HMRC have recently updated their guidance on accounting for VAT on goods imported from outside the UK which, since Brexit, includes the European Union.
Businesses registered for VAT in the UK can account for import VAT on their VAT Return for goods imported into:
• Great Britain (England, Scotland and Wales) from anywhere outside the UK
• Northern Ireland from outside the UK and EU
Businesses can also account for import VAT for goods moved between Great Britain and Northern Ireland that are declared into a customs special procedure, when they are removed from that special procedure.
You do not need HMRC approval to account for import VAT on your VAT Return.
Accounting for import VAT on your VAT Return has significant cash flow benefits as you declare and recover import VAT on the same VAT Return, rather than having to pay it upfront when the goods are imported and recover it later.
For details see: Check when you can account for import VAT on your VAT Return - https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return
Thursday, 19 August 2021
Accounting for Import VAT on your VAT return
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
https://www.gov.uk/government/publications/letters-to-businesses-about-importing-and-exporting-goods-between-great-britain-and-the-eu
Tuesday, 23 February 2021
European Property Owners Face Higher Tax Bills
Now that the UK has finally left the EU some taxpayers will start to see additional tax costs. One example is where UK residents own holiday homes in EU countries that they rent out for part of the year.
Owners of EU rental properties may now be required to pay more tax in those countries, having previously benefited from a lower rate of tax for EU nationals. Those renting out Spanish properties for example will see the rate of tax they pay in Spain increase from 19% to 24%. There would be double tax credit relief for the overseas tax suffered against the UK tax liability on the rental income, but those who pay UK tax at 20% will see their overall tax bill increase as a result. The UK leaving the EU may also have the effect of increasing the amount of capital taxes and social security taxes payable by property owners.
The property tax rules vary from country to country, so contact us if you are likely to be affected by these changes.
Tuesday, 9 February 2021
VAT on purchases from the EU
Here is a quick reminder of the post Brexit VAT rules if you purchase goods from the EU either privately or as a business.
Before Brexit, if anyone purchased goods from the EU on an online platform (say Amazon or E-bay), VAT was paid at the rate charged by the country you purchased the item from. VAT would have been applied at the point of purchase and customers paid the price they saw advertised. In addition many EU businesses selling goods online were below the VAT threshold and there was no VAT charged.
Now all EU sellers have UK VAT charged automatically by online platforms that they use, and this is why some prices have increased by 20%. In addition any purchases from the EU over £135 will have VAT payable by the purchaser at the point of delivery, which could be your doorstep!
In addition because of the customs documentation required some sellers have increased their prices to cover the costs. Some have ceased selling to the UK completely.
Monday, 14 December 2020
What Hope For The Recovery?
The latest economic indicators for the UK economy from the Office for National Statistics (ONS) show 77% of UK businesses are currently trading, with 14% of trading business’ workforce on furlough leave. Their latest figures show that monthly gross domestic product (GDP) rose by 0.4% during October 2020 but was still 7.9% below February 2020 levels.
Output is expected to shrink again in November after England's second shutdown forced many businesses to close.
October 2020 saw the sixth consecutive month of growth, but the rate of recovery has slowed each month since the largest rise of 9.1% in June 2020. Across services, the monthly growth was driven by health, wholesale, retail and motor trades, and education, while accommodation and food and beverage service activities declined. Within manufacturing there was widespread growth, led by a rise of 6.8% in motor vehicle production. Monthly construction output growth slowed to 1.0% in October 2020, the sixth consecutive month of growth but the lowest rise in that time, with the level of construction output in October 2020 still 6.4% below the February 2020 level.
The figures are gradually improving although it is going to be a long haul. It is clear the hospitality, travel, arts and retail sectors are hardest hit and whilst there are regional grants to support them we believe these sectors will take the longer to recover.
A “No Deal” Brexit will have a negative impact on the economy in early 2021 and any recovery will take longer as a result. The Confederation of British Industry (CBI) predict the UK won’t get back to its pre-pandemic level until the end of 2022 and if there is “No Deal” this could take up to 2024.
Despite the pandemic and the possibility of “No Deal”, we still continue to be impressed with the resilience of our clients and how they have energetically repurposed or pivoted their businesses into new areas, products and services.
Please do talk to us about planning for 2021 and beyond, we have considerable experience in helping businesses project their figures forward and perform “What if” analysis to look at a range of scenarios.
Friday, 27 November 2020
27th November 2020 – Hillmans Weekly Update
27th November 2020 – Hillmans Weekly Update
Below I have summarised all the main tax related updates we have seen this week.
- Summary of the Chancellor's Spending Review
- Brexit Update
- Reminder on Changes to Entrepreneurs' Relief
- Nightclubs, Dance Halls, or Adult Entertainment Businesses
- Bring Your Tax Affairs up to Date
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.
Kind regards,
Steve
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
Tuesday, 24 November 2020
Brexit Update
Welcome to our Brexit update. There will be new rules for trade, travel and living
in the UK and EU from 11.00pm on the 31 December 2020. Our aim is to provide
you with information and resources to help you manage the change as smoothly as
possible.
The UK Prime Minister, Boris Johnson, UK Chief negotiator David Frost and EU negotiator Michel Barnier continue to offer differing messages to the public about Brexit, some are positive, some ambivalent and occasionally negative remarks about the negotiations. It is hard to see through the comments made and whether we can take them at face value as, after all, there is a negotiation going on.
So
what can we expect with less than 43 days to go?
Firstly,
remain positive about the UK and EU reaching some kind of free trade deal or
arrangement. It does not benefit anyone for the UK to leave the EU without a
deal of some kind.
Secondly,
if there is no deal, expect both parties to return to the negotiating table in
the new year.
Whatever
the outcome there are significant changes ahead for travel and trade.
Travel
If
you are travelling to the EU from the UK after the 1 January 2021 then check
out the Government website “Visit Europe from 1 January 2021”. This page tells
you how to prepare if you’re planning on travelling to Europe from 1 January
2021. It will be updated if anything changes.
See:
https://www.gov.uk/visit-europe-1-january-2021
Trading
If
you haven’t made your business preparations, check out the Brexit transition
website:
See: https://www.gov.uk/transition
If
you trade with the EU and have not yet made preparations then here is a summary
of actions to take:
·
If you move goods to or from the EU register (unless you already
have) for an Economic Operator Registration and Identification (EORI) number
- https://www.gov.uk/eori
·
Consider an agent to help with completing import/export forms – www.export.org.uk
·
If you export goods see the step by step guide here: https://www.gov.uk/prepare-to-export-from-great-britain-from-january-2021
·
Export rules are specific by sector so review “The transition
period ends in December” Government website. There you can get a personalised
list of actions and can subscribe for email updates: https://www.gov.uk/transition
·
The VAT reporting rules for EU sales can be found here: https://www.gov.uk/guidance/vat-how-to-report-your-eu-sales
·
If you import goods then see the guidance “Starting to
import”: https://www.gov.uk/starting-to-import/moving-goods-from-eu-countries
·
There is a step by step guide on importing here: https://www.gov.uk/prepare-to-import-to-great-britain-from-january-2021
·
Guidance on paying VAT on imports can be found here: https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad
·
Review HMRC YouTube videos on international trade here: https://www.gov.uk/guidance/help-and-support-for-international-trade
WHAT
ACTIONS HAS THE GOVERNMENT TAKEN TO DATE?
New
Legislation
Post-Brexit
legislation preparing the UK for life outside EU institutions next year have
been drafted or are being reviewed by Parliament. The immigration Bill received
Royal Assent last week. This ends freedom of movement on 31 December and
replaces it with a new points-based system.
If
your business relies on EU or other non UK workers then check out the
transitional arrangements to 30 June 2021 and the new rules here: https://www.gov.uk/settled-status-eu-citizens-families
Last
week the Agricultural Bill was debated and eventually passed through
Parliament. This removes the Common Agricultural Policy and replaces it with
new UK supports for farmers. The Government agreed that farmers will receive
the same level of support as they currently do through the Common Agricultural
Policy until 2024, while the current system of subsidies is gradually phased
out.
See: https://services.parliament.uk/Bills/2019-21/agriculture.html
We
can expect to see further progress to bring existing EU laws and rules into UK
legislation before the end of the transition period. For example, the Financial
Services Bill was introduced on the 21 October to maintain the UK’s regulatory
standards and openness to international markets.
This
Bill is the first step in shaping a regulatory framework for the UK’s financial
services sector outside of the EU.
See:
https://www.gov.uk/government/news/financial-services-bill-introduced-today
New
Trade deals
In
addition to passing legislation to ensure UK rules and regulations are
transparent at the end of the transition period, the Government is also negotiating
new trade deals. Whilst the UK was an EU member, the UK was part of 40 trade
deals which the EU had with more than 70 countries. More than 20 of these existing deals, covering
50 countries or territories, have been rolled over and will start on 1 January
2021.
It
is worth noting fifty-two countries currently have free trade deals in place
with the UK for the end of the Brexit transition period. These agreements
account for only 10 per cent of the UK’s total cross-border trade, according to
last year’s figures from the Office for National Statistics (ONS).
On
23 October, the Government signed a new trade agreement with Japan, which means
that 99% of UK exports there will be free of tariffs.
There
are further trade talks with Australia, the US and New Zealand. If and when
these talks come to a trade deal only time will tell.
EU-UK
trade accounts for half of overall UK trade and seven of the UK’s top ten
trading partners are EU members. That is the main reason why we all hope a
trade deal happens!
See: https://www.bbc.co.uk/news/uk-47213842
In
Summary
We
must all be prepared for changes in the way we travel and trade with Europe.
Even if there is a free trade deal the key thing to remember is that there will
be a UK border which will mean paperwork and border checks.
Businesses
that trade with the EU must get familiar with customs declarations as these
will be essential for accounting for VAT.
Depending
on what contracts a business has with its customers in Europe, it may have to
factor in that goods could take longer to get there, meaning extra costs and
administration.
In
the short term there will probably be delays at the border, so it is important businesses
map out supply chains and think about how to do things as efficiently as
practicable post transition.
Please talk to us about your plans post transition, we can assist in a number of ways including helping you account for VAT, looking at your accounting systems and pointing you in the direction of specialists to assist with the Trading administration.
Tuesday, 20 October 2020
20 Point UK Brexit Planning Checklist
Planning for the new requirements seems sensible right now. There are also other business matters to consider such as data protection, intellectual property and replacing existing agreements with EU suppliers and customers.
Use this 20-point checklist to review your Brexit preparedness and the Government information to prepare actions for 1 January 2021.
The Government has published guidance: “The transition period ends in December” see: https://www.gov.uk/transition
This outlines actions to take now if you are:
• importing goods into the UK
• exporting goods from the UK
• travelling to the EU
• living and working in the EU
• staying in the UK if you're an EU citizen
Here are some of the areas you should consider, particularly if you import or export goods to the EU and haven’t had the need to complete the various forms before:
1. If you move goods to or from the EU register (unless you already have) for an Economic Operator Registration and Identification (EORI) number - https://www.gov.uk/eori
2. Consider an agent to help with completing import/export forms – www.export.org.uk or DIY the forms (see below).
3. If you export goods see the step by step guide here: https://www.gov.uk/prepare-to-export-from-great-britain-from-january-2021
4. Export rules are specific by sector so review “The transition period ends in December” Government website. There you can get a personalised list of actions and can subscribe for email updates: https://www.gov.uk/transition
5. The VAT reporting rules for EU sales can be found here: https://www.gov.uk/guidance/vat-how-to-report-your-eu-sales
6. If you import goods then see the guidance “Starting to import”: https://www.gov.uk/starting-to-import/moving-goods-from-eu-countries
7. There is a step by step guide on importing here: https://www.gov.uk/prepare-to-import-to-great-britain-from-january-2021
8. Guidance on paying VAT on imports can be found here: https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad
9. Review HMRC YouTube videos on international trade here: https://www.gov.uk/guidance/help-and-support-for-international-trade
10. You may choose to register for “Authorised Economic Operator (AEO) status which enables “Trusted” businesses simplified customs procedures. Application does take time and is complex. See: https://www.gov.uk/guidance/authorised-economic-operator-certification
11. In the event of the EU and UK not agreeing a free trade agreement, from 1 January 2021 all exports and imports to the EU will be subject to tariffs. You will need to identify where “inputs” come from and which categories of product they fall into so you can work out the tariffs that will apply. The UK Government have published trade tariffs duty and VAT rates by commodity: https://www.gov.uk/trade-tariff
12. If you currently have business agreements with EU companies these may need to be redrafted to cover off areas such as customs arrangements, import duties, how VAT is accounted for, definitions such as “Territory”, dispute resolution and unanticipated administration as a result of Brexit. Consult a lawyer for advice to avoid any potential issues sooner rather than later.
13. Review all EU employees currently working in your business and ascertain whether they are applying for “Settled status” by 31 December 2020. See: Your UK employees working in the EU may need to apply for similar status. https://www.gov.uk/government/publications/eu-settlement-scheme-employer-toolkit
14. If your business has a “.EU” domain name you should check the eligibility to hold such a domain here: https://www.gov.uk/government/publications/guidance-on-eu-top-level-domain-name-registrations-in-the-event-of-a-no-deal-eu-exit/guidance-on-eu-top-level-domain-name-registrations-in-the-event-of-a-no-deal-eu-exit
15. If you are involved in eCommerce then read the Governments EU guidance: https://www.gov.uk/government/publications/ecommerce-eu-exit-guidance
16. Data Protection – you may need to comply with new license requirements and changes in regulation. The Information Commissioner’s office (ICO) will update its guidance once the outcome of the negotiations is known. See: https://ico.org.uk/for-organisations/data-protection-at-the-end-of-the-transition-period/
17. Copyrights - A substantial part of UK copyright law is derived from the EU copyright framework. Because of this, there are references in UK law to the EU, the EEA, and member states. Some of these references occur in the UK’s implementation of EU cross-border copyright arrangements. These arrangements apply only within the EU and EEA and provide reciprocal protections and benefits between member states. If there is no future reciprocal UK EU deal contact your lawyer to discuss. See: https://www.gov.uk/guidance/changes-to-copyright-law-after-the-transition-period
18. For Intellectual Property see: https://www.gov.uk/government/news/intellectual-property-and-the-transition-period
19. For Trademarks see: https://www.gov.uk/guidance/eu-trademark-protection-and-comparable-uk-trademarks
20. Consider forming a company in the EU.
Disclaimer
No responsibility for loss occasioned to any person acting or refraining from action as a result of the material in this article can be accepted by Hillmans Limited.
Friday, 28 February 2020
February 2020 Tax Tips & News
Thursday, 31 October 2019
October 2019 Tax Tips & News
To October's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.
Please contact us for advice in your own specific circumstances. We're here to help!
October 2019
· HMRC publish Agent Update: Brexit Special
· Delay in implementation of domestic reverse charge VAT for construction services
· HMRC win IR35 case
· Tax-free expenses for home-workers
· October questions and answers
· October key tax dates
Friday, 30 June 2017
June 2017 Tax Tips & News
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