February 2021 | DSK Partners LLP

Guidance for paying deferred VAT updated

Posted on February 18, 2021 by Ketan Umretiya

The coronavirus VAT payment holiday gave businesses the chance to defer the payment of any VAT liabilities between 20 March 2020 and 30 June 2020. The option for businesses to defer their VAT payments ended on 30 June 2020.

There are two options available for repaying this VAT.

The first option is to pay the deferred VAT in full on or before 31 March 2021. No interest or penalties will accrue on deferred payments that are paid by the new due date and there is no requirement to contact HMRC.
The second option is to further defer the amount of VAT due. The VAT deferral new payment scheme will allow businesses the option to pay the deferred VAT in smaller payments over a longer period. Instead of having to repay the full amount by 31 March 2021, businesses will now be able to make smaller interest-free payments during the 2021-22 financial year and thus complete payment of the VAT due by 31 March 2022.

HMRC has now confirmed that the VAT deferral new payment scheme will be open from 23 February up to and including 21 June 2021. Nearly all businesses are expected to use HMRC’s online service to sign up. VAT registered businesses will need to opt in to the scheme and will not be able to use an agent to do this.

The new scheme will allow businesses to pay their deferred VAT in instalments without adding interest and select the number of equal monthly instalments from 2 to 11 (depending on when they join the scheme). Businesses will need to sign up by 19 March 2021 to benefit from the maximum number of instalments. Businesses must also meet certain conditions to use the scheme including being up to date with their VAT returns.

Anyone using the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, will be invited to join the new payment scheme later in March 2021.

Source: HM Revenue & Customs Wed, 17 Feb 2021 00:00:00 +0100

Simplified export declarations

Posted on February 18, 2021 by Ketan Umretiya

Following the end of the Brexit transition period, businesses need to make customs declarations when exporting goods to the EU as well as to the rest of the world. Businesses can make customs declarations themselves or hire a third party such as a courier, freight forwarder or customs agent.

Businesses can use simplified export declarations to help export most goods. The use of simplified export declarations allows businesses to export goods out of the UK by providing basic details to HMRC. This is usually done electronically. Once the goods for export are cleared, they can then be exported without needing to present any supporting documents.

To use simplified declarations for exports, authorisation is required from HMRC. If you are thinking of applying you need to:

have a good customs compliance record, including VAT returns and duty deferments
have a regular pattern of customs declarations against their Economic Operator Registration Identification (EORI) number
show how they will record all declarations for no less than four years after their submission date
have access to the Customs Handling of Import and Export Freight (CHIEF) system. The Customs Declaration Service will eventually replace CHIEF.

Businesses are still required to complete a more detailed customs declaration known as a supplementary declaration, but this can be done at a later point in time.

Source: HM Revenue & Customs Wed, 17 Feb 2021 00:00:00 +0100

Added protection for pension savers

Posted on February 18, 2021 by Ketan Umretiya

The new Pensions Scheme Act received Royal Assent on 11 February 2021. The Act covers a number of important pensions-related issues and has faced a long journey through parliament, starting in October 2019, that included delays due to both Brexit and the coronavirus pandemic.

The Act has been described by government as ‘the biggest shake-up of UK pensions for decades. The Act will provide for enhanced powers for the Pensions Regulator, including the power to impose civil penalties of up to £1 million and three new criminal offences.

One of new criminal offences, that could result in up to seven years in prison, will target bosses who run pension schemes into the ground, or plunder pots to line their own pockets. This is expected to strengthen the regulators’ powers to take efficient and timely actions to protect members’ hard-earned savings.

The legislation also introduces a new pensions dashboard creating one single platform to access and review pension pots, and the creation of new style collective defined contribution (CDC) schemes. CDCs have the potential to increase returns for millions, whilst being more sustainable for both workers and employers.

The Act also aims to ensure that pensions help with climate change governance by moving towards a net zero future through climate risk reporting.

The measures in the Act will come into force at different times as secondary legislation is introduced.

Source: Department for Work & Pensions Wed, 17 Feb 2021 00:00:00 +0100

Marriage Allowance tax break

Posted on February 18, 2021 by Ketan Umretiya

If you are entitled to the marriage allowance and have not yet applied, then you could receive a payment of up to £1,188 from HMRC. HMRC used the occasion of Valentine’s Day to remind couples to make a claim.

The marriage allowance is available to qualifying married couples and those in a civil partnership where a spouse or civil partner is a non-taxpayer i.e., has an income below their personal allowance (currently £12,500). The allowance permits the lower earning partner to transfer up to £1,250 of their personal tax-free allowance to their spouse or civil partner. The marriage allowance can only be used when the recipient of the transfer (the higher earning partner) does not pay more than the basic 20% rate of Income Tax. This would usually mean that their income is between £12,500 to £50,000 for 2020-21. The limits are somewhat different if you live in Scotland.

If you meet the eligibility requirements and have not yet claimed the allowance, then you can backdate your claim. If you claim now you can backdate your claim for up to four years as well as claim for the current tax year. This could result in a total tax break of up to £1,188 for 2016-17, 2017-18, 2018-19, 2019-20 as well as the current 2020-21 tax year. The deadline for backdating an eligible claim to 2016-17 is 5 April 2021.

Source: HM Revenue & Customs Wed, 17 Feb 2021 00:00:00 +0100

Month: February 2021

Guidance for paying deferred VAT updated

Simplified export declarations

Added protection for pension savers

Marriage Allowance tax break

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