November 2020

Welcome to our monthly newsletter. We hope you find it helpful and will contact us if you have any questions or would like to discuss any issues further. The updates this month relate to increases to COVID-19 support and Brexit measures.

Please note that the Welsh ERF Phase 3 Business Grant was suspended shortly after opening due to high demand but it is hoped that it will reopen soon. In the meantime, the Welsh Lockdown Business Fund grants are still available to be claimed.

Furlough scheme extended

On 5 November, Chancellor Rishi Sunak announced that as part of the new national lockdown the Coronavirus Job Retention Scheme (CJRS) has been extended until the end of March 2021. This announcement updates the Prime Minister's previous announcement on 31 October that the CJRS would be extended for a month until December.

The scheme has also reverted to its original level of support. Furloughed employees will receive 80% of salary for hours not worked and businesses asked only to cover national insurance and employer pension contributions.

The CJRS was due to have ended on 31 October after being scaled back to cover 60% of salaries during that month.

The scheme will remain flexible and furloughed employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500.

The Job Support Scheme (JSS), which had been due to launch on 1 November has now been postponed, and will not start until the CJRS has closed.

Increased support made available for self employed

The government has increased the support available to self-employed workers and extended its emergency business loan schemes as the UK heads for a second national lockdown.

The level of the third instalment of the Self-employment Income Support Scheme (SEISS) has increased from 55% to 80% of average trading profits and covers November to January.

The maximum grant will be capped at £7,500.

The claims window opens 30 November.

Grants for businesses closed by lockdown

The additional funding for cash grants to support businesses required to close in England due to the lockdown is as follows:

For properties with a rateable value of £15,000 or under, grants to be £1,334 per month, or £667 per two weeks
For properties with a rateable value of between £15,000-£51,000 grants to be £2,000 per month, or £1,000 per two weeks
For properties with a rateable value of £51,000 or over grants to be £3,000 per month, or £1,500 per two weeks.

Self-assessment customers to benefit from enhanced payment plans

Self-assessment taxpayers are now able to benefit from enhanced payment plans and can apply online for additional support to help spread their tax bill into monthly payments.

The online payment plan service was already able to set up instalment arrangements for paying tax liabilities up to £10,000. From 1 October 2020, HMRC increased the threshold to £30,000 for self-assessment customers.

Self-assessment taxpayers can pay their deferred payment on account bill from July 2020, any outstanding tax owed for 2019/20 and their first payment on account for 2020/21 in monthly instalments, up to 12 months via this self-serve tool.

Taxpayers who wish to set up their own self-serve Time to Pay arrangements must meet the following requirements:

they have no outstanding tax returns, other tax debts or other HMRC payment plans set up
the debt needs to be between £32 and £30,000; and
the payment plan needs to be set up no later than 60 days after the due date of a debt.

Taxpayers using self-serve Time to Pay will be required to pay any interest on any outstanding balance from 1 February 2021.

HMRC is also warning taxpayers to be aware of scams claiming to be from HMRC, offering to help set up payment plans to pay any tax owed.

Please do contact us for advice on meeting your tax payments.

Taxpayers claim tax relief for working from home

HMRC has received more than 54,800 claims from taxpayers using a new online portal which allows workers to claim tax relief for working at home.

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home.

Launched on 1 October 2020, the online portal has been set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer to help stop the spread of COVID-19.

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC.

HMRC is encouraging taxpayers claiming tax relief for working from home to apply directly through GOV.UK working at home.

Eligible taxpayers can claim tax relief based on the rate at which they pay tax. For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.

Higher rate taxpayers would therefore receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

If you trade via your own limited company, it is usually simpler to claim this through the company accounts as an expense claim, so please do let us know if you have to work from home when you provide us with you records for your annual company accounts.

Brexit imports and exports

From 1 January 2021, the UK will operate a full external border with the EU, which will entail major changes for imports and exports to and from the trading bloc. From 1 January 2021, declarations will be needed to import or export specific (limited) goods categorised as 'controlled'.

However, for non-controlled goods brought from the EU to GB, import controls apply in three stages: January, April and July 2021. Some changes will apply to all goods movements, and will involve customs declarations, customs duties and VAT on imports, and safety and security declarations. 'Additional requirements' come in, but only affect certain specific goods movements, such as foodstuffs.

Points to consider now include:

Economic Operators Registration and Identification (EORI) numbers: from 1 January 2021, an EORI number with the prefix 'GB' is needed to move goods between the UK and the EU, unless you only move goods between Northern Ireland and Ireland.

Remember that from January 2021, it will be important to think about both the UK and EU sides of the equation: to comply with EU requirements, you will, for example, need an EU EORI number if your business makes customs declarations or gets a customs decision in the EU.

Using a customs intermediary: given the complexity of UK and EU customs declarations, you may want to engage a customs intermediary to deal on your behalf.

Postponed VAT accounting for goods imported from the EU: from 1 January 2021, import VAT applies to imports from the EU. Using 'postponed VAT accounting' from 1 January 2021 lets you account for import VAT on your VAT return, giving the potential to declare and recover import VAT on the same return.

Delaying customs declarations and payment of tariffs: when the UK's full suite of border controls are in place in July 2021, full customs declarations and payment of customs duties, as set out in the new UK Global Tariff (or as specified in any trade deal with the EU) must take place when goods are imported from the EU. But from 1 January 2021 to 30 June 2021, most traders with a good compliance record can defer declaration and payment for up to six months on imports of standard goods from the EU.

This is only a summary outline of some of the issues involved. Gov.uk provides an online checker tool to use in your own circumstances. Do talk to us where further advice is needed.

Transition Update

The free-to-use Trader Support Service (TSS) is now live and ready to support businesses with the changes to Northern Ireland trade, which take effect on 1 January 2021.

One of the changes you need to prepare for is the requirement to submit declarations.

Digital import declarations as well as safety and security declarations will be needed for goods moving from Great Britain to Northern Ireland to ensure that:

tariffs are not paid on trade within the UK
Northern Ireland can benefit from UK Free Trade Agreements
goods destined for Ireland (i.e. the EU) pay tariffs when they should

You'll be able to use the Trader Support Service to make these declarations.

It's available to all traders, regardless of size, and is free to use – act now to get your business ready.

To move goods to or from Northern Ireland from 1 January 2021, you'll need an EORI number that starts with XI. To get an EORI number that starts with XI, you must already have an EORI number that starts with GB. If you do not have one, apply for an EORI number that starts with GB as soon as possible.

To save yourself time and effort, sign up to the TSS before 23 November 2020 and you'll automatically be allocated an XI EORI.

If you do not sign up before 23 November, you may have to make a separate application for an XI EORI.

The Trader Support Service is open to traders, intermediaries and carriers moving goods into and out of Northern Ireland. By registering for the TSS, you will gain access to a programme of free information and training from the Northern Ireland Customs & Trade Academy.