Completing a One Stop Shop VAT return

HMRC’s guidance on how to complete and submit a One Stop Shop (OSS) VAT Return from 1 October 2021 has been updated. The special VAT return should only be completed by businesses registered for the OSS Union scheme.

The OSS Union scheme can be used by businesses selling goods from Northern Ireland to consumers in the EU under the terms of the Northern Ireland Protocol. In order to use the scheme, sales must be above the distance selling limit of £8,818 (€10,000). The scheme is only for the sale of goods. Supplies of digital services to consumers in the EU should not be reported.

Using the OSS saves affected businesses from having to register for VAT in up to 27 EU countries where they make distance sales of goods from Northern Ireland. The OSS Union scheme can be used to manage the VAT on distance sales of goods from Northern Ireland to the EU in one place.

Source: HM Revenue & Customs Mon, 27 Sep 2021 00:00:00 +0100

MTD for Income Tax has been delayed by one year to April 2024

The introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) has been delayed by one year until April 2024. This change was announced in a Written Statement to Parliament. The reason for the delay was given as combination of the issues many UK businesses and their representatives are facing as a result of the pandemic as well as feedback from interested parties.

MTD for ITSA will fundamentally change the way businesses, the self-employed and landlords interact with HMRC. The regime will require businesses and individuals to register, file, pay and update their information using an online tax account. From April 2024, the rules will apply to taxpayers who file Income Tax Self-Assessment tax returns with business or property income over £10,000 annually.

General partnerships will not be required to join MTD for ITSA until a year later, in April 2025. The date other types of partnerships will be required to join will be confirmed in the future. The new system of penalties for the late filing and late payment of tax for ITSA will also be aligned with the new MTD dates.

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the MTD for ITSA. The pilot is not affected by the delay and will be extended in 2022-23 in preparation for larger scale testing in 2023-24. Under the pilot, qualifying landlords and sole traders (or their agents) can use software to keep digital records and send Income Tax updates instead of filing a Self-Assessment tax return.

The MTD regime started in April 2019 for VAT purposes only when businesses with a turnover above the VAT threshold were mandated to keep their records digitally and provide their VAT return information to HMRC using MTD compatible software. From April 2022, MTD will be extended to all VAT registered businesses with turnover below the VAT threshold of £85,000.

Source: HM Government Mon, 27 Sep 2021 00:00:00 +0100

Tax Diary October/November 2021

1 October 2021 – Due date for Corporation Tax due for the year ended 31 December 2020.

19 October 2021 – PAYE and NIC deductions due for month ended 5 October 2021. (If you pay your tax electronically the due date is 22 October 2021.)

19 October 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2021.

19 October 2021 – CIS tax deducted for the month ended 5 October 2021 is payable by today.

31 October 2021 – Latest date you can file a paper version of your 2021 self-assessment tax return.

1 November 2021 – Due date for Corporation Tax due for the year ended 31 January 2021.

19 November 2021 – PAYE and NIC deductions due for month ended 5 November 2021. (If you pay your tax electronically the due date is 22 November 2021.)

19 November 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2021.

19 November 2021 – CIS tax deducted for the month ended 5 November 2021 is payable by today.

Source: HM Revenue & Customs Mon, 20 Sep 2021 00:00:00 +0100

Find customs agent to help with import/export declarations

If you are moving goods to or from the UK then you need to ensure that you have all the correct procedures in place. This is a complex area, and you may need to consider the support of a customs agent to help with your import and / or export declarations. 

Customs declarations can be difficult and time consuming to complete.

Most businesses use a specialist such as a customs agent, broker, freight forwarder or fast parcel operator to submit import and export customs declarations on their behalf. HMRC publishes a regularly updated list of customs agents and fast parcel operators who may be able to help. The list if known as the register of customs agents and fast parcel operators. It should be noted that businesses on these lists are not vetted, approved or recommended by HMRC and proper due diligence should be used in selecting an adviser from the list. 

HMRC’s guidance is clear that if your goods do not have the right paperwork or if information is incorrect or missing, your goods may be seized and you may face delays and have to pay extra charges. 

If you are moving goods between Great Britain and Northern Ireland, the free Trader Support Service can help guide you through the necessary processes. This service can also help businesses who import goods into Northern Ireland from the rest of the world. The use of this service is optional. 

Source: HM Revenue & Customs Mon, 27 Sep 2021 00:00:00 +0100

How to best use of tax-free trivial benefits

The tax free trivial benefits exemption applies to small non-cash benefits, for example a bottle of wine or a bouquet of flowers, given occasionally to employees.

Although the benefit is defined as ‘trivial’, employers should remember that this can be an efficient way to provide small rewards and incentives to employees. As per HMRC guideline the main requirement is that the gifts are not provided as a reward for services performed or as part of the employees’ duties.

However, gifts to employees on milestone events such as the birth of a child or a marriage or other gestures of goodwill would usually qualify.

The employer also benefits as the trivial benefits do not have to be included on PAYE settlement agreements or disclosed on P11D forms. There is also a matching exemption from Class 1A National Insurance contributions.

There is no requirement to let HMRC know once the benefit meets the necessary criteria.

The tax exemption applies to trivial BiKs where the BiK:

  • is not cash or a cash-voucher; and
  • costs £50 or less; and
  • is not provided as part of a salary sacrifice or other contractual arrangement; and
  • is not provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.

The rules also allow directors or other office-holders of close companies and their families to benefit from an annual cap of £300. The £50 limit remains for each gift but could allow for up to £300 of non-cash benefits to be withdrawn per person per year.

The £300 cap doesn’t apply to other employees. If the £50 limit is exceeded for any gift, the total value of the benefit will be taxable.

If you are looking to know about tax free benefits, feel free to contact us.

Want to complain about HMRC?

Taxpayers may find themselves in a position where they need to make a complaint about HMRC’s service. Complaints can relate to many different issues such as unreasonable delays, mistakes and poor treatment by HMRC’s staff. Note, there is a separate procedure to be followed by taxpayers that disagree with a decision of HMRC or that wish to complain about serious misconduct by HMRC staff.

Taxpayers that wish to make a complaint should in the first instance write or speak to the person or office they have been dealing with. If the complaint is not resolved or the taxpayer would prefer not to discuss the issue with the person or office they have been dealing with, then a complaint can be made using an online complaint form. A complaint can also be made by phone or post.

If the response is unsatisfactory a further request can be made for the complaint to be looked at again by a different complaints handler who will take a second look at the complaint and then provide a final response. Taxpayers that are still unhappy with the response can ask the Adjudicator to look into the complaint. If they are unhappy with the Adjudicator’s decision it is possible to contact their local MP to ask for the matter to be referred to the Parliamentary and Health Service Ombudsman.

Source: HM Revenue & Customs Sun, 19 Sep 2021 00:00:00 +0100

VAT register inactivity

HMRC’s published guidance titled ‘Check genuine HMRC contact that uses more than one communication method’ has been updated. The list is intended to help taxpayers check if recent contacts purporting to be from HMRC are actually a scam.

The guidance contains a list of emails, phone calls, letters and text messages recently issued by HMRC that are genuine. The list can be useful to help taxpayers decide if a contact is genuine or from a fraudster trying to trick taxpayers into supplying confidential or personal information.

One of the most recent additions on the list concerns contact by HMRC relating to VAT register inactivity. This confirms that HMRC is contacting customers who are believed to no longer need to hold a VAT Registration Number due to recent inactivity on their VAT account. Customers may receive a phone call or email, with the email referring to VAT register inactivity.

The phone calls or emails will ask customers to confirm whether they still require to be VAT registered, and to provide some basic information on where they are trading.

The calls or emails from HMRC do not ask for personal or financial information.

Source: HM Revenue & Customs Sun, 19 Sep 2021 00:00:00 +0100

New timetable for import controls

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all other international destinations.

On 14 September 2021, a revised timetable for the introduction of full import controls was published by government. 

A number of easements had been put in place to help ensure a smooth transition for goods coming from the EU. This included a delay in the requirement for full customs declarations and controls until 1 January 2022. The timetable for this change remains as previously set out. However, safety and security declarations will now not be required until 1 July 2022.

Under the revised timetable:

  • The requirements for pre-notification of Sanitary and Phytosanitary (SPS) goods, which were due to be introduced on 1 October 2021, will now be introduced on 1 January 2022.
  • The new requirements for Export Health Certificates, which were due to be introduced on 1 October 2021, will now be introduced on 1 July 2022.
  • Phytosanitary Certificates and physical checks on SPS goods at Border Control Posts, due to be introduced on 1 January 2022, will now be introduced on 1 July 2022.
  • Safety and Security declarations on imports will be required as of 1 July 2022 as opposed to 1 January 2022. Full customs declarations and controls will be introduced on 1 January 2022 as previously announced.

It is hoped that this revised timetable will give businesses, especially those in the agri-food sector, more time to adjust for issues caused by Brexit and the global pandemic. 

Source: Cabinet Office Sun, 19 Sep 2021 00:00:00 +0100

Student tax scam warning

HMRC is warning new students starting university that they could be targeted by scammers trying to steal their money and personal details. As new students start the academic year, they can be particularly vulnerable to tax scams. This is especially prevalent if they have a part-time job and are new to interacting with HMRC. This year, there is a significant increase in the numbers of students attending university and means that more young people may choose to take on part-time work. 

Many tax scams are directly targeting university students. Fraudulent emails and texts will regularly include links which take students to websites where their information can be stolen. Between April and May this year, 18- to 24-year olds reported more than 5,000 phone scams to HMRC.

These scams often offer fake tax refunds which HMRC does not offer by SMS or email.  Students can also be approached to act as ‘money mules’, with offers of various rewards for transferring funds through their own, genuine financial accounts, inadvertently laundering criminal funds.

Commenting on the warning, HMRC’s Head of Cyber Security Operations at HMRC, said: 

‘Our advice is to be wary if you are contacted out of the blue by someone asking for money or personal information. We see high numbers of fraudsters contacting people claiming to be from HMRC. If in doubt, our advice is – do not reply directly to anything suspicious, but contact HMRC through GOV.UK straight away and search GOV.UK for HMRC scams’ .

Source: HM Revenue & Customs Sun, 19 Sep 2021 00:00:00 +0100

Government announces winter COVID plan

The Prime Minister, Boris Johnson has set out the government’s autumn and winter plan for managing Covid. 

The government is aiming to sustain the progress made and prepare the country for future challenges, while ensuring the National Health Service (NHS) does not come under unsustainable pressure.

The government plans to achieve this by:

  • Building our defences through pharmaceutical interventions: vaccines, antivirals and disease modifying therapeutics.
  • Identifying and isolating positive cases to limit transmission: Test, Trace and Isolate.
  • Supporting the NHS and social care: managing pressures and recovering services.
  • Advising people on how to protect themselves and others: clear guidance and communications.
  • Pursuing an international approach: helping to vaccinate the world and managing risks at the border.

This is known as Plan A. There are of course a number of variables that could change the expected outlook including the outbreak of new variants and other seasonal respiratory diseases such as the flu.

If the data suggests the NHS is likely to come under unsustainable pressure, the government has prepared a Plan B for England. It is hoped that this plan will not be required but the plan contains certain measures which can help control transmission of the virus while seeking to minimise economic and social impacts. 

This includes:

  • Communicating clearly and urgently to the public that the level of risk has increased, and with it the need to behave more cautiously.
  • Introducing mandatory vaccine-only COVID-status certification in certain settings.
  • Legally mandating face coverings in certain settings.
Source: HM Government Sun, 19 Sep 2021 00:00:00 +0100
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