29th October 2021 – Hillmans Weekly Update

29th October 2021 – Hillmans Weekly Update:

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

• Autumn Budget and Spending Review
• Coronavirus: Film and TV Production Restart Scheme
• Working Tax Credit customers must report changes to working hours
• Working in Europe?
• Tell HMRC about an option to tax land and buildings

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 great weekend.

Stay safe and well.

Cheers,

Steve

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

Autumn Budget and Spending Review

The Chancellor of the Exchequer presented his Autumn Budget and Spending Review to Parliament on Wednesday 27 October 2021. 

We have summarised the key points from the budget below:

• National Living Wage increases to £9.50 from April 2022
• Dividend tax increases from the 2022/23 tax year by 1.25%
• Capital gains tax reporting period has increased from 30 days to 60 days as well as the payment. This comes into effect from the 27th October 2021
• Employees and Employers NI increases by 1.25%
• Personal allowance frozen until April 2026 at £12,570
• Corporation tax increasing to 25% from April 2023 for profits over £250K, then a sliding scale, profits below £50K will remain at 19%
• MTD has been delayed until April 2024 for sole-traders and landlords with income over £10K

Coronavirus: Film and TV Production Restart Scheme

The Film and TV Production Restart Scheme makes direct compensation available to eligible pre-existing and new productions that incur costs caused by coronavirus-related losses, such as abandonment or filming delays from illnesses amongst the cast and crew.

Eligible productions will receive compensation for costs caused by coronavirus delays up to a value of 20 per cent of the production budget, with the abandonment of productions due to coronavirus to be covered up to 70 per cent of the production budget. There will be a total cap of £5 million on claims per production.

The funding is available to all productions made by companies where at least half of the production budget is spent in the UK.

You must make an application via the appointed third party administrator, Marsh Commercial.

You can download the claim form from their website. Once complete, email your form along with all supporting documentation to mailto: restartschemeclaims@marshcommercial.co.uk.

Future claims made under the scheme can be backdated to 28 July 2020.

The registration deadline for this scheme is 23:59 GMT on 30 April 2022, and claims will be able to be submitted up to 23:59 GMT on 30 September 2022 for losses incurred up until 23:59 GMT on 30 June 2022.

See: Film & TV Production Restart Scheme - Scheme Rules - GOV.UK (https://www.gov.uk/government/publications/film-tv-production-restart-scheme/film-tv-production-restart-scheme-draft-rules)

Working Tax Credit customers must report changes to working hours

HMRC is urging Working Tax Credit customers to check if they need to update their working hours if these have reduced as a result of coronavirus.

During the pandemic, Working Tax Credit customers have not needed to tell HMRC about temporary short-term reductions in their working hours as a result of coronavirus - for example if they were working fewer hours or were furloughed.

If a Working Tax Credit customer’s hours temporarily fell because of coronavirus, they have been treated as if they were working their normal hours.

Customers do not need to tell HMRC if they re-establish their normal working hours before 25 November 2021, but from then, they must do within the usual one-month window if they are not back to working their normal hours shown in their Working Tax Credit claim.

See: Working Tax Credit customers must report changes to working hours - GOV.UK (https://www.gov.uk/government/news/working-tax-credit-customers-must-report-changes-to-working-hours)

Working in Europe?

As travel returns to a more normal environment, the UK government has started a campaign to remind business travellers of the rules for travel to an EU country, Switzerland, Norway, Iceland or Liechtenstein.

As well as the actions all travellers need to take, there are extra actions if you are travelling for business. Business travel includes activities such as:

• travelling for meetings and conferences
• providing services (even with a charity)
• touring for art or music
• taking goods to sell

If you are travelling to an EU country, Switzerland, Norway, Iceland or Liechtenstein for less than 90 days in a 180-day period, you may be able to do some things without getting a visa or work permit, for example going to a business meeting. You may need a visa, work permit or other documentation if you are planning to stay for longer than 90 days in a 180-day period, or if you will be doing any of the following:

• transferring from the UK branch of a company to a branch in a different country (‘intra-corporate transfer’), even for a short period of time
• carrying out contracts to provide a service to a client in another country in which your employer has no presence
• providing services in another country as a self-employed person

Check the entry requirements and rules of the country you are visiting to find out if you need a visa or work permit. 

The government also gives advice on professional qualifications, earning money in the EU, insurance and taking goods and cash into the EU.

See: Visiting the EU, Switzerland, Norway, Iceland or Liechtenstein: Business travel: extra requirements - GOV.UK (https://www.gov.uk/visit-eu-switzerland-norway-iceland-liechtenstein/business-travel-extra-requirements)

Tell HMRC about an option to tax land and buildings

To help businesses during COVID-19 HMRC made a temporary change to the time limit for notifying an option. The change applied to decisions made between 15 February 2020 and 31 July 2021. This temporary change ended on 31 July 2021.

HMRC also allowed options to be signed electronically subject to providing supplementary evidence. This change has now been made permanent.

Check the changes to the time limit and how you notify an option to tax land and buildings (https://www.gov.uk/guidance/changes-to-notifying-an-option-to-tax-land-and-buildings-during-coronavirus-covid-19).

Form VAT1614A has now been updated. You should only complete this form to notify HMRC of your decision to opt to tax land and or buildings.

See:  Tell HMRC about an option to tax land and buildings - GOV.UK (https://www.gov.uk/government/publications/vat-notification-of-an-option-to-tax-land-andor-buildings-vat1614a)

22nd October 2021 – Hillmans Weekly Update

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

• Self-Assessment: Paper submission deadline looming!
• Tax reporting rules for digital platforms
• New Directors’ Disqualification Regime to Directors of Dissolved Companies
• New Tax Checks to Renew Licences for Taxi, Private Hire and Scrap Metal Businesses

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 great weekend.

Stay safe and well.

Cheers,

Steve

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

Tax reporting rules for digital platforms

The UK Government is consulting on the implementation of the Organisation for Economic Co-operation and Development (OECD) Model Reporting Rules for Digital Platforms, which require digital platforms to report details of the income of sellers on their platform to the tax authority and also to the sellers.

From January 2023, these rules will require platforms to report information about the income of sellers providing goods and services to help sellers get their tax right and to enable HMRC to detect and tackle non-compliance.

The UK Government invites comments from digital platforms that facilitate the provision of services, such as taxi and private hire services, food delivery services, freelance work and letting of accommodation, as well as those that facilitate the sale of goods and transport rental. They also welcome views from organisations or bodies that represent platforms or businesses in the sharing or gig economy.

This consultation will also be of interest to individuals and companies who provide such services using digital platforms.

The consultation closes on 22 October 2021.

See: Reporting rules for digital platforms - GOV.UK (https://www.gov.uk/government/consultations/reporting-rules-for-digital-platforms)

New Tax Checks to Renew Licences for Taxi, Private Hire and Scrap Metal Businesses

From April 2022, the rules are changing for individuals, companies or any type of partnership applying for a licence for a:

• taxi driver
• private hire driver
• private hire vehicle operator
• scrap metal site
• scrap metal collector

In order to obtain or renew a licence the trader must carry out a tax check. This cannot be done by a tax agent or adviser on behalf of the business. The tax check will ask questions about the payment of tax that is due on income from the licensed trade.

After completion of the tax check the trader will be given a 9-character tax check code which will need to be provided to the licensing authority to support the application.

Businesses affected will need to set up a Government Gateway user ID and password, if they do not already have one, in order to complete the tax check. Precise details of the tax check are yet to be published but it is likely to require that the trader is registered with HMRC.

See: Changes for taxi, private hire or scrap metal licence applications from April 2022 - GOV.UK (https://www.gov.uk/guidance/changes-for-taxi-private-hire-or-scrap-metal-licence-applications-from-april-2022)

Self-Assessment: Paper submission deadline looming!

HM Revenue and Customs (HMRC) is reminding Self-Assessment tax payers to check that they have the correct information in order to complete their tax return.

This year, tax payers will also have to declare if they received any grants or payments from COVID-19 support schemes up to 5 April 2021 as these are taxable, including:

• Self-Employment Income Support Scheme (SEISS)
• Coronavirus Job Retention Scheme (CJRS)
• Other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme

The deadline for 2020/21 tax returns is:

• 31 October 2021 for those completed on paper forms
• 31 January 2022 for online returns

You can file your return before the January deadline but still have until 31 January 2022 to pay.

Please contact us about helping you file your 2020/21 return before the deadline or if you have any questions about grants or payments received. 

New Directors’ Disqualification Regime to Directors of Dissolved Companies

The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, currently going through Parliament, contains implications for directors of dissolved companies.

The main provisions of the Bill are that the Insolvency Service will be able to retrospectively:

• investigate the conduct of directors of dissolved companies; and
• bring disqualification proceedings against them under the Company Directors Disqualification Act (CDDA) 1986.

Where a Court is satisfied that the conduct of a director of a dissolved company renders that director unfit to be concerned in the management of a company, penalties could include:

• disqualification from acting as a director for a period of two to 15 years; and
• the payment of compensation to creditors.

The breach of a director’s disqualification order can lead to imprisonment for up to two years and/or substantial fines.

In the notes to the bill the three main complaints about the conduct of former directors are detailed:

• allowing or causing a company to be dissolved, effectively shedding its liabilities, with a new company continuing its business, which is sometimes known as phoenix from the ashes scenarios or “phoenixism”;
• using the dissolution process as a short-circuit to avoid the costs and implications of a formal insolvency process; and
• the avoidance of investigation of conduct under the Company Directors Disqualification Act (CDDA) 1986.

The reason for the retrospective nature of this bill is the UK governments concern that company directors who have taken out Government-backed loans for support during the coronavirus pandemic may seek to dissolve the company rather than repay the loan.

All company directors should be aware of this new legislation and if you have any queries about loans taken during the Pandemic please contact us for a confidential discussion.   

See: https://bills.parliament.uk/bills/2861/publications

15th October 2021 – Hillmans Weekly Update

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

• The best way to predict the future is to create it
• Check which expenses are taxable if your employee works from home due to coronavirus
• New Export Support Service Launched
• Pump Priming Grants for Horizon Europe proposals

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 great weekend.

Stay safe and well.

Cheers,

Steve

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

New Export Support Service Launched

UK businesses exporting to Europe can now access one-to-one advice via the new Export Support Service (ESS).

The Export Support Service is a new government helpline and online service where all UK businesses can get answers to practical questions about exporting to Europe.

It gives access to cross-government information and support in one place.

All UK businesses can use this free service, no matter the size of your business or in which part of the UK you are based. The Department for International Trade (DIT) will continue to work with businesses and business representative groups from all sectors, in all parts of the UK, to help make the service as useful as possible for businesses.

You can access the Export Support Service online or by calling 0300 303 8955 where you will be put in touch with a member of the export support team. 

See: Ask the export support team a question - (https://www.gov.uk/ask-export-support-team)

Check which expenses are taxable if your employee works from home due to coronavirus

The HMRC guidance has been recently updated to reflect the fact that employees can no longer be furloughed using the Coronavirus Job Retention Scheme. The scheme ended on 30 September 2021.

If any of your employees are working from home due to coronavirus (COVID-19), either because your workplace has closed, or they are following advice to self-isolate, then HMRC accepts there are non-taxable types of equipment, services or supply.

For example - if you provide a mobile phone and SIM card without a restriction on private use, limited to one per employee, this is non-taxable. 

Broadband - if your employee already pays for broadband, then no additional expenses can be claimed. If a broadband internet connection is needed to work from home and one was not already available, then the broadband fee can be reimbursed by you and is non-taxable. In this case, the broadband is provided for business and any private use must be limited.

Laptops, tablets, computers, and office supplies - if these are mainly used for business purposes and not significant private use, these are non-taxable.

Reimbursing expenses for office equipment your employee has bought - if your employee needs to buy home office equipment to allow them to work from home, they will need to discuss this with you in advance. If you reimburse your employee the actual costs of the purchase, then this is non-taxable provided there is no significant private use.

Employers can continue to pay their employees £6 a week to cover the additional expenses of working from home and the amount would be free of tax and national insurance. This is to cover the additional costs of electricity, heating and water whilst working from home. It has been confirmed that the amount may be paid regardless of the number of days that employees work from home.

HMRC guidance can be seen here: Check which expenses are taxable if your employee works from home due to coronavirus (COVID-19) - GOV.UK (https://www.gov.uk/guidance/check-which-expenses-are-taxable-if-your-employee-works-from-home-due-to-coronavirus-covid-19)

If you need to discuss employee expenses or loans or are looking to develop a more resilient employee expense policy for the future please talk to us and we will be delighted to assist you. 

The best way to predict the future is to create it

The latest Office for National Statistics (ONS) survey to June 2021 showed that the UK gross domestic product (GDP) is estimated to have increased by 5.5% in Quarter 2 (Apr to June) 2021, revised from the first estimate of a 4.8% increase.  However, the level of GDP is now 3.3% below where it was pre-pandemic at Quarter 4 (Oct to Dec) 2019, revised from the previous estimate of 4.4% below. The increase in GDP was expected as the UK moved out of lockdown, however, more worrying for businesses is the rise in inflation and therefore a possible rise in interest rates that accompanies growth in GDP.

The news is not that positive right now and the TV and the press are currently full of worrying stories about global bottlenecks and supply chain problems, energy bills rising, HGV drivers and staff shortages. We have also seen rising prices, queues at the petrol pumps and now a flatlining post Pandemic economy.   

The end of the stamp duty holiday, higher VAT in the hospitality industry and less generous universal credit payments mean the most immediate task facing the government  is to prevent the economy from going backwards over the coming months.

All the negativity in the press can lead to us feeling “out of control” and uncertain about in what direction we should take our business. We firmly believe in our clients and their aims, hopes and ambitions and in remaining positive, we also believe the best way to predict the future is to create it!

There is an old saying “A sailor without a destination will never get a favourable wind”.

It is easier to get to your destination with a plan. We all know this simple truth. If you are driving from A to B it helps to know where A is and the directions you need to take.

Planning ahead is the single most important exercise any business owner can do. If you have a vision of what you want your business to look like when it is “complete” then you are in a position to drive your business towards the vision and you can monitor how you are doing as you go along. If you do not have a plan then you could get blown around like “flotsam in the sea”, without any control.

If you agree it is hard to accomplish anything without a plan, let’s start thinking about how we can make it successfully through the coming winter and make our business more resilient to factors outside of our control. Here are our thoughts:       

1 Take time to review your personal objectives – the business is there to provide you with what you want from life, and this is the most important element of any plan.

2 Look at where the business is now, its strengths, weaknesses, opportunities and threats and get a clear understanding of its position in the marketplace, the competition, the systems and the way things are done and the improvements that could be made.

3 Focus on what the business is to look like when it is “complete” or running profitably and successfully. Then you can determine priorities – the big issues that need to be focussed on – this is the plan!

4 Write down the plan and define what it must achieve, and the actions needed. Monitor how it is doing towards the vision each month and what actions have been completed and what needs to be done to keep the business moving towards the plan.

5 Allocate responsibility for taking the actions.

6 Monitor, review and adjust regular activities to keep the business on track towards the plan.

It is also a good idea to look at where you are now and plan for a range of scenarios “good and bad” so that you can be flexible about the direction you should take. 

Please talk to us about helping you with forecasting and planning for the next few months. We have helped many clients with “what if” scenarios and their future planning.  

Pump Priming Grants for Horizon Europe proposals

Grants of up to £5,000 are now available to help UK businesses collaborate with partners in other countries to develop bids for Pillar 2 of Horizon Europe.

The funding, provided by the UK’s Department for Business, Energy & Industrial Strategy, aims to develop collaborative activity between UK and EU/associated countries’ entities. This activity should focus on Pillar 2 of Horizon Europe, which is Global Challenges and European Industrial Competitiveness.

The purpose of this call is not to implement the proposed projects that will be submitted to Horizon Europe, but to give the UK-based partners the resources needed to collaborate with EU organisations and stakeholders to further develop the idea and the market opportunities.

The funding can be used in a variety of ways, including feasibility studies, application advice and training, partnership building, and dedicated time to take forward an application.

Proposals are welcome:

• in all disciplines - engineering, natural sciences, medical sciences, humanities, and social sciences
• from research institutes and universities based in the UK and any other type of organisations eligible for Horizon Europe funding, including SMEs, charities and companies

The first wave of this call closes for submissions on 13 October 2021 at 17:00.

See: Horizon Europe Pump Priming Collaboration between UK and EU Partners | The British Academy https://www.thebritishacademy.ac.uk/funding/Horizon-Europe-Pump-Priming-Collaboration-between-UK-and-EU-Partners/

8th October 2021 – Hillmans Weekly Update

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

• Fuel pump crisis and the looming “challenging” winter
• Tips and Gratuities should go to staff not the employer
• HMRC Publish Guidance on New Penalty Regime for Late Returns
• Are you planning to use a Freeport to import or export your goods?

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 great weekend.

Stay safe and well.

Cheers,

Steve

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

Tips and Gratuities should go to staff not the employer

The Government is to make it illegal for companies not to pass on tips to their employees. This comes after some major restaurant chains were accused of keeping 10% of tips given to staff.

The Department for Business Energy and Industrial Strategy (BEIS) have announced that new legislation, to be introduced within a year, would help about two million people in the hospitality industry. An updated consultation response was published on 24 September:

See: Tipping, gratuities, cover and service charges consultation: government response (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1020132/tipping-consultation-government-response.pdf)

The current rules for taxing tips, gratuities and service charges are complex and, whilst all tips are taxable, national insurance does not currently apply where the payment is given directly to the staff member.

For current HMRC guidance on the taxation of tips, gratuities and service charges: See: Tips at work: Tips and tax - GOV.UK (https://www.gov.uk/tips-at-work/tips-and-tax)

Fuel pump crisis and the looming “challenging” winter

With panic buying at the pumps, the shortage of HGV drivers, and a looming winter energy crisis many of us are running our businesses in an ever increasing level of uncertainty.

If you are concerned about the future of your business then take some time to reflect on where you are and what could happen in the next few months. It is now vitally important for all businesses to plan ahead for a range of scenarios. Cash flow and business planning in these uncertain times may appear difficult but there are some practical steps you can take to minimise potential disruption to your business.

• Review your Budgets and set realistic and achievable targets for the remainder of 2021.
• If you have employees, get them involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues. 
• Review and flow chart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
• Put extra effort into making sure your relationships with your customers are solid.
• Review your list of products and services and eliminate those that are unprofitable or not core products/services.
• Review your prices and increase if necessary to account for the increasing costs of buying from suppliers and the increase in inflation (the Consumer Prices Index, CPI, rose by 3.2% in the 12 months to August 2021, up from 2.0% to July). 
• Pull everyone together and explain the business strategy and get their buy-in.

Please talk to us about cash flow planning and budgeting for the next few months, we can help with a template so you can do this yourself, or we can work together to produce estimates for a variety of scenarios. 

HMRC Publish Guidance on New Penalty Regime for Late Returns

The Finance Act 2021 introduced a new regime for late VAT returns that will apply to VAT periods commencing on or after 1 April 2022 and to other returns at a later date.

HMRC have now published detailed guidance on the new rules. The reforms come into effect:

• for VAT taxpayers from periods starting on or after 1 April 2022
• for taxpayers within MTD for Income Tax Self-Assessment (ITSA), from the tax year beginning 6 April 2024
• for all other ITSA taxpayers, from the tax year beginning 6 April 2025

The new regime will be a points-based system and will operate in a similar way to motoring penalties in that the points will elapse after a period of time depending on the regularity of the returns.

For details see: Penalties for late submission - https://www.gov.uk/government/publications/penalties-for-late-submission

Are you planning to use a Freeport to import or export your goods?

In the Spring 2021 Budget the Chancellor announced a number of areas to be designated as Freeports. Those areas would have a number of direct and indirect tax advantages for businesses located there.

Among those advantages is relief from customs duty and the ability to make simplified declarations. HMRC have now published guidance for businesses planning to take advantage of the new procedures.

Freeport customs sites (also known as a ‘free zone’) are secure customs zones where you can import or export goods inside the UK’s land border, but where special import or export rules apply.

If you choose to use a customs site to import or export goods, you may be able to:

• get relief from duties and import taxes
• use simplified declarations processes to reduce administrative burdens
• choose which rate of Customs Duty you use if processing the goods changes their classification

If your goods are purchased in the UK, you will continue to pay duties and import taxes using the normal UK rates.

If you are a business who wants to move goods into or out of a Freeport customs site, you will need to apply to use the Freeport customs special procedure (a single authorisation combined with easier declaration requirements) to import goods that are not controlled.

For more details see: Get your business ready to use a Freeport customs site - GOV.UK (https://www.gov.uk/guidance/get-your-business-ready-to-use-a-freeport-customs-site)

1st October 2021 – Hillmans Weekly Update

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

• Planning Actions Before Increase in National Insurance and Tax on Dividends
• Live Events Reinsurance Scheme
• Government Postpone Making Tax Digital for Income Tax to 2024/25
• End of temporary insolvency measures

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 great weekend.

Stay safe and well.

Cheers,

Steve

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