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Sep 6

NEWS FLASH - Preparing for Brexit

Preparing For Brexit – Importers &  Exporters

Whatever your political allegiance and opinion of Brexit may be, most people agree that politicians from all sides have let us down.

The uncertainty presented by the Brexit position is inevitably having a negative impact and it is a huge issue over which we have no control.

We have tried to summarise the position as it stands. However this is not the answer!

The Current Position –  Which Is Subject to Change No Doubt But

At the moment the UK will leave the EU on 31 October 2019. Obviously there are moves to prevent this happening but there are still a number of hoops to jump through.

If we assume that there is no agreement put in place to keep the UK within the customs union, import and export procedures will change from 1 November 2019.

HMRC believe that all businesses that export to or import from EU countries will need an Economic Operation Registration Identification (EORI) number, issued by the UK.

What is an EORI number?

The EORI number is 12 digits long and if the business is VAT registered the EORI number will incorporate its VAT registration number.

EORI numbers issued to UK-based businesses start with “GB”.

Automatic allocation

HMRC is automatically allocating EORI numbers to 88,000 VAT registered traders which it knows have traded with the EU in the past but do not already have an EORI number.

HMRC are sending these traders letters with their unique EORI number.

Will an EORI number work?

Only EU member nations can issue EORI numbers. The UK can currently issue EORI numbers because the UK is an EU member nation. If the UK ceases to be an EU member nation, the UK-issued EORI number is potentially invalid.

VAT payments

If you manage to clear customs, UK businesses will have to pay VAT on any goods imported from the EU into the UK.

A trader can register for transitional simplified procedures, which is an additional process to the EORI number.

There may also be tariffs.

There is still a lot to understand about importing and exporting post-Brexit.  We will try to keep you updated. Hopefully more will become clear over the next few days.

Sep 5

Tax Diary September/October 2019

1 September 2019 - Due date for Corporation Tax due for the year ended 30 November 2018.

19 September 2019 - PAYE and NIC deductions due for month ended 5 September 2019. (If you pay your tax electronically the due date is 22 September 2019)

19 September 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 September 2019. 

19 September 2019 - CIS tax deducted for the month ended 5 September 2019 is payable by today.

1 October 2019 - Due date for Corporation Tax due for the year ended 31 December 2018.

19 October 2019 - PAYE and NIC deductions due for month ended 5 October 2019. (If you pay your tax electronically the due date is 22 October 2019.)

19 October 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 October 2019. 

19 October 2019 - CIS tax deducted for the month ended 5 October 2019 is payable by today.

31 October 2019 – Latest date you can file a paper version of your 2019 self-assessment tax return.
 

Sep 5

Autumn Budget 2019

If there was a measure of stability in UK politics, we would be expecting the usual dispatch-box presentation by the Chancellor before Christmas. The annual budget is usually presented November each year.

This may still happen this year, but present uncertainties regarding the Brexit outcome, and the present government’s slim majority, may scupper that timetable – we may have two budgets this Autumn or none at all.

Nevertheless, we will advise if and when a date is agreed. If we do leave the EU with no-deal, gripping the sides of your chair may be in order as the fiscal changes required (changes to taxation) to meet the resulting economic consequences, may be significant.

We will keep you posted.

Sep 5

Are you making the most of “Trivial Benefits”?

Earlier this year we highlighted the tax concession afforded by the so-called Trivial Benefit rules.

We said: 

It is possible to make small tax-free payments to employees, including directors…

Employers and employees don’t have to pay tax on such a benefit if all of the following apply:

  • it cost you £50 or less to provide,
  • it isn’t cash or a cash voucher,
  • it isn’t a reward for their work or performance,
  • it isn’t in the terms of their contract.

HMRC describes these payments as a ‘trivial benefit’. 

You can’t receive trivial benefits worth more than £300 in a tax year if you are the director of a ‘close’ company. A close company is a limited company that’s run by 5 or fewer shareholders.

Readers who manage a business may want to integrate a formal process into their benefits strategy to take advantage of this opportunity.

Every little helps.

Sep 5

Changes to contractor VAT from 1 October 2019

We have alerted building contractors and sub-contractors in previous newsletters of changes to the VAT rules from 1 October 2019.

In a nut-shell, if you are subject to the Construction Industry Scheme and if you are registered for VAT, from the 1 October 2019 you may need to change the way you account for VAT on supplies between sub-contractors and their contractor customers.

At present, sub-contractors registered for VAT are required to charge VAT on their supplies of building services to contractors. From 1 October this approach is changing.

From this date sub-contractors will not add VAT to their supplies to most building customers, instead, contractors will be obliged to pay the deemed output VAT on behalf of their registered sub-contractor suppliers.

This does not mean that contractors, in most cases, are paying their sub-contractors’ VAT as an additional cost.

When contractors pay their sub-contractors’ VAT to HMRC they can claim back an equivalent amount as VAT input tax; subject to the usual VAT rules. Accordingly, the two amounts off-set each other.

The change is described as the Domestic Reverse Charge (DRC) for the construction industry. It has been introduced as an increasing number of sub-contractors have been registering for VAT, collecting the VAT from their customers, and then disappearing without paying the VAT collected to HMRC.

Beware cash flow concerns

However, the change to DRC may create cash flow issues especially if you use the VAT Cash Accounting Scheme or the Flat Rate Scheme.

We recommend that all affected CIS readers contact us so we can help you make the necessary changes to your invoicing and accounting software and reconsider the use of VAT special schemes if your continued use would adversely affect your cash flow.
 

Aug 20

Tax Diary August/September 2019

1 August 2019 - Due date for Corporation Tax due for the year ended 31 October 2018.

19 August 2019 - PAYE and NIC deductions due for month ended 5 August 2019. (If you pay your tax electronically the due date is 22 August 2019)

19 August 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 August 2019. 

19 August 2019 - CIS tax deducted for the month ended 5 August 2019 is payable by today.

1 September 2019 - Due date for Corporation Tax due for the year ended 30 November 2018.

19 September 2019 - PAYE and NIC deductions due for month ended 5 September 2019. (If you pay your tax electronically the due date is 22 September 2019)

19 September 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 September 2019. 

19 September 2019 - CIS tax deducted for the month ended 5 September 2019 is payable by today.

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