Thursday, 13 May 2021

HMRC Guidance on moving goods between GB and the EU

HMRC have recently sent letters to VAT-registered businesses in Great Britain trading with the EU, or the EU and the rest of the world.

They explain what businesses need to do to comply with the new rules and processes for moving goods between Great Britain and the EU, including:

making sure they have a UK Economic Operator Registration and Identification (EORI) number
ensuring they are ready to make customs declarations
checking if their goods are eligible for the preferential zero duty rates
preparing for the end of staged import controls on 1 January 2022

Wednesday, 12 May 2021

Making Tax Digital (MTD) for VAT – end of “soft landing”

MTD for VAT currently applies to VAT registered businesses with taxable turnover in excess of £85,000, the current VAT registration threshold. From 1 April 2022, MTD for VAT is being extended to all VAT registered businesses.

HMRC have updated their guidance in VAT Notice 700/22 regarding MTD for VAT:

This publication is essential reading for all VAT registered business as some of the content has the force of law.

The notice:

explains the digital records businesses must keep, and ways to record transactions digitally in certain special circumstances
explains what counts as compatible software, and when software programs do and do not need to be digitally linked where a combination of programs is used
gives examples of when digital links are required

Section 4 alerts businesses to the end of the “soft landing” period:

HMRC gave a period of time (known as the soft landing period) during the first 2 years of Making Tax Digital, to help businesses put digital links in place between all parts of their functional compatible software. Businesses were not required to have digital links in place until their first VAT Return period, starting on or after 1 April 2021.

During the soft landing period, if a digital link was not established, HMRC accepted the use of ‘cut and paste’ or ‘copy and paste’ as being digital links.

The soft landing period has now ended.

Tuesday, 11 May 2021

Business New Update

This week we learnt that more than 35 million people have had at least one jab and following the recent elections, Prime Minister Boris Johnson, has called for a Covid recovery summit.  In letters sent to regional leaders, the Prime Minister highlighted the Covid vaccine rollout as an example of "Team UK in action", with the UK procuring doses at scale, and he urged them to continue the "cooperative spirit".

There is more unease over the India Covid variant in the UK which has been made a variant of concern. Scientists also believe it is at least as transmissible as the variant detected in Kent last year. The current vaccines used in the UK are thought to offer some protection against variants but can never completely stop all infections, particularly among the vulnerable or elderly. News of a booster jab, probably from September for the over 50’s is awaited.

Bank of England latest Monetary Policy Report

The latest Bank of England (BOE) monetary policy report published last week set out their economic analysis and inflation projections. Their initial analysis that Covid has hit spending, incomes and jobs in the UK, stating the Pandemic has put a big strain on UK businesses’ cash flow and is threatening the livelihoods of many people. This analysis is not unsurprising because all regions of the UK are still in some form of lockdown and have been for some time. The BOE then confirm vaccines are now helping the UK economy recover rapidly as more people are vaccinated, restrictions to control the spread of the virus are being lifted. They also comment that inflation is 0.7%, but they expect it to rise to around the 2% target this year as people may also become more confident about spending and as the high street opens back up. Interest rates remain at 0.1% to help keep inflation within target.

The good news in the BOE report!

The good news is the BOE predicts the economy to expand by 7.25% this year, with Government spending helping to limit job losses.  There is also the good news that fewer jobs are being lost and earlier predictions of 7.75% unemployment will not happen, and they predict around 5.5% later this year.

The Office for National Statistics (ONS) business impacts and insights report

The ONS latest figures show the percentage of businesses currently trading has increased from 77% in early April to 83% in late April 2021. This is now at a similar level to that seen in mid-December 2020 (Business Insights and Conditions Survey (BICS)).

In the period ending 3 May 2021, the proportion of working adults that had travelled to work (both exclusively and in combination with working from home) in the last seven days was 60%. This proportion has been gradually increasing since mid-February (44% in the period 10 to 14 February 2021).

Estimates for UK seated dinner reservations on Saturday 1 May 2021 were at 71% of the level seen on the same Saturday of 2019, up 9 percentage points from the equivalent figure in the previous week. This follows the reopening of restaurants, caf├ęs and bars in Scotland and Wales on 26 April 2021, and Northern Ireland on 30 April 2021.

Are you ready for the “Bounce back”?

All of us must agree that the “Bounce back” in the economy is good news and many of our clients are reporting increased activity as the lockdown eases and economy returns to somewhere near normal over the next few months. Of course there are uncertainties about new virus variants, but all the indicators are pointing to a summer recovery, with the economy being repaired by the end of this year.

Please talk to us about planning for the future, we are here to help drive your business forward!

Monday, 10 May 2021

Making Tax Digital Extended to More Businesses

Currently only VAT registered businesses making taxable supplies in excess of the £85,000 VAT registration threshold are mandated to comply with Making Tax Digital (MTD) rules. Those rules require the business to keep digital business records and send VAT returns using MTD-compatible software.

MTD for VAT is now being rolled out to all VAT registered businesses from April 2022 which may cause some traders who are VAT registered but below the threshold to consider deregistering to avoid having to comply with MTD for VAT. If you decide to do so you will need to complete Form VAT7 and account for output VAT on the market value of stock and assets still owned at the date of deregistration. This is where input VAT has been reclaimed on those assets.

There is however a £1,000 de-minimis which means that output VAT does not need to be accounted for where the combined market value of the assets is less than £6,000.

Unfortunately, deregistering for VAT will not necessarily sidestep MTD as the requirement to keep business records digitally will be introduced for income tax from April 2023. From then MTD for income tax will apply to businesses with gross income in excess of £10,000 a year which will include property landlords as well as traders and professionals.

Friday, 7 May 2021

7th May 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

New scheme to give people in problem debt breathing space launched
Beware Bogus HMRC Phishing Scams
The end of the landline?
Employees can continue to claim tax relief if working from home

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a good weekend.

Stay safe and well.



Steven Hillman
BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

New scheme to give people in problem debt breathing space launched

Hundreds of thousands of people struggling with debt problems will be supported through a new debt respite scheme that was announced 4 May 2021. Around 700,000 people struggling with problem debt to benefit from Breathing Space this year as the scheme will give those facing financial difficulties 60 days to get finances back on track – without debts piling up, worrying letters or enforcement action.

People will also have access to professional debt advice, with stronger protections for people in mental health crisis treatment. 

Under the scheme, people will be given legal protections from their creditors for 60 days, with most interest and penalty charges frozen, and enforcement action halted. They will also receive professional debt advice to design a plan which helps to get their finances back on track.

Recognising the link between problem debt and mental health issues, these protections will be available for people in mental health crisis treatment – for the full duration of their crisis treatment plus another 30 days.

People across England and Wales who are struggling to repay their debts could be eligible, and the Government expects 700,000 people to benefit in the first year of the scheme.

See: New scheme to give people in problem debt breathing space launched - GOV.UK (

Thursday, 6 May 2021

Beware Bogus HMRC Phishing Scams

HMRC is aware of a phishing campaign telling customers they can claim for the fourth Self-Employment Income Support Scheme (SEISS) grant as support during the coronavirus pandemic.

Do not reply to the email and do not open any links in the message. The email has been issued in various formats like the one below:

See here for an examples of the scams: Examples of HMRC related phishing emails, suspicious phone calls and texts - GOV.UK (

There are also text scams:

‘Due to the new lockdown support plan’ SMS

HMRC is aware of coronavirus text scams telling customers they are entitled to funding due to the new lockdown support plan. Do not reply to the text and do not open any links in the message.

‘COVID-19 refund’ SMS

Report suspicious HMRC emails, text messages and phone calls here: Report suspicious HMRC emails, text messages and phone calls - GOV.UK (