW RECOVERY LOAN SCHEMEThe government have already announced a longer repayment period for “Bounce-back” and CBIL loans. From 6 April 2021 a new Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.SDLT THRESHOLDS EXTENDEDLast March in order to stimulate the housing market the Chancellor announced a temporary cut in Stamp Duty Land Tax for home buyers across England and Northern Ireland which was scheduled to last until 31 March 2021.This has now been further extended until 30 June 2021 so that transactions in progress will continue to benefit from the reduced rates.📷As a transitional measure from 1 July 2021 the Nil Rate Band of Residential SDLT in England and Northern Ireland will then decrease to £250,000 for 3 months until 1 October 2021 when it will revert to £125,000 for purchases completed on or after that date. There has been no change to the SDLT rates above the Nil Rate Band. The 3% supplementary charge for second and subsequent homes in England and Northern Ireland will continue to apply.Note that there are different rates of tax on property transactions in Scotland and Wales as such taxes have been devolved in those countries.5% MORTGAGE SCHEMES EXTENDEDAnother measure announced to stimulate the housing sector is a new 95% mortgage scheme guaranteed by the government that will mean that people buying a house will only need a 5% deposit where the purchase price is no more than £600,000.APPRENTICESHIP SCHEMES EXTENDEDThe current apprenticeship scheme will be improved with payments of £3,000 to employers in England for each new apprentice they hire aged under 25 and continue to pay the employer £1,500 for each new apprentice they hire aged over 25. The schemes will now run until 30 September 2021.Starting in January 2022 there will be a new “flexi-job” apprenticeship which will allow individuals to work for more than one company via an

agency.The “Kickstart” Scheme announced in the Summer 2020 Plan for Jobs will continue to be available for the 2021/22 academic year to create 6-month work placements aimed at those aged 16-24 who are on Universal Credit and at risk of long-term unemployment. Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee.EIGHT NEW FREEPORTS ANNOUNCEDIn eight locations around England there will be generous tax breaks to encourage businesses to locate there. These tax breaks include an exemption from SDLT, 100% first year allowances on plant and a 10% per annum structures and buildings allowance.

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Construction Industry Scheme reverse charge and CIS

shaikh January 27, 2021 One would have thought there is enough going on trying to cope with the challenges of COVID-19 , but HMRC in its wisdom have decided to introduce a complicated procedure to deal with Construction Industry Scheme reverse charge and CIS The Construction Industry Scheme (CIS) VAT Domestic Reverse Charge (DRC) applies to supplies of construction services from 1 March 2021. This article tries to address some of the important questions such as ,What is the CIS reverse charge? How do you account for VAT? Can you still cash account for VAT? What administrative changes do I need in order to operate the reverse charge? · The CIS VAT DRC applies to business to business sales of construction work. · The aim of the measure is to reduce VAT fraud in the construction sector. Where the DRC applies: · The customer, rather than the supplier, account to HMRC for VAT on the supplier’s behalf. o The customer accounts for the supplier’s output VAT. o A reclaim can be made on the same return if the customer is entitled to recover the VAT. o The supplier does not charge or collect VAT on its sale. The CIS DRC only applies to UK business to UK business (B2B) supplies where the recipient of the supply intends to make an ongoing supply to another party of construction services. The original October 2019 start date of the CIS DRC has been twice postponed due to the coronavirus and Brexit. It is currently expected to commence on 1 March 2021. The CIS DRC applies when all the following are met: · There is a supply for VAT of construction services and materials. · The supply is made at the standard or reduced-rate of VAT. · The supply is made between a UK VAT registered supplier and UK VAT registered customer. · Both supplier and customer are registered for the CIS. · The customer intends to make an ongoing supply of construction services to another party. · The supplier and customer are not connected. · The supplier is not an employment business. · The customer is not an ‘end-user’ or The CIS DRC does not apply to any of the following supplies: · Supplies of VAT exempt building and construction services. · Supplies that are not covered by the CIS, unless linked to such a supply. · Supplies of staff or workers. · Supplies of materials only. The CIS DRC does not apply to taxable supplies made to the following customers: · A non-VAT registered customer · A customer who is an ‘End User’ i.e. a VAT registered customer who is not intending to make further on-going supplies of construction. · A customer who is an ‘intermediary supplier’ and has informed the supplier of this status in writing. CIS DRC requires a significant change of approach in many CIS businesses: · Staff need to be trained to identify relevant CIS contracts and End Users. · Accounting and bookkeeping systems require modification to cope with the new invoicing and reporting obligations. · Use of the VAT Flat Rate scheme and Cash accounting may not be possible. · Cashflow will be affected and those at the start of the supply chain may become VAT repayment claimants: they need to consider whether to file monthly returns. · It may require a business who is the recipient of the supply to VAT register. Example: how the CIS reverse charge works John the Roofer (who is VAT registered) supplies the materials and roofs a new office building for Contractor who (who is also VAT registered) and in turn supplies its construction services to Developer (also VAT registered). Developer finds and develops land and will in this case, bring the build to completion and supply a finished commercial building to End user, its client. · John the Roofer would under the old VAT system, invoice Contractor £120,000, comprising of his £100,000 bill for materials, labour and works, plus £20,000 in VAT (at 20%). · From October 2020, under the new CI

[joelchristina26]

EXPORTING GOODS FROM GREAT BRITAIN TO THE EU FROM 1 JANUARY 2021

shaikh

January 25, 2021

From 1 January 2021, you will need to make customs declarations when exporting goods to the EU. These rules currently apply to exporting goods to the rest of the world, including Switzerland, Norway, Iceland and Liechtenstein.

You can make the declarations yourself or hire someone else such as a courier, freight forwarder or customs agent.

HIRING A PERSON OR BUSINESS TO DEAL WITH CUSTOMS FOR YOU

You can hire a person or business to deal with customs for you, such as:

freight forwarders

customs agents or brokers

fast parcel operators

What they can do for you (and who will be liable) depends on:

the services they provide

what you want them to do

the commercial agreement you have with them

they will need to be established in Great Britain or Northern Ireland.

FREIGHT FORWARDERS

Freight forwarders move goods around the world for exporters and importers.

A freight forwarder will arrange clearing your goods through customs. They will have software to communicate with HMRC’s systems. You can find out how to use a freight forwarder on the British International Freight Association and Institute of Export websites.

See: https://www.bifa.org/home

See: https://www.export.org.uk/

CUSTOMS AGENT OR BROKER

Customs agents and brokers help your goods clear through customs and borders.

You can hire a customs agent or broker to act as a:

direct representative

indirect representative

You can search these out on the internet.

Examples are: HansenMac: https://hansenmac.com/

Typically they will:

Check the classification and valuation of your goods, and make sure you use the right commodity codes

Liaise with government agencies and customs authorities on your behalf

Advise on any necessary licenses for export of restricted or hazardous goods

Prepare and submit documents which have to be filed to clear customs processes

See: https://smallbusiness.co.uk/customs-brokers-2544117/

Further information can also be found at UK Import Services Ltd: https://www.ukimports.org/services/import/customs-clearance/customs-clearance-broker-agent-information.php

FAST PARCEL OPERATORS

Fast parcel operators transport documents, parcels and freight across the world in a specific time frame. They can deal with customs for you, as part of their delivery.

They cannot act on your behalf without written instructions from you. The instruction must show whether they are acting for you directly or indirectly. HMRC will only ask for evidence of the authorisation if they need it.

See: https://www.gov.uk/guidance/international-trade-fast-parcel-operators

Getting someone to act directly

You can hire a person or business to act in your name. You will be liable for:

keeping records

the accuracy of any information provided on your customs declarations

any Customs Duty or VAT due

You cannot ask someone to act directly if they are submitting your declarations using:

simplified customs procedures

entry in the declarant’s records

When acting directly, even if they have authorisation, they can only submit those types of declarations if you have authorisation.

Getting someone to act indirectly

You can get someone to act for you in their own name, this means they are:

equally responsible for making sure the information is accurate

jointly and severally liable for any duty or VAT

If they have authorisation, you can get an indirect agent to make declarations using:

simplified customs procedures

entry in the declarant’s records

You cannot ask someone to act indirectly if you are declaring goods for:

inward processing

outward processing

temporary admission

end-use relief

private customs warehousing

MAKING EXPORT DECLARATIONS YOURSELF

If you are a UK-based business sending goods outside of the UK and from the 1 January to the EU as well as the rest of the world, you must complete an export declaration to get your goods through customs.

Before you start you must also have an Economic Operator Registration and Identification (EORI) number.

See: https://www.gov.uk/eori

You must also have a Customs Handling of Import and Export Freight (CHIEF) badge role (if you are using a freight forwarder you do not need to apply).

See: https://www.gov.uk/government/publications/import-and-export-trade-request-for-chief-access-via-wex-channels-pa7

If you get Authorised Economic Operator Customs Simplifications status this may speed up the process of applying for the National Export System.

Check if Authorised Economic Operator status could benefit you: https://www.gov.uk/guidance/authorised-economic-operator-certification

SUBMITTING A DECLARATION

Most declarations are submitted electronically using the National Export System. If you’re going to do this yourself, rather than appoint an agent, you will need to register for the National Export System.

See:  https://www.gov.uk/guidance/export-declarations-and-the-national-export-system-export-procedures

You must use the National Export System to make export declarations to customs.

You can use the system to send declarations through:

web

email

XML

Community Systems Providers

Registering for web declarations

To make your declaration through the web, you need a Government Gateway user ID and password. If you do not have a user ID, you can create one the first time you register.

See:  https://secure.hmce.gov.uk/ecom/login/index.html?

Registering for email declarations

To make your declaration by sending an email, you need a Government Gateway user ID and password. If you do not have a user ID, you can create one the first time you register. If you choose this method you’ll also need:

a CHIEF-compatible software package (EDIFACT)

an SMTP (standard) email connection

Email cannot be used for common agricultural policy declarations.

Registering for XML declarations

To make your declaration by XML declaration, you need a Government Gateway user ID and password. If you do not have a user ID, you can create one the first time you register. If you choose this method you’ll also need:

a CHIEF-compatible software package (EDIFACT), including an XML wrapper

an HTTPS internet connection (this is a more secure connection than HTTP)

COMMUNITY SYSTEM PROVIDERS

Community Systems Providers run the major inventory-controlled ports around the UK. You can access the export system indirectly through a Community Systems Provider using your own software or software provided by an independent software company.

Freight forwarders buy annual badges to their systems and charge exporters a fee for entering goods for export on their behalf. Customs do not charge for use of their systems and any charges are set by the freight forwarders direct.

See: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/800274/Trade_commercial_contacts.pdf

Please note: Full guidance can be found at https://www.gov.uk/prepare-to-export-from-great-britain-from-january-2021.

Category

[joelchristina26]

IMPORTING GOODS FROM THE EU TO GREAT BRITAIN FROM 1 JANUARY 2021

shaikh

January 25, 2021

The process for importing goods from the EU has changed. Businesses in Great Britain need to complete the following actions to continue importing from EU countries from 1 January 2021.

DECLARING GOODS FROM 1 JANUARY 2021

From 1 January 2021, you will make customs declarations when you import goods from the EU. These rules currently apply to importing goods from the rest of the world, including Switzerland, Norway, Iceland and Liechtenstein.

You can make the declarations yourself or hire someone else such as a courier, freight forwarder or customs agent.

HIRING A PERSON OR BUSINESS TO DEAL WITH CUSTOMS FOR YOU

You can hire a person or business to deal with customs for you, such as:

freight forwarders

customs agents or brokers

fast parcel operators

What they can do for you (and who will be liable) depends on:

the services they provide

what you want them to do

the commercial agreement you have with them

From 1 January 2021 they will need to be established in Great Britain or Northern Ireland.

FREIGHT FORWARDERS

Freight forwarders move goods around the world for importers.

A freight forwarder will arrange clearing your goods through customs. They will have software to communicate with HMRC’s systems. You can find out how to use a freight forwarder on the British International Freight Association and Institute of Export websites.

See: https://www.bifa.org/home

See: https://www.export.org.uk/

CUSTOMS AGENT OR BROKER

Customs agents and brokers help your goods clear through customs. You can hire a customs agent or broker to act as a:

direct representative

indirect representative

You can search these out on the internet.

Examples are: HansenMac:  https://hansenmac.com/

Typically they will:

Check the classification and valuation of your goods, and making sure you use the right commodity codes

Liaise with government agencies and customs authorities on your behalf

Advise on any necessary licenses for import of restricted or hazardous goods

Prepare and submit documents which have to be filed to clear customs processes

Help arrange correct payment of import duties and VAT as necessary

See: https://smallbusiness.co.uk/customs-brokers-2544117/

Further Information can also be found at UK Import Services Ltd: https://www.ukimports.org/services/import/customs-clearance/customs-clearance-broker-agent-information.php

FAST PARCEL OPERATORS

Fast parcel operators transport documents, parcels and freight across the world in a specific time frame. They can deal with customs for you, as part of their delivery.

See: https://www.gov.uk/guidance/international-trade-fast-parcel-operators

HMRC list of customs agents and fast parcel operators can be found at: https://www.gov.uk/guidance/list-of-customs-agents-and-fast-parcel-operators?utm_source=c531715c-739b-46aa-a269-5c5ece94f2e6&utm_medium=email&utm_campaign=govuk-notifications&utm_content=daily

[joelchristina26]

IMPORTING GOODS BY POST

(FROM THE EU INTO GREAT BRITAIN) FROM 1 JANUARY 2021

The Government has issued guidance on importing goods from the EU to Great Britain from 1 January 2021.

See:  https://www.gov.uk/prepare-to-import-to-great-britain-from-january-2021

The process for importing goods from the EU has changed. Businesses in Great Britain need to complete the following actions to continue importing from EU countries from 1 January 2021.

Great Britain (GB) is England, Wales and Scotland.

Guidance on moving goods into, out of and through Northern Ireland can be seen here: https://www.gov.uk/government/collections/moving-goods-into-out-of-or-through-northern-ireland-from-1-january-2021

The GB guidance covers:

NOTICE 144: TRADE IMPORTS BY POST HOW TO COMPLETE CUSTOMS DOCUMENTS

This notice is for postal importers of trade consignments who have to make a declaration on a Single Administrative Document (SAD).

This notice is intended to give general guidance to postal importers of trade consignments for which a declaration (entry) on a SAD is required. Further information on the completion of SAD forms is contained in the Integrated Tariff of the United Kingdom (the Tariff).

This notice is not the law and does not change the law.

IMPORT DECLARATION

All goods arriving in the United Kingdom by post from any country outside the EU must be declared to HMRC. In most cases, this means the sender making a Customs declaration on a form which is attached to the package. However, certain goods must be declared on a SAD – this is a UK and EU form used to legally declare imported goods to Customs also known as an import entry.

In the UK, the SAD is also known as Form C88. The specific version for postal imports is Form C88A.

WHEN IS A DECLARATION ON SAD REQUIRED?

A full import declaration on a SAD is required for all postal imports exceeding £750 (1,000 Euros) declared to home use and free circulation. For imports declared to one of the special procedures (that is, temporary admission, customs warehousing, inward processing and end use) a full customs declaration (SAD) is required to be submitted to CHIEF (Customs Handling of Import and Export Freight) in some cases (including where an “authorisation by declaration” (formerly known as a “simplified” authorisation) is used. The submission of the declaration to CHIEF allows for the guarantee (which is new requirement under the Union Customs Code) to be taken where necessary. A SAD is also required for returned goods relief over £600.”

WHAT FORM DO I USE TO DECLARE (ENTER) TRADE IMPORTS BY POST?

The SAD for postal imports is form C88A. You must use this when declaring your goods to HMRC. They will send you a copy to complete and return. Another form, C87 Notice of Arrival of Goods by Post also accompanies the SAD. This advises you that the goods have arrived in the UK but cannot be delivered until you complete and return the SAD form to HMRC. It also gives a Customs reference number associated with your package. Please quote this number if you need to speak to HMRC about your package.

Use one SAD for goods covered by each Commodity code. Additional forms can be obtained by contacting HMRC at the postal depot where your package is being held.

Guidance on completion of the SAD is covered on the webpage outlined above.

If you have a question about Excise or Customs Duty use the webpage above or:

Telephone: 0300 200 3700.

The address for questions by post is:

HM Revenue and Customs

EEC

10th Floor SW

Alexander House

Victoria Avenue

Southend-on-Sea

Essex

SS99 1AA

APPLY TO IMPORT MULTIPLE LOW VALUE PARCELS ON ONE DECLARATION FROM JANUARY 1 2021

You can use the bulk import reduced data set to declare one or more low value parcels in a single import declaration when you import goods to Great Britain.

If you have free circulation procedure goods contained within one or more postal packets, you may be able to use this process where:

each postal packet is sent from a country or territory outside the UK to a recipient in Great Britain

at the time of import, each postal packet contains goods with a relief from import duty available to the recipient of the goods

the postal packets are imported in such manner as may be specified in a notice published by HMRC

the total value of each postal packet imported is £135 or less

the VAT for each postal packet is subject to UK supply VAT, rather than import VAT

A postal packet is where goods are contained in:

a letter

a parcel

a packet

another article transmissible by post

If you are already using low value bulking of imports or have used low value bulking of imports, you still may need to apply for authorisation for the bulk import reduced data set.

HMRC will check your records and tell you after 1 October 2020 if you need to apply for authorisation.

To become authorised to make these bulk declarations, you will need to:

be established in the UK

have a good customs compliance record, including VAT Returns and duty deferments

show how you’ll identify and report any errors found after you’ve submitted your final bulked declaration, where applicable

carry out declaration procedures to a professional standard

have procedures in place to make sure you do not import prohibited goods

have licences for any restricted goods

have procedures in place to manage customs declarations

You may also need to apply for import licences and certificates for some goods you import.

Applications advice can be seen here: https://www.gov.uk/guidance/apply-to-import-multiple-low-value-parcels-on-one-declaration-from-1-january-2021

After you have applied HMRC will send a letter telling you if your application has been successful. It will also set out the conditions of the authorisation, such as how you:

make declarations

keep records

tell HMRC about any issues or errors

You also will get an authorisation number that you can use on your declarations in the Customs Handling of Import and Export Freight (CHIEF) system.

Once you are authorised, you must:

maintain complete and accurate records for 4 years for import and export purposes

maintain complete and accurate records for 6 years for VAT purposes

follow the conditions set out in the authorisation letter

[joelchristina26]

New lockdown grants announced

[joelchristina26]

CIS CHANGES –TRIPLE WHAMMY TAX

shaikh

November 23, 2020

Some more pertinent news for our clients in the construction industry , worth reading and making a note, as ever we are here to advise and to keep you ahead of the legislation

The construction industry is facing a triple whammy of tax changes in 2021as below:

VAT domestic reverse charge on 1 March,

off-payroll ( IR35) — not much clarity, and we are still waiting for the details, and

CIS reforms on 6 April.

Some of the provisions are not very clear and we will keep you informed as more information come to light as to how it will be implemented in practice , later changes may affect sub-contractor companies who claim their tax refund through RTI, and large businesses who could be classified as deemed contractors as they undertake more than £3 million of construction expenditure within 12 months.

There will also be new penalties for suppling false information to HMRC when applying for gross payment status or CIS registered status. This penalty will have a wide scope as it can be applied to any person who influences another to provide false information

This measure makes four changes to the CIS rules:

1 CIS set-off amendment power

.Some sub-contractor companies are entitled to set CIS deductions suffered in-year against their employer liabilities as provided by section 62(3) FA04 and regulation 56 S.I. 2005/2045. Where, upon challenge from HMRC, the sub-contractor employer cannot provide satisfactory evidence to support the CIS deductions claimed, and when asked the employer does not amend the CIS entry on their EPS within a certain timeframe, HMRC will instead amend the CIS deduction figure claimed on an EPS. The HMRC amendment will match the CIS deductions sum supported by any evidence held by or provided to HMRC.

HMRC will remove the claim altogether where there is no evidence of any CIS deductions in respect of that company or where the employer is not entitled to set-off in this way. The employer liabilities will be recalculated following the amendment. Where HMRC has to amend the CIS credit claimed on an EPS, the employer may also be prevented from making further CIS set-offs in the same tax year. HMRC’s new powers to amend set-off claims and prevent further set-off claims will be decisions subject to review and appeal, unless the claimant is not a sub-contractor company suffering deductions under the CIS. The new powers will be contained in amendments to section 62 FA04, and the operative detail will be contained in regulations by way of amendments to S.I. 2005/2045.

2.Cost of materials

The current rule regarding the cost of materials to be taken into account by a contractor when operating the CIS on a payment to a sub-contractor is set out at section 61(1) FA04. This provision must be read with the definitions of a “construction contract” at section 57 FA04 and of a “contract payment” at section 60 FA04. The newly substituted provisions of section 61 FA04 will clarify that, on making a contract payment to a sub-contractor, the contractor must deduct a sum from the payment which is equal to the relevant percentage of the net payment. In calculating the net payment, the contractor must work out the amount of the contract payment less deductible materials costs. A materials cost will only be deductible if it represents the direct cost of materials purchased by a sub-contractor in respect of that particular contract. The change to these provisions will ensure that it is clear that only the sub-contractor directly purchasing materials to fulfil their own contract with their contractor is entitled to a reduction to account for materials costs from the gross contract payment before the CIS deduction is calculated.

3.Deemed contractors

Section 59 FA04 sets out the rules for bringing deemed contractors into the CIS. The general rule to determine whether a non-construction business has to operate the CIS is found at section 59(1)(l) FA04. It requires a turnover threshold for expenditure on construction operations to be met, and that the business reviews this expenditure at the end of each period of account. If average annual expenditure on construction operations exceeds £1 million in each of the last 3 years, the business has to operate CIS on any construction expenditure from the start of the next period of account. When average expenditure is less than £1 million in each of three successive years the business no longer has to operate the CIS on construction expenditure: see section 59(3) FA04. The new rules will require a business to monitor construction expenditure more regularly. When the cumulative expenditure on construction operations exceeds £3million within the previous 12 month period, the business will have to register for the CIS as a contractor (if not already registered) and begin operating the CIS on their next payment to a sub-contractor for construction operations. Deemed contractors will be able to stop operating the CIS when expenditure on construction operations falls below £3m within the previous 12 month period, or when no further payments on construction operations (including retention or management/administration payments) are expected to be made under that or any other construction contract.

CIS registration penalty

HMRC can penalise a person for providing false information when registering for payment under deduction under the CIS or for GPS (section 72 FA04). This penalty applies only to the individual or business to whom the registration applies. The scope of this penalty will be expanded to apply to a wider group of individuals or companies who are able to exercise influence or control over a person who is registering for the CIS, this will include agents, directors, company secretaries, or anyone HMRC believes is in a position to exercise influence and control over the business and/or the person making the CIS registration.

Such persons will be liable to a penalty in two circumstances:

·         where they themselves make a false statement or furnish a false document for the purpose of enabling another individual or business to be registered or

·         where they encourage an individual or business to make a false statement or furnish a false document for the purpose of enabling themselves to be registered for the CIS

These changes are designed to tackle abuse of the CIS rules, ensuring HMRC can act quickly where the rules are being broken and so level the playing field for all those operating within construction and ensure the CIS applies fairly to everyone liable. The clarification to the cost of materials provision will remove scope for different interpretations of the existing rule, and the deemed contractor changes are designed to prevent manipulation of the current rules so that a business can avoid operating the CIS. The measure will have effect from 6 April 2021.

We are here to help and are easy to find 01892 552696 or www.Shaikhandcoaccountants.com,With little time and effort, we will  help you pave your way to success, in a style that suits you and your business.We’ll keep you up-to-date on your business, so you never miss an opportunity to succeed.

Stay calm…live brilliantly…and do at least 3 important or kind things each day!

Disclaimer Notice

The information contained in this  article is for general information purposes only and does not constitute advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that professional advise should be taken from a suitably qualified expert before undertaking any action.

[joelchristina26]

VAT-change after we leave the EU on 1st January 2021

shaikh

November 22, 2020

With the COVID-19 situation at the forefront and stealing the headlines , there are other matters which business owners  need to think about especially after the Uk’s exit in the new year from the EEC, the below is one area which needed explaining so here is one, I will be writing again and highlighting other relevant subjects in due course

A number of clients will continue to supplying various kinds of digital /electronically services to businesses and consumers in the EU. Their activities include the supply of downloadable software and Apps, and access to information, photo or videos held online. They currently use the VAT Mini One Stop Shop (VAT MOSS) via their UK VAT registration, to account for VAT on the sales to EU Consumers.

How is this going to change after we leave the EU on 1st January 2021

The VAT MOSS simplified system has been in place since 2015 for taxable persons to declare and pay VAT on business-to-consumer (B2C) supplies of telecommunications, broadcasting and electronic (TBE) services in the EU. There are two MOSS Schemes:

Union Scheme for EU based suppliers; and

Non-Union Scheme for Suppliers based outside the EU.

From 1st January 2021, when the transitional period ends for UK leaving the EU, most UK businesses will be required use the Non-Union scheme to account for VAT on TBE supplies to EU consumers.

Taxable persons who do not have a business establishment or a fixed establishment in the EU will be required to register in an EU Member State of their choice, and will be allocated an EU VAT Number ( in the format EUxxxyyyyyz).

Those UK Businesses/taxable persons who do have a fixed establishment in the EU will be able to use an existing VAT registration, or apply for a new VAT registration, in the Member State in which they are established to account for VAT on supplies to EU consumers via the Union Scheme . Their MOSS Identification VAT Number will be the same as the associated domestic VAT number.

If they have fixed establishments in more than one Member State, a taxable person can choose the one in which they wish to be identified for Union MOSS. Once that choice has been made, they are bound by that decision for the calendar year in which the decision is made, and the following two calendar years.

Information on the Union and Non-Union MOSS Schemes can be found on the European Commission Europa Website:

https://ec.europa.eu/taxation_customs/business/vat/telecommunications-broadcasting-electronic-services/

From 1st July 2021, as part of their drive to modernise VAT for cross border e-commerce the Non Union scheme is being extended to apply to all cross- border B2C supplies of services which are deemed to take place in a member state under the current place of supply rules. The place of supply rules themselves are not changing, this is a simplification. If a supplier opts to use the Non-Union scheme, they must use the scheme to declare and pay VAT for all their B2C supplies of services in the EU, these supplies should not be declared through separate local registrations.

An explanatory guidance note provides the following non exhaustive list of examples of B2C services which will fall to be reported under the Non-Union Scheme:

• Accommodation services carried out by non-established taxable persons, • Admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events, such as fairs and exhibitions, • Transport services, • Services of valuation and work on movable tangible property, • Ancillary transport activities such as loading, unloading, handling or similar activities, • Services connected to immovable property, • Hiring of means of transport, • Supply of restaurant and catering services for consumption on board ships, aircraft or trains etc.

Two helpful examples are also provided in the explanatory note as follows:

“Example 1: A supplier not established in the EU is carrying out services connected with immovable property (e.g. renovation works) located in Germany, in France and in Hungary to customers in those Member States. The same supplier is registered for VAT in Germany for other types of supplies (e.g. B2B supplies of goods). The supplier chooses to use the non-Union scheme in France (Member State of identification). He therefore has to declare and pay VAT on all supplies of services falling under the special scheme via the OSS in France. He cannot choose to declare the supplies of these services related to immovable property in Germany via the German VAT return. Other supplies (the B2B supplies of goods) in Germany, which do not fall under the special scheme will have to be declared via the German domestic VAT return. He can deduct any German VAT incurred by him through the German domestic VAT return. For any French or Hungarian VAT incurred by him, he will need to make a VAT refund request under the 13th Directive to the respective Member State tax authority.

Example 2: If the same supplier chooses to register for OSS in Germany, he has to declare and pay VAT on all the supplies of services falling under the special scheme via the OSS in Germany. Other supplies in Germany (e.g. B2B supplies of goods), which do not fall under the OSS will have to be declared via the German domestic VAT return. He can deduct any German VAT incurred by him through that domestic VAT return. For any French or Hungarian VAT incurred by him, he will need to make a VAT refund request under the 13th Directive to the respective Member State tax authority.”

From 1st July 2021 the Union Scheme will also be extended to apply to all types of B2C Services and distance sales of goods, and the distance sales thresholds will be abolished.

Full information on these changes is provided on the Europa Website.

A summary of the changes and the implementation calendar can be found in “Modernising VAT for cross-border e-commerce” at:

https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en

The detailed explanatory notes can be found at:

https://ec.europa.eu/taxation_customs/sites/taxation/files/vatecommerceexplanatory_notes_30092020.pdf

As always we are easy to contact  on 01892 552696 or www.Shaikhandcoaccountants.com for any help

Disclaimer Notice

The information contained in this  article is for general information purposes only and does not constitute advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that professional advise should be taken from a suitably qualified expert before undertaking any action.

[joelchristina26]

VAT on services post 31 December 2020

shaikh

November 22, 2020

Finally, one general point on VAT post Brexit, but a very important one

VAT on services Post Brexit

The VAT rules that determine whether the supply of a service is outside the scope of VAT will change at 12.01 pm on 31 December 2020, as the transition period for the UK leaving the EU comes to an end.

From that point the UK is no longer treated as being part of the EU so the VAT treatment of services sold to customers based outside of the UK, will be the same as currently applies to customers in the “rest of the world” (ie non-EU).

Most business to business customers (B2B) will be outside the scope of VAT, because the place of supply is where the customer is based. The place of supply rules are explained in VAT Notice 741A, which has not yet been updated for transactions in 2021 and beyond.

The main difference for UK suppliers will be for services supplied to non-business customers (B2C) in the EU, particularly for those services in the list in para 12.2 of VAT Notice 741A. This includes most professional services including those of lawyers and accountants.

For example: a VAT registered UK accountant who completes personal tax returns for an individual resident in Spain must currently charge that customer 20% VAT. From 1 January 2021 the UK accountant will not have to charge UK VAT to the Spanish resident for those services, and won’t have to register for VAT in Spain either.

However, the UK business will have to abide by the e-commerce rules for their particular trade sector, which are changing from 1 January 2021. I have prepared and issued a separate article addressing the exact topic, For example, providers of online services need to look at the local rules for each EU country where they operate, which may include licensing requirements. Local legal advice will be required.

As we chalk off yet another extraordinary week in the history of humanity, do stay hopeful and safe and look after each other, Stay calm, stay safe…stay well and remember, ‘JOY’ is contagious too!

Disclaimer Notice

The information contained in this  article is for general information purposes only and does not constitute advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that professional advise should be taken from a suitably qualified expert before undertaking any action.

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Changes to the Stamp Duty Land Tax (SDLT) rules and Multiple Dwellings relief

There has been a number of changes to the Stamp Duty Land Tax  (SDLT) rules, also given that with various incentives available for limited period, its only right that we visit some of the rules especially relating to Multiple Dwellings, which could result in substantial tax savings

Let us assume  a scenario where a client is purchasing three residential investment properties from the same seller, the client must pay Stamp Duty Land Tax at the “higher rates” for additional dwellings (supplementary 3%).

However, Multiple Dwellings relief may be available on the purchase following the temporary rate changes introduced by the Chancellor in July

Let us  use for illustration purposes use property values as  £530,000, £325,000, and £290,000 respectively, let us also assume that all these properties will be  let-out commercially to unconnected parties.

The Chancellor’s temporary initial rate band of £500,000 applies to transactions taking place between 8th July 2020 and 31st March 2021. HMRC have confirmed their view that this will also apply to transactions liable to the higher-rates.

A claim for Multiple Dwellings Relief provides for the SDLT calculation to be based on the average price for each property, instead of a single computation based on the combined price. The calculation based on average price, rather than the combined price, may result in a lower overall SDLT charge with part of the total consideration falling into lower tax bands.

Temporary rates and bands currently in force are as follows:

Up to £500,000

3%

The next £425,000 (consideration between £500,001 and £925,000)

8%

The next £575,000 (consideration between £925,001 and £1.5 million)

13%

The remaining consideration (over £1.5 million)

15%

In the illustration above, the “default” SDLT calculation, without multiple dwellings relief, would be as follows:

Total Consideration £1,145,000

First £500,000 @3% =

£15,000

Next £425,000 @ 8% =

£34,000

Balance of £220,000 @ 13% =

£28,600

Total SDLT

£77,600

A calculation using Multiple Dwellings Relief together with the temporary reduced rate, would be as follows:

Total consideration £1,145,000 / 3 = £381,666 @ 3% = £11,449 SDLT payable in respect of each property, total SDLT payable therefore £34,347, compared to £77,600 without the claim for Multiple Dwellings Relief a net SDLT saving of £43,253

The net SDLT saving of £43,253 results from £645,000 of the total consideration, chargeable at a combination of 8% and 13% in the first calculation above, becoming chargeable at 3% with the benefit of multiple dwellings relief.

Talk to us if you are considering property transactions, we are easy to contact www.shaikhandcoaccountants.com, or 01892 552696

Stay calm, stay safe…stay well and remember, ‘JOY’ is contagious too!

Disclaimer Notice

The information contained in this article is for general information purposes only and does not constitute advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that pro