Government promises simplified customs procedures in event of no-deal Brexit

Government promises simplified customs procedures in event of no-deal Brexit

HM Revenue & Customs (HMRC) will introduce a simplified importing procedure for businesses trading with the EU should the UK leave without a deal in March.

Transitional Simplified Procedures (TSP) for customs will allow businesses to transport goods into the UK from the EU without having to make a full customs declaration at the border.

The temporary arrangement will also allow businesses owners to postpone payments on import duties.

To register, businesses require a UK Economic Operator Registration and Identification (EORI) number, which we’ve highlighted in a previous blog.

EORI numbers are currently used by businesses who trade with the rest of the world (not including the EU). Up until now, agreements between EU member states mean that an EORI number is not required.

However, if the UK were to leave the EU with no deal in place, UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world.

If you do not already have a valid EORI number, your business can apply for one here.

Commenting on the announcement, Treasury Minister Mel Stride said: “Leaving the EU with a deal remains the government’s top priority. This has not changed. However, a responsible government must plan for every eventuality, including a no deal scenario. Businesses and citizens should ensure they are similarly prepared for leaving the EU.”

According to Ms Stride, the Government has so far written three letters to more than 145,000 VAT-registered businesses trading with the EU.

She added: “This latest letter, and new GOV.UK guidance, announces Transitional Simplified Procedures for EU trade which will ease the transition, especially for businesses new to the rules associated with importing.”

HMRC takes new measures to toughen stance on debt recovery

HMRC takes new measures to toughen stance on debt recovery

HM Revenue and Customs (HMRC) has toughened its stance on debt recovery, by taking money owed to them directly from hundreds of pay packets during the last financial year.

In data obtained via a Freedom of Information request, it was revealed that HMRC used attachment of earning orders against 428 people during the 2017/18 financial year.

An attachment of earnings order is a method of debt recovery, granted by a court, which works out the minimum amount of money a debtor needs to live on and deducts the sum owed from the money earnt above this amount.

Experts believe that these orders are favoured by HMRC because it means that the individual cannot reduce payments if they are short of money one month and they are considered similar to the process of physically seizing assets to then sell at auctions.

Although seen by some as one of the most aggressive tools HMRC has at its disposal, the increase in people failing to pay debts is beginning to justify the use of the tactic.

Data has revealed that HMRC’s spending on private sector debt collectors rose by 62 per cent to £39m in 2017, up from £24m in 2016, a move that has been attributed to the government department becoming “increasingly impatient” over chasing outstanding debts. 

An HMRC spokesperson said: “All of HMRC’s powers are given to us by Parliament and are subject to appropriate checks and balances.

“Enforcement action is only ever considered as a last resort, we will always attempt to engage in discussion regarding payment, and when appropriate agree on reasonable offers of payment over a longer period of time-based on individual circumstances.”

SMEs: The importance of purpose

SMEs: The importance of purpose

The importance of purpose for the UK’s small and medium-sized enterprises (SMEs) has been explored in a recent report. It found that a massive 91 per cent said that a vital part of running a successful business is having a clear purpose.

70 per cent – 3.9 million of the total 5.7 million – were driven by a desire to improve their local area and the lives of the customers they serve.

According to 72 per cent of SMEs, their business plays an important role in the community – 30 per cent believe their business is a vital part of community life, and 32 per cent boast bringing jobs and wealth to their local area.

52 per cent of SMEs have stated that their business exists in order to have a positive impact on the lives of their customers.

23 per cent of SMEs were found to support community projects or local charities, while 28 per cent state they provide an invaluable service to more vulnerable groups of individuals.

It is claimed by 26 per cent of SMEs that they want to offer a more cost-efficient service.

Customers appear to appreciate the community spirit of SMEs, a separate report showed that 53 per cent of people prefer purchasing goods or services from companies that share similar values to themselves.

Experts who released the report believe that SMEs are “leading the way” in regards to defining a clear purpose for their business. They went on to express pleasure in regards to how SMEs want to improve the lives of their customers and take their role in the community seriously.

Record number of Self-Assessment tax returns filed by the deadline

Record number of Self-Assessment tax returns filed by the deadline

HM Revenue and Customs (HMRC) has revealed that a total of 93.68 per cent of Self-Assessment tax returns were filed by the deadline.

This equated to a record number of 11.5 million taxpayers submitting their 2017/18 tax returns by 11:59 pm on 31 January.

Statistics indicated that the peak hour for filing was 4 pm to 5 pm on the 31 January, where over 60,000 tax returns were filed.

In addition, more than 10.1 million (93.5 per cent of total filed) taxpayers submitted their returns online.

Nevertheless, 700,000 taxpayers failed to submit their tax returns on deadline day.

Mel Stride, Financial Secretary to the Treasury, said: “It is great to see so many people completing their Self-Assessment by the deadline. Their income tax contributions have helped towards funding the UK’s vital public services including hospitals, schools and the emergency services.”

HMRC’s Director General for Customer Services, Angela MacDonald, said: “Thank you to everyone who filed on time. This year, we had a record number of filers completing their tax returns by the deadline.”

Any taxpayer who has missed the deadline and needs expert advice or support, then please don’t hesitate to get in touch with us today.

Trading after Brexit: What is an EORI number and why do I need one?

Trading after Brexit: What is an EORI number and why do I need one?

The Government has written to more than 145,000 VAT-registered businesses across the UK, explaining the potential changes to customs, excise and VAT in the event that the UK leaves the EU without a deal.

Among these changes is the requirement to register for a UK Economic Operator Registration and Identification (EORI) number. Without one, businesses will unlikely be able to continue trading after 29 March 2019.

Below we’ll explain what an EORI number is, and how to register for one if you haven’t already.

What is an EORI number?

EORI numbers are currently used by businesses who trade with the rest of the world (not including the EU). Up until now, agreements between EU member states mean that an EORI number is not required.

However, if the UK were to leave the EU with no deal in place, UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world.

How to register an EORI number

Before registering, businesses should check whether they already have a valid EORI number. To do this, either ask your advisor or follow the below steps:

1. Input the VAT registration number into the checker here with ‘GB’ as a prefix (where the VAT registration number was issued in the UK, if this was another EU country, then the relevant ISO code of the country that granted the number should be used) and ‘000’ afterwards.

2. This will detail if the EORI number is valid or not. If it is then the company doesn’t need to take any further action as they already have an EORI number.

If you do not have a valid number, your business can apply for one here. Note – the form to use depends on whether you are VAT registered or not. The process should take about three working days and the contact email address should receive an email confirming this.

Get help today

If you need help registering for an EORI number, or require urgent advice on preparing for all possible Brexit outcomes, please get in touch with our expert team.

Could corporation tax cuts lose the UK £6.2 billion a year?

Could corporation tax cuts lose the UK £6.2 billion a year?

Although the government has stated that cuts in corporation tax will ultimately increase revenue, HMRC has argued that it could actually cost the public around £6.2 billion a year.

In a policy proposed in 2015 by former Member of Parliament George Osbourne, taxes on company profits are set to fall by two per cent. Currently, corporation tax in the UK stands at 19 per cent – which is already one of the lowest globally. This has gradually fallen since 1979 when corporation tax stood at 52 per cent.

There have been steep cuts to budgets for councils and departments, a £20 billion NHS spending shortfall, and a freeze on benefits for the fourth year in a row which has led to high levels of poverty among workers. This perfect storm of issues has brought about this drastic proposed change.

The government argues that a decrease in corporation tax will make the UK a more attractive country for new companies to base themselves while also giving those pre-existing companies more money to invest in UK capital. There is currently no evidence of this being the case, however.

According to Ministers, corporation tax is funding public services better than it ever has done in the past, bringing in £56.2 billion last year – although cause and effect appears to have been implied rather than proven between the lowering of corporation tax and the rising of receipts.

Helen Miller, Deputy Director at the Institute for Fiscal Studies disagrees, stating: “Changes to corporate tax have represented some of the largest giveaways in both parliaments since 2010.”

Services sector exports record numbers, report shows

Services sector exports record numbers, report shows

The UK services sector has experienced a record year, increasing exports to regions all around the world.

The report, published by the Department for International Trade (DIT), shows that services exports grew the most to the Americas, rising by 2.6 per cent to £74.6 billion in the year to Q3 2018.

Alongside the Americas, Asia saw strong growth of 1.9 per cent to £42.1 billion, followed by Europe (up 1.7 per cent to £149.4 billion) and Australasia & Oceania (Up 1.1 per cent to £7 billion).

The services sector includes retail, banks, hospitality, real estate, education, media and other recreational activities.

When looking at individual services, the financial sector outperformed in terms of growth, rising 3.9 per cent to £60.9 billion during the period recorded. The report notes that the US was the largest single country contributor to the increase, importing £14.5 billion worth of financial services from the UK.

In total, the services sector exported £281 billion worth of products in the year to November 2018, a rise of £2.1 billion compared to the year previous.

Commenting on the figures, International Trade Secretary, Liam Fox said the report shows how our “world-leading services sector” continues to play a key part in our position as one of the world’s largest exporters.

“British services, ranging from our renowned financial sector to its expertise in management consultancy are in demand all over the world, with the US alone importing over £62.7 billion worth of British services,” he said.

The report follows recent figures which show that the number of UK businesses trading abroad has increased by 6.6 per cent to 235,800.

Businesses reminded to take steps to prepare for upcoming payroll changes

Businesses reminded to take steps to prepare for upcoming payroll changes

Business owners in the UK are being reminded to take sufficient measures to prepare their businesses for the upcoming changes to legislation regarding payroll, which will come into force on the 6 April 2019.

The changes to the legislation are being introduced in a bid to improve the transparency around worker’s pay and how it is calculated by employers, and HM Revenue & Customs (HMRC) has published guidance in a bid to help businesses prepare for the changes.

This is the latest tactic from HMRC in their mission to crack down on payroll failings in relation to the National Minimum Wage (NMW), auto-enrolment pension contributions and company bosses wrongly defining workers as self-employed.

The new legislation will require employers to provide payslips to all workers, not just employees and most crucially show fully itemised payslips, with a clear breakdown of hours on payslips where the pay varies by the amount of time worked.

The HMRC guidance outlines that the hours can be shown either as a single total of all such hours in the pay period, or they can be broken down into separate figures for different types of work or different rates of pay. However, it should be clear which pay period they were worked in.

Payslips can be provided through printed or written document or even submitted to the employee electronically, as long as they receive it on or before their payday.

Ahead of the deadline, experts are urging businesses to act now to ensure a smooth transition, as it is believed that many businesses will need to completely revise their current payroll processes to ensure with they comply with the new changes, which could prove to be a time consuming process.