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04-02-2020

The 2020–21 limits and thresholds for National Insurance Contributions (NICs) have been announced and draft regulations have been laid before Parliament.

The above inflation increase in the primary threshold and the lower profits limit is a step towards the government’s ambition to raise these amounts to £12,500.

For a full lost click here.


While the Class 1 primary threshold and Class 4 lower profits limit will increase significantly, the upper limits remain unchanged. Other thresholds will see an inflationary increase.

View the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2020.

For a full list click here.



31-01-2020

As the UK has agreed to leave the EU with a deal, which includes a transition period until 31 December 2020, nothing will change in terms of VAT immediately. During the transition period, the UK will remain part of the single market and customs union meaning that we will continue to follow the rules regarding Intra-EU movement of goods set out in VAT Notice 725 – The single market and updated guidance on zero-rating published in December 2019 pending an update to the notice https://www.gov.uk/government/publications/changes-to-vat-for-intra-eu-chain-transactions-and-zero-rated-goods


This means that VAT registered traders can continue to zero-rate their sale of goods, as long as they have their customers EU VAT number, the goods are sent or transported to another EU member state, and they keep valid commercial evidence that the goods have been removed from the UK within the relevant time limits (see VAT Notice 725, paragraph 4.4) The transition period also means that VAT registered traders must continue to submit EC sales lists monthly or quarterly as appropriate.


VAT registered traders are advised to obtain an EORI number ahead of the EU exit, in case the UK left the EU with no deal. They should keep this reference as they are still likely to need this at the end of the transition period – equally if they have registered for Transitional Simplified Procedures (TSP) for imports, they should keep this paperwork ready for the end of the transition period.


NB. During the transition period, businesses will still be able to submit valid EU refund claims via HMRC, and those businesses that are registered for VAT MOSS because they supply B2C supplies of digital services to EU consumers, may continue to submit VAT MOSS returns for the time being in the UK, rather than needing to register in an alternative EU member state.


29-01-2020

HMRC are writing to VAT registered businesses which they have identified as there being trade between the UK and the EU.

WHAT WILL HAPPEN AFTER 31 JANUARY 2020

From 1 February the UK will no longer be a member of the EU, and the UK will enter an implementation period that lasts until 31 December 2020. During this time there will be no changes to the terms for trading with the EU or the rest of the world, unless the rules change for the whole of the EU. This means EU rules for customs, VAT and excise will continue to apply to the movement of goods and trade for this limited time. There will be no new customs procedures at present.

WHAT WILL HAPPEN AFTER 31 DECEMBER 2020

From 1 January 2021, the way VAT registered traders trade with the EU will change, and will need to prepare for life outside the EU, including new customs arrangements. For example, for trade between Great Britain (GB) and the EU, they will need to make customs declarations to import and export goods once the UK is outside of the EU's customs territory.

HMRC will provide more information and guidance during the implementation period, and as the negotiations progress.

WHAT YOU NEED TO DO NOW

•    Keep up to date

If VAT registered traders are registered for HMRC to provide them with updates by email, HMRC will use that to contact them in future, otherwise communication will be in the form of a letter.
If traders still want to receive paper letters, they can let HMRC know by updating their registration.
Go to www.gov.uk/hmrc/business-support and select 'Sign up to help and support emails from HMRC'.

•    Make sure you have your Economic Operator Registration and Identification (EORI) number

Registered traders will need a UK EORI number that starts with the letters 'GB to be able to submit customs declarations to move goods between GB and the EU after the implementation period ends.
If you already have a UK EORI number starting with 'GB', keep it safe as you will need it when the implementation period ends.
If you do not have a UK EORI number starting with 'GB' you should register for one at www.gov.uk/eori    It's quick and easy to register.

•    Decide how to make customs declarations

Traders will need to make customs declarations to import and export goods between GB and EU countries once we are outside of the EU's customs territory.

If you've only ever traded with the EU, or if you already trade with non-EU countries but need to expand or change your processes to cover your GB-EU imports and exports, you should start to prepare now to make customs declarations, by deciding if you want to use a third party such as a customs agent or make declarations yourself.#

If you decide to use a customs agent, you should start contacting agents now, to find out about the services they provide. You can find guidance by going to:
www.gov.uk/guidance/appoint-someone-to-deal-with-customs-on-your-behalf. If you want to make declarations yourself, HMRC will soon be providing more information and guidance about what will be required. HMRC will be providing more information about customs processes for Northern Ireland soon.

FURTHER SERVICE UPDATES

Registration and use of Transitional Simplified Procedures (TSP) for imports from the EU is currently suspended. You will not need to use TSP between February and December 2020. If you applied for this service, keep your paperwork safe. In addition, postponed VAT accounting is currently not available during the implementation period.

HMRC say they appreciate you may have more queries about what you need to do next. They will provide more information as soon as we can about the future processes for importing and exporting and what you'll need to do.

22-01-2020

The Government has published the proposed statutory rates for Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Shared Parental Pay (ShPP) and Statutory Adoption Pay (SAP), which come into effect on 5 April 2020, the first Sunday in April. The rate is set to increase from £148.68 to £151.20 per week.


Additionally, the rate for statutory sick pay is to increase from £94.25 to £95.85 per week. This increase will take effect from 6 April 2020.


It should be noted that the lower earnings limit from April 2020 is yet to be published.

To view the new rates click here.



14-01-2020

The changes are set out in Schedule 2 of the Finance Act 2019 (‘FA 19’).

This schedule sets out the changes to the capital gains tax rules that apply to both UK residents and non-residents. However, there are some notable differences in how the new rules apply to those affected. If non-resident the rule changes from April 2019 and April 2020 will apply.  In contrast, the rule changes relating to UK residents principally apply from 2020.

The changes centre around the filing date and the payment date. For context, one needs to look at how these rules have evolved in recent years.

Between 2015 and 2019 a non-resident individual was subject to tax in the UK in respect of gains arising from a disposal of residential property (see Schedule 1B TCGA 1992 for a definition of a residential property gain). From 6 April 2019, the scope to tax has been extended to cover both residential and commercial property and therefore the disposal of both of his properties will now be subject to capital gains tax.  The scope has further been widened to include the direct disposal of UK land and the indirect disposal of the UK (via a “property rich company” for example).

From 2015 a filing date of 30 days was introduced for non-residents with some exceptions (for those caught within the Annual Tax on Enveloped Dwellings (ATED) for example).  Companies were excluded from April 2019 and from 2020 this exception has been removed for everyone else and all relevant disposals by non-residents, other than companies, will have to be reported within 30 days.

In contrast, whilst UK residents do not have the filing obligation if no gain arises and certain conditions are met (e.g. perhaps where they are claiming the main residence exemption), this is not the case for non-residents as they must file a return even if no tax liability arises. Non-residents will have to file a separate return for each disposal unless they happen on the same day.

The payment obligation, set out in Para 6 Schedule 2 of FA 2019, states that payment of CGT will now be due by 30 days from completion for disposals from April 2020 regardless of whether the individual is within self-assessment or not.  For disposals, after April 2019 and before April 2020 it is possible for a non-resident’s payment obligation to be aligned with the self-assessment deadline of 31 January. This will be a noteworthy change.

Paragraph 6, FA 2019 onwards sets out the obligation to make a payment on account of capital gains tax.  The payment is due on the filing date of the 30-day return as referred to above. This might result in taxpayers paying CGT before a tax year has even ended (!) and having to estimate their liability based on their best guess of the tax band that the gain will sit in.

This whole process is further complicated by rules on which losses can be offset against the gain and the somewhat inevitable need to amend these returns to account. There are separate rules pertaining to companies.

13-01-2020

HMRC has published outline guidance on the changes to the regulations on money laundering and terrorist financing, which have been extended to cover lettings agents and art dealers from mid-January, with more detailed information set to follow


13-01-2020

HMRC has updated its guidance on the extension of existing off-payroll working rules (IR35) to the private sector, scheduled for April, with a new contractor factsheet setting out the changes


10-01-2020

The current government position is that the UK will leave the European Union on 31st January 2020. This will have an impact on EU VAT refund claims (formerly known as 8th Directive Claims). The latest guidance published on the HMRC Website 18 September 2019 advises that it will not be possible to use HMRC’s VAT online services to claim a VAT refund from an EU member state after 5 pm on 31 January 2020. 

The guidance, which is titled “Claim VAT refunds from EU countries after Brexit”, goes on to advise that after Brexit refund claims will need to be made using the existing processes used by businesses based outside the EU, even where the claim is for expenses incurred before Brexit.  

The deadline is therefore not the deadline by which a claim for which EU VAT incurred in 2019 must be made, but it is the deadline for such a claim to be made via the HMRC Online Portal. The deadline is tight, but If it is possible to do so, the process for claiming via the HMRC Portal is likely to be simpler. 

07-01-2020

The Chancellor, Sajid Javid, has confirmed that Budget 2020 will be on Wednesday 11 March.

07-01-2020

The government has confirmed that the National Living Wage (NLW) will rise from its current level of £8.21 per hour to £8.72 per hour from 1 April 2020.

The NLW for over 25 year olds) will increase 6.2% from £8.21 to £8.72 from 1 April 2020.

The National Minimum Wage (NMW) will rise across all age groups, including:

a 6.5% increase from £7.70 to £8.20 for 21 to 24 year olds;

a 4.9% increase from £6.15 to £6.45 for 18 to 20 year olds;

a 4.6% increase from £4.35 to £4.55 for under 18s; and

a 6.4% increase from £3.90 to £4.15 for apprentices.

For further details, see the Government press release Government announces pay rise for 2.8 million people.



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