Deal or no deal? How businesses trading with EU countries should prepare for Brexit

no deal brexit

With Britain’s departure date from the European Union fast approaching and Theresa May’s Brexit deal yet to be passed, businesses are being warned to prepare for a no deal situation. But what does this mean for businesses trading with the EU?

HMRC is advising businesses dealing with EU countries to take three steps now ahead of the Brexit implantation date on March 29

1. Register an EORI number:

Every business in the UK which currently exports goods outside the EU or imports goods from outside the EU should have an Economic Operator Registration and Identification (EORI) number. EORI is a 3-digital addition to a VAT registration number and was introduced a few years ago to speed up the passing and recording of customs export declarations.

Following Brexit, goods exported or imported from the EU, will be treated in the same way as goods departing or arriving from the rest of the world, so if businesses haven’t already got an EORI number then they need to get one.

The government’s position is that if the ‘deal agreed’ with the 27 other EU countries is passed by Parliament, broadly there will be no change in the way trade is conducted and reported between the UK and those 27 countries until 31 December 2020. But don’t assume a deal will pass parliament, or wait until the last minute to act. Registering could help your business avoid significant disruption so be sure to act now.

2. Appoint a customs agent or invest in software:

Companies need decide whether they will use a customs agent to make import and/or export declarations. If they want to make the declarations themselves, they will have to get specialist software to do this.

3. Contact your haulage firm or transport organiser:

Get in touch with the organisation that transports their goods (e.g. a haulage firm) to find out if they need to supply additional information to complete safety and security declarations, or whether they will need to submit these declarations themselves. Businesses already importing or exporting goods with countries outside the EU should already be aware (either directly or via their import or export agent) that the existing CHIEF (Customs Handling of Import and Export Freight) system is currently being replaced in phases by a new customs declaration service (called Customs Declaration Service or CDS). This is expected to be fully operational by end of March 2019.

For further information about exporting and importing, contact Pierce on 01254 688 100.

 

Making Tax Digital for business

HMRC’s new Making Tax Digital reporting system is being introduced for businesses, sole traders and landlords from April 2018. The aim is to join up HMRC’s internal systems by creating one account for each taxpayer so businesses can provide its information more accurately and closer to real time. 

In his budget speech on March 8, Philip Hammond confirmed the timescale for the compulsory entry into the Making Tax Digital scheme as follows:

  • April 2018 businesses/landlords with turnover above the VAT threshold
  • April 2019 businesses/landlords with turnover below the VAT threshold
  • April 2019 VAT registered businesses/landlords
  • April 2020 businesses liable to corporation tax
  • April 2020 partnerships with turnover above £10m

Businesses and landlords with a turnover below £10,000 will be exempt from the scheme.

So what does Making Tax Digital involve?

  • Accounting records must be kept digitally ideally using a suitable accounting package although HMRC have conceded that they will accept information kept on spreadsheets.
  • Accounting information must be reported to HMRC quarterly.
  • An annual summary must be reported including tax adjustments to accounting records.
  • A new penalty regime has been introduced for Making Tax Digital submissions although this will not be introduced straight away.

HMRC has not yet released any detailed information on Making Tax Digital but as more information is released, Pierce will provide an update.  We are currently reviewing our clients to identify who the new rules will apply to in April 2018 and will shortly be contacting those affected with advice on what they are required to do to comply.

The government will not be providing software for businesses, we can offer advice on accounting software packages for those who currently keep manual accounting records. We have a range partners with various cloud accounting software providers covering a wide cross section of the market and we can help you choose, setup and configure the best choice of software for your business.

For more information visit http://www.pierce.co.uk/cloud-accounting-software/ or contact Ben Davies on 01254 688100 or b.davies@pierce.co.uk.

Company cars – advisory fuel rates from 1 March 2014

Company cars – advisory fuel  rates from 1 March 2014

From: Ben Davies

20130830 blue fuel

These rates apply to all journeys on or after 1 March 2014 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.

Engine size Petrol LPG
1400cc or less 14p 9p
1401cc to 2000cc 16p 11p
Over 2000cc 24p 17p
Engine size Diesel
1600cc or less 12p
1601cc to 2000cc 14p
Over 2000cc 17p

Hybrid cars are treated as either petrol or diesel cars for this purpose.

20131210 Porsche zoom

These rates are calculated from the fuel prices in the tables below:

Petrol
Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Pence per mile AFR
up to 1400 51.06 43.4 129.2 587.2 13.5 14
1401 – 2000 42.24 35.9 129.2 587.2 16.4 16
over 2000 28.63 24.3 129.2 587.2 24.1 24
Diesel
Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Pence per mile AFR
Up to 1600 62.36 53.0 136.8 621.9 11.7 12
1601 to 2000 53.25 45.3 136.8 621.9 13.7 14
Over 2000 43.30 36.8 136.8 621.9 16.9 17
LPG
Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Pence per mile AFR
up to 1400 40.8 34.7 71.5 325.0 9.4 9
1401 – 2000 33.8 28.7 71.5 325.0 11.3 11
over 2000 22.9 19.5 71.5 325.0 16.7 17

Notes:

  1. Mean mpg – miles per gallon – from manufacturers’ information, weighted by annual sales to businesses (Fleet Audits average, 2010-2012).
  2. Applied mpg – adjusted downwards by 15 per cent to take account of real driving conditions and lower fuel economy for older cars.
  3. For LPG, mpg is assumed to be 20 per cent lower than for petrol due to lower volumetric energy density.
  4. Department for Energy and Climate Change latest petrol and diesel prices (17 February 2014), LPG (UK Average) from AA website (January 2014).

Will the rate per mile figures change if fuel prices go up or down?

Since March 2011 the rates have been reviewed four times a year. Any changes take effect at the beginning of each calendar quarter     – on 1 March, 1 June, 1 September and 1 December and will be published  the HM Revenue & Customs (HMRC) website shortly before the date of change.

In view of the increased frequency of review, HMRC will no longer consider changing the rates if fuel prices fluctuate by 5 per cent from the published rates.

Employers should make themselves aware of any changes by referring to this page in late February, May, August and November each year. It is the primary source of information.

VAT

HMRC will also accept the figures in the table for VAT purposes though employers will need to retain receipts in line with current legislation.

Further information is available for:

Treat your staff to a Porsche Panamera S E-Hybrid

Treat your employees for Christmas – a tongue in cheek blog from:

Ben Davies

Treat your staff Porsche Panamera S E-Hybrid

20131210 Porsche pic

Boost staff moral whilst reducing your tax bill and saving the environment in one fell swoop.  Too good to be true you may think?  Not anymore with Porsche’s new offering in the shape of the new Porsche Panamera S E-Hybrid.

Whilst the new Porsche has a 3.0 litre V6 engine it is a hybrid vehicle and is capable of running for up to 22 miles at up to 84mph on battery power with the throaty V6 to fall back on when the battery runs out.  As a result of this it’s official CO2 emission is only 71g/km.

20131210 Porsche zoom

As this hybrid car qualifies as an Ultra-Low Emission Vehicle with CO2 emissions of only 71g/km the tax benefits are not to be sniffed at.  Buy one of these cars for your employees and not only will the business get 100% capital allowances in the year of purchase but the resulting benefit in kind will be taxed at only 5% of the vehicle’s list price.

You will also be eligible to apply for the £5,000 Government grant towards the cost of the car as this is a plug-in hybrid vehicle that meets the Ultra-Low Emission Vehicle criteria.

Below is a quick comparison of the costs of the Porsche against a couple of its competitors:

Porsche

Panamera S E Hybrid

Range Rover

Vogue SE

BMW

5-Series M Sport Active Hybrid

List Price

£89,000

£83,000

£51,000

Fuel Consumption (mpg)

91.1

32.5

40

CO2 (g/km)

71

229

163

Benefit in Kind* (2013/14)

£4,450

£29,050

£12,240

Tax Payable (at 40%)

£1,780

£11,620

£4,896

Capital Allowances (in first year**)

£89,000

£8,300

£5,100

 

* Excluding benefit in kind for private fuel

** Assuming that the car is purchased rather than a lease or lease finance.

 

HMRC offer chance to come clean on rental income

HMRC offer chance to come clean on rental income

By: Ben Davies

20130926 HMRC logo PF-hmrc-logo_1379417f

HM Revenue and Customs (HMRC) have recently opened a new scheme to encourage residential property landlords to come clean voluntarily about any undisclosed rental income and put their tax affairs straight before HMRC finds them.

Buy to let properties - 78009726CF001_PARAGON SHARES

Up to 1.5 million residential property landlords may be underpaying their UK tax every year, says HMRC. This amounts to a total unpaid tax bill of £500 million.

Under the new Let Property Campaign landlords who may owe tax either through misunderstanding of the rules, or deliberate evasion, can come forward and tell HMRC about any unpaid tax on rents.  Whilst there will still be interest and penalties due on any tax owed, by coming forward voluntarily the penalty will be lower than if HMRC raises an enquiry.

20130930 closed

No closing date has yet been set for the scheme but we have been told that it will remain open for at least 18 months

HMRC has also stated that they will use the information that they hold on their digital intelligence system Connect to identify people who have not paid what they owe and for those that fail to come forward voluntarily, higher penalties, or even criminal prosecution could follow.

https://www.gov.uk/renting-out-a-property/paying-tax

For more details, visit HMRC’s website:

https://www.gov.uk/government/policies/reducing-tax-evasion-and-avoidance/supporting-pages/hmrc-campaigns

20130930 HMRC's most wanted s300_Most_Wanted_2013_1_2

HMRC’s most wanted: gallery of tax fugitives

From the HMRC Website s follows:

The results of HMRC campaigns

Since 2007, HMRC campaigns have collected over £552 million in tax from people coming to us, and over £224 million from a large number of follow-up activities. There are a number of criminal investigations underway and seven people have been convicted already, with custodial sentences handed out of up to two years. Those convicted have between them had to pay over £550,000.

Campaign

Revenue as    of 31 July 2013

VAT Initiative   Campaign £19,843,000
Value Added Tax   Outstanding Returns £70,000
Tax Return   Initiative £80,214,000
Tax Health Plan £53,697,000
Tax Catch Up Plan £1,248,000
Plumbers Tax Safe   Plan £9,603,000
Electricians Tax   Safe Plan £1,285,000
Direct Selling £252,000
E-Marketplaces £3,762,000
Property Sales   Campaign £TBA
My Tax Return Catch   Up £TBA
Offshore Disclosure   Facility £508,590,000
Offshore New   Disclosure Opportunity £124,300,000
TOTAL £802,864,000

Current HMRC campaigns

My Tax Return Catch Up Plan

This campaign is for people who have received a tax return or notice to file a return for years up to and including 2011-12 and who have not acted. People have until 15 October 2013 to file all their outstanding tax returns and pay what they owe. After that, HMRC will take a much closer look at their tax affairs. By using this campaign to come forward, customers will receive the best terms available.

Read more about the My Tax Return Catch Up Plan.

Let Property Campaign

This campaign targets the residential property letting market and offera a chance for landlords in this sector to get up to date or put right any errors they have made and then remain compliant.

Find out more about paying tax when renting out property or call the Let Property Campaign Hotline between 9 am and 5 pm Monday to Friday on 03000 514479.

Planned future HMRC campaigns

Health & Wellbeing Campaign

A campaign focussed on health professionals. HMRC has already identified more than 20 healthcare professions (other than doctors or dentists – see the separate Medics Tax Health Plan below) that are likely to be included. The campaign launches in autumn 2013.

Past HMRC Campaigns

Property Sales Campaign

The Property Sales campaign is a chance for people to bring their tax up to date if they have sold a residential property, in the UK or abroad, that’s not their main home. If people made a profit but have not told HMRC, they might not have paid the right amount of tax. To take advantage of the best possible terms people needed to have voluntarily disclosed income or gains and to have paid what they owed by 6 September 2013.

The disclosure deadline has now passed and our follow up compliance work focussed on those who should have come forward is underway. Although the terms on offer during the disclosure are no longer guaranteed, it will still be better for anyone who has something to tell us about to come forward.

Direct Selling campaign

The Direct Selling campaign gave people involved in direct selling, who had not told HM Revenue & Customs (HMRC) about all of their income, a chance to bring their tax up to date on the best possible terms. Direct selling is where people sell directly to customers usually door to door or in customers’ homes or the workplace.

The voluntary disclosure opportunity offered as part of the Direct Selling campaign closed on 28 February 2013. Cases are now being considered for follow-up action.

VAT Outstanding Returns campaign

The VAT Outstanding Returns campaign was a chance for those who ere registered for VAT, but had not sent in all of their VAT Returns, to bring their VAT Returns and payments up to date on the best possible terms.

The voluntary opportunity offered as part of the VAT Outstanding Returns campaign closed on the 28 February 2013. The identification of cases suitable for compliance checks and criminal investigation is ongoing.

Tax Return Initiative

The Tax Return Initiative was aimed at higher rate tax paying individuals who had been sent a Self Assessment (SA) tax return, or had been told they should send one in, but had not submitted a return.

The Tax Return Initiative voluntary disclosure opportunity closed on 2 October 2012. HMRC is following up against those targeted in this campaign who chose not to take part. This includes issuing estimates of the amount of tax owed and collecting payment through court action or by using a debt collection agency.

e-Marketplaces campaign

The e-Marketplaces campaign was a chance for those who use electronic marketplace websites to buy and sell goods as a trade or business, but who had not paid what they owe, to bring their tax affairs up to date on the best possible terms.

The voluntary disclosure opportunity offered as part of the e-marketplaces campaign (e-MDF) closed in September 2012. HMRC is successfully continuing to use the data gathered to support the campaign to identify those who should have come forward but chose not to. HMRC are looking for cases suitable for investigation.

Tax Catch Up Plan for tutors and coaches

The Tax Catch Up Plan is for those who provide private tuition, instruction and coaching, either as a main or as a secondary income – which they choose not to tell HMRC about. Whilst the time limited voluntary disclosure opportunity closed on 31 March 2012 it is still better to come forward to HMRC as we continue to look for cases suitable for investigation

The VAT Initiative

The VAT Initiative campaign focused on individuals and businesses operating at or above the VAT threshold who had not registered for VAT. Those that came forward were given help by HMRC to pay what they owe and to claim VAT repayments. HMRC continues to help those that came forward to get their affairs in order.

HMRC continues to follow up on those businesses where the information held suggests that the VAT turnover threshold had been exceeded. This could lead to the compulsory registration of businesses and a possible ‘failure to notify’ penalty of up to 100 per cent of the VAT due.

Electricians’ Tax Safe Plan

The Electricians Tax Safe Plan was an opportunity for people who install, maintain and test electrical systems, equipment and appliances, who had not told HMRC about all their income in the past, to bring their tax affairs up to date on the best possible terms.

The voluntary disclosure opportunity closed in August 2012.

Plumbers’ Tax Safe Plan

The Plumbers Tax Safe Plan was a chance for people working as plumbers, gas fitters, heating engineers and associated trades, who had not told HMRC about all their income in the past, to bring their tax affairs up to date on the best possible terms.

The voluntary disclosure opportunity closed in August 2011. As at 30 June 2012, six plumbers have been convicted with more expected to follow.

Medics Tax Health Plan

The Medics Tax Health Plan first offered a voluntary opportunity for doctors and dentists, with tax to pay, to get their affairs up to date with the benefit of a fixed penalty.

The voluntary opportunity closed in June 2010. The disclosures included one individual payment of over £1 million by a doctor and one of over £300,000 by a dentist. Our risk and intervention programme is ongoing so for those who need to it is still better to come forward to HMRC.

New (offshore) Disclosure Opportunity

The New Disclosure Opportunity was designed to provide one final chance for UK based individuals and businesses, with unpaid tax linked to an offshore account or asset, to make a disclosure and put their affairs in order. 15 individual payments over £500,000 four of which were in excess of £1 million.

The New (offshore) Disclosure Opportunity was open to those with any offshore interest, assets or accounts. Data from financial institutions was provided and HMRC has used this and other information to open thousands of enquiries.

Offshore Disclosure Facility

The Offshore Disclosure Facility was the first HMRC campaign and ran between April and November 2007.

The Offshore Disclosure Facility was based on data obtained from five major UK financial institutions. Like the New (offshore) Disclosure Opportunity, it gave people or businesses with unpaid tax connected to an offshore account or asset an opportunity to make a full disclosure of liabilities and to pay duties, interest and penalties due.

The campaign was the first of its kind and provided information and understanding of the way offshore accounts and assets were used that was carried into the first full offshore campaign (the New (offshore) Disclosure Opportunity) covering all institutions offering offshore facilities to UK based entities. After the ODF HMRC made follow up enquiries, mainly based on data gathered following a successful application for notices on five major UK financial institutions.

As well as thousands of investigations, there has also been one conviction.

 

 

 

 

Child Benefit Warning for Higher Income Families

Child Benefit Warning for Higher Income Families

20130916 ChildBenefit_Getty_w

From:  Ben Davies

HM Revenue & Customs are now sending reminders to parents on higher incomes who are still receiving Child Benefit that they should register for Self Assessment if they have not already done so.

20130916 o-CHILD-BENEFIT-CHANGES-570-300x198

Parents with incomes of over £50,000, who have continued to receive Child Benefit and are not already in the Self Assessment system should register by 5 October 2013 to avoid any penalties.

Reminders are currently being sent out to over 2 million taxpayers according to HM Revenue & Customs but we can be fairly sure that there will be some who do not receive the reminder.

If your income is over £50,000 and you or your partner have received Child Benefit in the year to 5 April 2013 you will need to complete a Self Assessment Tax Return for the 2012/13 tax year.

Check whether the tax charge applies and register.

Contact Pierce for more details.

Reaping Tax Benefits of Green Technology

Reaping Tax Benefits of Green Technology

by:   Ben Davies

20130910 Green Tax image imagesCA1QLDPT

Over the last few years Government, in a push to reduce global emissions, has introduced numerous incentives for businesses to improve green credentials.  Schemes such as the Feed In Tariff (FIT) and Renewable Heat Incentive (RHI) were both introduced to encourage the adoption of renewable energy sources.  Enhanced Capital Allowance (ECA) schemes were created to encourage businesses to use more efficient plant, machinery and vehicles.

Taking advantage of these incentives may not only reduce your ongoing operational costs but could help to improve your Corporate Social Responsibility (CSR) image.

Feed In Tariff

20130910 Light bulb with tree green-technology-header-2

The FIT was introduced in April 2010 and will pay you for the generation of your own green electricity.  It is currently available for the following types of electricity generation equipment producing fewer than 5 Megawatts:

  • Solar electric photovoltaic’s (PV)
  • Wind power
  • Anaerobic digestion to produce biogas for electricity generation
  • Hydro-electric power (including tidal mills and locks)
  • Small-scale gas-powered combined heat and power up to 2kW

In addition to a reduction in your electricity bill, the FIT pays you for all of the electricity generated, even if you use it yourself, with a bonus payment for any electricity exported to the National Grid.

If used within the business the equipment will also be eligible for tax relief under the Capital Allowance regime at either 8% or 18% per annum depending on the type of generation equipment used.

Renewable Heat Incentive

In November 2011 the RHI also was introduced as a financial incentive for the generation of renewable heat.  For the non-domestic sector it provides a subsidy, payable for 20 years, to eligible renewable heat generators and producers of biomethane.

The RHI is broadly available on the following technologies:

  • Solid Biomass
  • Ground-source heat pumps
  • Water-source heat pumps
  • Geothermal
  • Solar thermal
  • Biogas combustion
  • Biomethane injection

As well as reducing your heating cost and receiving the RHI subsidy if used in the business the equipment will also be eligible for Capital Allowances at either 8% or 18%.  Where the RHI is received for Combined Heat & Power equipment 100% Capital Allowances can be claimed in the year of purchase until 1 April 2014.

Further information on the eligibility criteria for the FTI and RHI can be found at http://www.energysavingtrust.org.uk

Low Emission Vehicles

20130910 electric-charging-car

In April 2002 100% Capital Allowances were introduced for new (unused) cars with low CO2 emissions (currently set at below 95g/km) and then became available for unused zero emission goods vehicles from April 2010

Enhanced Capital Allowances

Certain plant and machinery which has been specifically certified as energy or water saving is eligible for Enhanced 100% Capital Allowances.  The various categories of products which can be certified as eligible for the enhanced capital allowances are:

  • Air to air energy recovery
  • Automatic monitoring and targeting equipment
  • Boiler equipment
  • Combined heat and power (CHP)
  • Compressed air equipment
  • Heat pumps
  • Heating, ventilation and air conditioning (HVAC) equipment
  • High speed hand air dryers
  • Lighting
  • Motors & drives
  • Pipework insulation
  • Refrigeration equipment
  • Solar thermal systems
  • Uninterruptible supplies
  • Warm air radiant heaters

The complete list of approved products is available at http://etl.decc.gov.uk/etl/site/etl/browse-etl.html

If you would like any further information on these incentives please do not hesitate to contact our tax department.

New Advisory Fuel Rates Announced by HMRC

New Advisory Fuel Rates Announced by HMRC

20130830 blue fuel

by: Ben Davies

H M Revenue and Customs have released the new Advisory Fuel Rates (AFRs) to be used from 1 September 2013 until further notice.

Engine Size Petrol LPG
1400cc or less 15p 10p
1401cc to 2000cc 18p 11p
Over 2000cc 26p 16p

 

Engine Size

Diesel

1600cc or less

12p

1601cc to 2000cc

15p

Over 2000cc

18p

The AFRs are used where an employee is reimbursed for business mileage travelled in a company car.

Theses rates are usually reviewed four times a year and the most up to date rates can be found on the H M Revenue & Custom’s website at http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

Contact our tax department for further details.