Welcome to the September 2018 Newsletter from Certax Accounting in Catford & Lewisham
The government has released the first batch in a series of ‘no deal’ Brexit advisory documents, with the stated aim of helping businesses and individuals to prepare in the event that the UK exits the EU without an agreed deal.
Meanwhile, with the introduction of Making Tax Digital (MTD) drawing ever closer, HMRC has published a new Notice which includes further information on the ‘digital links’ that businesses will be required to have in place.
Government publishes ‘no deal’ Brexit advice
The government has released the first batch in a series of ‘no deal’ Brexit technical notices, with the stated aim of helping businesses and individuals to make preparations in the event of a UK-EU agreement not being realised.
Publishing the first 25 notices, Brexit Secretary Dominic Raab was keen to emphasise that reaching a deal remains the ‘overriding priority’. However, until a Withdrawal Agreement is ratified by the UK and European Parliaments, the possibility of the UK leaving the EU without a deal on 29 March 2019 remains.
The 25 documents cover a range of different areas, including medicine, imports and exports, financial services, farming and workplace rights.
The technical notice on human medicines confirms that the UK will continue to accept new medicines tested in the EU, and advises pharmacists to stockpile additional medicine in order to avoid any supply issues.
Meanwhile, the government advises businesses trading with the EU to begin planning for new customs checks, and also warns that the cost of card payments between the UK and the EU is likely to increase.
Business groups have responded to the publication of the first batch of notices.
The British Chambers of Commerce (BCC) criticised the government for making UK businesses ‘wait too long’ for answers to ‘basic’ Brexit questions. Its Director General, Dr Adam Marshall, said: ‘No deal preparations should have happened far earlier, and the onus is on the government to move quickly and give businesses as much detailed, technical information as possible to avoid significant disruption in any scenario.’
Meanwhile, the Confederation of British Industry (CBI) welcomed the publication of the notices. Josh Hardie, Deputy Director General at the CBI, said: ‘It’s right and responsible that the government has supplied information to businesses on issues from financial services passporting to food labelling, all of which will help lower the risks of the harshest outcomes from a ‘no deal’ Brexit.’
The government will publish further technical notices in September. However, businesses and individuals are advised to seek professional advice on their individual circumstances.
Revenue publishes further information on Making Tax Digital requirements
HMRC recently published VAT Notice 700/22, giving taxpayers more information on the ‘digital links’ required as part of its Making Tax Digital for VAT (MTD for VAT) initiative, and mandating a ‘soft landing’ period for taxpayers who may struggle with the IT demands associated with MTD.
When MTD for VAT comes into effect from 1 April 2019, businesses with a taxable turnover above the VAT registration threshold (currently £85,000) will be required to keep their records in a digital format.
Businesses will also need to file their VAT returns digitally using Application Programming Interface (API)-enabled software, and not through HMRC’s current portal.
HMRC will allow a ‘soft landing’ period for businesses to ensure they have digital links in place between their MTD for VAT software programs. The Revenue also confirmed that, for the first year of mandation, businesses will not be required to have digital links between software programs in place.
The Notice states that a digital link is ‘an electronic or digital transfer or exchange of data between software programs, products or applications’. HMRC will accept digital links as:
linked cells in spreadsheets
emailing a spreadsheet with digital records to an agent so that they can import the data into software in order to carry out a calculation (such as for partial exemption)
transferring digital records to a portable device, such as a USB stick, to give to an agent to import into their software
XML and CSV import and export, and the download and upload of files
automated data transfer
API transfer.
The Notice also states that ‘the use of cut and paste does not constitute a digital link’.
HMRC will not supply MTD for VAT software for taxpayers to file their VAT returns, but has provided a list of software providers who have developed MTD-compatible programs. This list will be updated over time, as more software providers develop MTD for VAT-compatible software programs.
QUOTE OF THE MONTH
‘We are delighted with the huge public response to the Treasury’s recent call for evidence on how the tax system could be used to reduce plastic waste, which many of our supporters responded to.’
Hugo Tagholm, CEO of marine conservation charity Surfers Against Sewage, commenting on the news that the government is considering introducing a ‘tax on plastic waste’ at the 2018 Budget.