SMEs needing advice on imports and exports can apply for grants, HMRC confirms

Small and medium-sized enterprises (SMEs) requiring advice on imports and exports will be able to apply for a grant of up to £2,000, HMRC has confirmed.

HMRC recently published guidance on the grants available to SMEs under the government’s SME Brexit Fund. As part of the scheme, businesses with up to 500 employees and a turnover of up to £100 million will be entitled to apply for a grant of up to £2,000 to pay for professional advice or employee training.

The grants are designed to help businesses that are new to importing or exporting goods meet customs, excise and import VAT requirements. To be eligible for a grant, a business must have been established in the UK for at least 12 months and is required to have met all its tax and customs obligations.

Businesses will need to outline that they are new to importing or exporting and that they are UK established.

The guidance also states that the grants can be used to pay for professional importing and exporting advice.

More information can be found here.

For more information, visit our website at http://www.nhllp.com

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VAT Deferral ‘Opt-In’ Scheme

HMRC has now provided further detailed guidance notes on your payment options for VAT that was deferred in 2020.

The original deferral scheme was introduced to assist businesses that are VAT registered. With this, there was the proposal that those businesses did not have to make a payment with their VAT return during the VAT periods ending between 20th March and 30th June 2020.

The new payment scheme extends this original deferral and is now open until 21st June 2021.

You will need to use your Government Gateway access to join the scheme – we cannot do this on your behalf.

You will be invited to join the new payment scheme later in March 2021, if you are on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme. 

It is important to note that this new scheme allows your business to:

  • Pay its deferred VAT in equal instalments
  • Will be interest-free
  • Choose the number of instalments, from two to eleven (depending on when you join).

In order to use the online service, businesses and sole traders registered for VAT must:

  • Join the scheme yourself
  • Still have deferred VAT to pay
  • Be up to date with your VAT returns
  • Pay the first instalment when you join
  • Pay instalments by direct debit (if want to use the scheme but cannot pay by direct debit, there’s an alternative entry route for you)

For any further information, please consult HMRC’s website HERE

Alternatively, if further guidance is needed on any information mentioned above, please do not hesitate to contact us by calling on 01753 888211 or emailing info@nhllp.com

As ever, we are here to help.

Online service for VAT deferral scheme opens

Over half a million businesses that deferred VAT payments last year can now join the new online VAT Deferral New Payment Scheme to pay it in smaller monthly instalments, HMRC has announced.

To take advantage of the new payment scheme businesses will need to have deferred VAT payments between March and June 2020 under the VAT Payment Deferral Scheme. They will be given the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021.

Businesses will need to opt-in to the VAT Deferral New Payment Scheme. They can do this via the online service that opened on 23 February and closes on 21 June 2021.

Commenting on the scheme, Jesse Norman, Financial Secretary to the Treasury, said: ‘The government has provided a package of support worth over £280 billion during the pandemic to help protect millions of jobs and businesses.

‘This now includes the VAT Deferral New Payment Scheme, which will help provide businesses with the breathing space they may need to manage their cashflows in the weeks and months ahead.’

For more information, as ever, visit our website at http://www.nhllp.com

Late payment penalties for self assessment waived until 1 April

Self assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April, HMRC has announced.

The payment deadline for self assessment is 31 January and interest is charged from 1 February on any amounts outstanding.

Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, because of the impact of the coronavirus (COVID-19) pandemic, HMRC is giving taxpayers more time to pay or set up a payment plan.

Taxpayers can pay their tax bill or set up a monthly payment plan online and are required to do this by midnight on 1 April to prevent being charged a late payment penalty. The online Time to Pay facility allows taxpayers to spread the cost of their self assessment tax bill into monthly instalments until January 2022.

Jim Harra, HMRC’s Chief Executive, said: ‘Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments. Support is available at GOV.UK to help anyone struggling to meet their obligations.’

If you require further guidance on self assessment please contact us.

For more information, as ever, visit our website at http://www.nhllp.com

More support needed to help businesses once lockdown lifts

Business groups have called on the government to extend its coronavirus (COVID-19) support through to the end of the roadmap for lifting lockdown restrictions.

The roadmap will see all pupils in England’s schools return to class from 8 March. Meanwhile, shops, hairdressers, gyms and outdoor hospitality, as well as self-contained holiday accommodation, can re-open on 12 April. From 17 May cinemas, museums and hotels will also re-open.

The final step from 21 June will potentially see all legal limits on social contact removed.

Tony Danker, Director General of the Confederation of British Industry (CBI), said: ‘We now need to turn this roadmap into genuine economic momentum. The Budget is the second half of this announcement extending business support in parallel to restrictions will give firms a bridge to the other side.

‘This is particularly needed for sectors who will have to wait for up to three months to re-open and have an anxious ten days ahead before the Budget.’

Natalie Gasson-McKinley, Development Manager at the Federation of Small Businesses (FSB), said: ‘The Chancellor must deliver on the Prime Minister’s ‘whatever it takes’ pledge at next week’s Budget. On one side of the coin we have continued restrictions – on the other, we need corresponding business support.

‘Whatever it takes means bringing those overlooked by current support measures into the fold, including suppliers, directors and the newly self-employed. Upwards of a million small business owners and sole traders are currently receiving no direct help whatsoever.’

For more information, as ever, visit our website at http://www.nhllp.com

Domestic VAT reverse charge comes into effect on 1 March

The twice-delayed introduction of the domestic VAT reverse charge for construction services will come into effect on 1 March 2021.

The change was originally scheduled to come into effect from 1 October 2019 but was deferred for 12 months after industry bodies highlighted concerns about the lack of preparation and the impact on businesses.

It was put back another five months due to the impact of the coronavirus (COVID-19) pandemic on the sector. The change will now apply from 1 March 2021 and will overhaul the way VAT is payable on building and construction invoices as part of a move to reduce fraud in the sector.

Under the domestic reverse charge, the customer receiving the service will have to pay the VAT owed straight to HMRC instead of paying the supplier if they report via the Construction Industry Scheme (CIS).

An amendment to the original legislation has made it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their subcontractors, in writing, that they are end users or intermediary suppliers.

HMRC said the additional amendment is designed to make sure both parties are clear in regard to whether the supply is excluded from the reverse charge. It reflects recommended advice published in HMRC guidance and brings certainty for subcontractors as to the correct treatment for their supplies.

For more information, as ever, visit our website at http://www.nhllp.com

SME service for bank complaints goes live

A new service designed to resolve disputes between eligible small and medium-sized enterprises (SMEs) and participating banks has gone live.

The Business Banking Resolution Service (BBRS) has been established following the Simon Walker Review on the small business complaints landscape.

It will use alternative dispute resolution techniques to settle unresolved complaints from larger SMEs with seven participating banks who make up the majority of the business banking market.

There will be an awards limit of £350,000 for historic claims and a £650,000 limit for future claims. The intention is to move to a default position whereby the full amount of any claim should be paid without limit.

The BBRS has engaged the Centre for Effective Dispute Resolution (CEDR) to provide flexible case-handling capacity to support the delivery of the service alongside the BBRS’ own in-house team.

Martin McTague, National Vice Chairman of the Federation of Small Businesses (FSB), said: ‘Access to finance will be absolutely critical to small firms as the economy recovers. That’s why it’s been worrying to see some stuck between a rock and a hard place where redress is concerned: too big for the Financial Ombudsman Service, too small for the courts.

‘We believe the BBRS can provide a meaningful option for these firms in future. Delivery is key, and we’ll work closely with the service to ensure it is fulfilling its function effectively.’

For more information, as ever, visit our website at ww.nhllp.com

OFF-PAYROLL RULES – HMRC’S BRIEFING

The IR35 issue briefing on HMRC’s compliance approach was released on Tuesday as part of the department’s effort to ensure compliance with the new off-payroll working rules.

Changes to the off-payroll working rules (also known as ‘IR35’) apply from 6 April 2021.

Organisations that need to comply with the rules include:

  • public sector authorities which engage contractors who work through their own limited company or other intermediary
  • medium and large-sized private sector organisations which engage contractors who work through their own limited company or other intermediary
  • employment agencies and third parties which supply contractors

This briefing explains the approach that HMRC will take for new compliance activity for the changes to the off-payroll working rules from 6 April 2021.

This briefing is not intended to outline the compliance approach for contractors who work through their own limited company or other intermediary (including where they are outside the off-payroll working rules). HMRC will apply the principles set out in ‘Ensuring the correct tax is paid’ and will work with contractors to get their tax right.

For more information, visit HMRC’s website HERE.

HMRC clarifies off-payroll rules

HMRC has published a briefing on its approach to the changes to off-payroll working rules, commonly known as IR35, which will be introduced on 6 April 2021.

Reiterating its advice from last year, HMRC has confirmed that it will not issue penalties for inaccuracies in the first 12 months of the regime, unless there is evidence of deliberate non-compliance.

HMRC also confirmed that it will not use information it receives under the expanded regime to open new compliance enquiries into returns for tax years before 2021/22, unless there is reason to suspect fraud or criminal behaviour.

The new tax rules will see the extension to medium and large organisations in the private sector. These reforms will shift the responsibility for assessing employment status to medium and large organisations employing individuals.

A spokesperson for HMRC said: ‘The publication explains how we will continue to support organisations to comply with the off-payroll working rules once they take effect on 6 April 2021. It also shows what HMRC will do to identify and step in where organisations deliberately try to avoid paying what is due under the rules.

‘This builds on our existing commitments to a supportive approach to help organisations comply with the new rules.’

For more information, as ever, visit our website at http://www.nhllp.com

IFS urges Chancellor to outline economic recovery plans in upcoming Budget

The Institute for Fiscal Studies (IFS) has urged Chancellor Rishi Sunak to use the upcoming Budget to set out plans for an economic recovery from the coronavirus (COVID-19) pandemic.

The IFS expects the Budget to outline additional spending to support businesses and individuals affected by the pandemic. The business group stated that it should also focus on supporting the recovery as restrictions are eased.

In its Budget submission, the IFS said that the Chancellor needs to announce ‘well-targeted extensions in emergency support to households and employers’ over the coming months. He also needs to set out plans for how the UK economy will adjust to the ‘new normal’, the IFS said.

‘This will be just Rishi Sunak’s second Budget, but his 15th major fiscal announcement,’ said Paul Johnson, Director of the IFS.

‘In it he needs to strike a balance between continuing support for jobs and businesses harmed by lockdowns, and weaning the economy off blanket support which will impede necessary economic adjustment. Any significant continuation of the furlough scheme must be limited and carefully targeted.’

The 2021 Budget will be delivered on Wednesday 3 March.

For more information, as ever, visit our website at http://www.nhllp.com