Welcome to the October 2020 Newsletter from Certax Accounting
HMRC has advised VAT-registered businesses to start preparing now for changes to EU trading rules set to come into effect from 1 January 2021.
Meanwhile, business groups, including the Confederation of British Industry (CBI) and the Association of Independent Professionals and the Self-Employed (IPSE) have welcomed the government's announcement of cash grants for businesses affected by local coronavirus (COVID-19) lockdowns.
HMRC urges VAT-registered businesses to prepare for Brexit trading changes
HMRC has written to VAT-registered businesses that trade with the EU outlining how they should prepare for Brexit trading changes set to take effect from 2021.
The letters have been sent to VAT-registered businesses in Great Britain trading with the EU, or with the EU and the rest of the world.
From 1 January 2021, the UK will operate a full, external border with the EU. From this date, businesses will be required to submit declarations when importing and exporting goods that are categorised as 'controlled'.
Import controls for non-controlled goods will be introduced in three stages in January, April and July.
The letters outline what businesses need to do to prepare for new processes for moving goods between the UK and the EU from 1 January 2021. Businesses are urged to ensure they have a UK Economic Operator Registration and Identification (EORI) number, and have been advised to decide how they will make customs declarations. From 1 January 2021, businesses will be able to use postponed VAT accounting to account for import VAT on their VAT Return for goods imported from anywhere in the world.
HMRC has also urged businesses to check if their imported goods are eligible for staged import controls.
Further advice on how to prepare can be found here.
Lockdown grants welcome but more support needed, say business groups
The government's announcement of new cash grants for businesses affected by local lockdowns has been welcomed by business groups, including the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB).
Businesses in England that are required to shut because of a local lockdown will be able to claim up to £1,500 per property every three weeks. However, both the CBI and the Association of Independent Professionals and the Self-Employed (IPSE) have warned that more targeted help is still required.
Annie Gascoyne, Director of Economic Policy at the CBI, said: 'New direct cash grants will certainly help small businesses if their area falls under new restrictions to protect public health. But the impact of COVID-19 is still hurting businesses, so the government will need to look at more targeted support in the autumn. That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September.'
Andy Chamberlain, Director of Policy at IPSE, commented: 'We welcome the fact the government is supporting businesses affected by local lockdowns. However, although this will help some self-employed people with business premises, it will leave the great majority out in the cold.'
Meanwhile, the FSB said the grants are 'much-needed additional financial lifelines' for businesses most affected by COVID-19. Mike Cherry, National Chairman of the FSB, said: 'We look forward to working together with local government to make sure there is a straightforward claims process for all firms affected.'