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Month: September 2022

The Customs Declaration Service

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Businesses importing goods must submit import declarations from 1 October 2022 using the Customs Declaration Service (CDS). The CDS is a customs IT platform designed to modernise the process for completing customs declarations for businesses that import or export goods from and to the UK.

A phased launch of the service started in August 2018. The CDS is used for making import and export declarations when moving goods into and out of the UK.

The CHIEF system is being withdrawn in two stages. The first stage, 30 September 2022, saw the ability to make import declarations on CHIEF close. From 1 October 2022, businesses who did not move across to the CDS are now unable to import goods into the UK. The second stage will happen on 31 March 2023 when the CHIEF system will fully close. From this date, the ability to make export declarations using CHIEF will also be withdrawn.

Even businesses that use a customs agents need to ensure they take the following steps:

  • subscribe to the CDS;
  • choose a payment method;
  • check their standing authorities are correctly set up; and
  • give their customs agent customs clearance instructions.

HMRC’s Director of Programme and Operational Delivery for Borders and Trade said:

'Those concerned about moving across to the Customs Declaration Service should work with a customs agent who is ready to use the system and can make declarations on their behalf.'

Source: HM Revenue & Customs Tue, 20 Sep 2022 00:00:00 +0100

Transfer of business as a going concern

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The transfer of a business as a going concern (TOGC) rules concern the VAT liability on the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate.

Where the sale of a business includes assets and meets certain conditions the sale will be categorised as a TOGC. A TOGC is defined as 'neither a supply of goods nor a supply of services' and is therefore outside the scope of VAT. Under the TOGC rules no VAT would be chargeable on a qualifying sale.

All the following conditions are necessary for the TOGC rules to apply:

  • The assets must be sold as part of a 'business' as a 'going concern'. In essence, the business must be operating as such and not just an 'inert aggregation of assets'.
  • The purchaser intends to use the assets to carry on the same kind of business as the seller.
  • Where the seller is a taxable person, the purchaser must be a taxable person already or become one as the result of the transfer.
  • Where only part of a business is sold it must be capable of separate operation.
  • There must not be a series of immediately consecutive transfers.
  • There are further conditions in relation to transactions involving land.

The TOGC rules can be complex, and both the vendor and purchaser of a business must ensure that the rules are properly followed. The TOGC rules are also mandatory which means that it is imperative to establish from the outset whether a sale is or is not a TOGC. For example, if VAT is charged in error, the buyer has no legal right to recover it from HMRC and would have to seek to recover this 'VAT' from the seller.

Source: HM Revenue & Customs Tue, 20 Sep 2022 00:00:00 +0100

Companies House new WebFiling account

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Companies House has introduced a new WebFiling account. The new account represents a first step in creating a single sign-in across all Companies House services and a continued push to becoming a fully digital organisation.

The new WebFiling account also includes new benefits and options for users that include the following:

  • multi-factor authentication;
  • the ability to link your company to your WebFiling account to give you more control over your filings;
  • the ability to digitally authorise people to file on your behalf on WebFiling, and to remove authorisation;
  • easily seeing who’s digitally authorised to file for your company; and
  • an option to sign up to emails to help you with the running of your company.

Online filing can also help reduce the likelihood of late filings and associated penalties. There are also built-in checks when filing documents online which can help avoid errors and rejection. Companies House also sends confirmation once an online filing has been accepted. If your document is rejected, it can be quickly corrected and resubmitted.

In order to register for online WebFiling, you must register with Companies House and choose a password. Companies House will then send an authentication code to the company’s registered office address. Both the password and Authentication Code are needed to use WebFiling.

Some small companies have had concerns adopting to electronic filing, however, in the long run the investment in using electronic filing should more than pay for itself in time and fees saved, as well as providing a more secure filing experience.

Source: Companies House Tue, 20 Sep 2022 00:00:00 +0100

Creditor bankruptcy and liquidation cost changes

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The Insolvency Service is a government agency that provides services to those affected by financial distress or failure. The Insolvency Service operates as an executive agency of the Department of Business, Energy and Industrial Strategy (BEIS). 

The Insolvency Service has announced changes to the deposits paid to initiate creditor bankruptcies and compulsory liquidations.

The petition deposit, the amount that needs to be paid up-front to seek an order, will be increasing in all cases where a petition is filed at court on or after 1 November 2022. The current fees have been in place since April 2016.

Changes being made to deposits Current Fee   Fee from 1 November 2022
Creditors’ bankruptcy petition deposit £990 £1,500
Company liquidation petition deposit  £1,600  £2,600

The deposit contributes to the Official Receiver’s administration costs, with the remainder of their costs recovered through fees charged against assets realised during the bankruptcy or liquidation proceedings.

If there are sufficient assets to recover all the fees and costs, then the deposit is returned to the party who initiated the insolvency.

There are no changes to the adjudicator petition deposit where the individual applies for their own bankruptcy.

Source: Other Tue, 20 Sep 2022 00:00:00 +0100

New Chancellor’s approach to economic priorities

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The new Chancellor, Kwasi Kwarteng, recently met in London with various market and city leaders to set out the Prime Minister’s new, pro-growth economic approach.

The new approach focuses on providing immediate support for families and businesses to cope with soaring inflation and rising fuel costs whilst at the same time supporting the economy to grow in a fiscally sustainable way.

At the meeting, the Chancellor also underlined his support for the Bank of England’s moves to keep inflation under control as much as possible, which is central to tacking cost of living challenges.

In a press release from HM Treasury, Mr Kwarteng stressed that the government will support the economy to grow. He recognised that the rate of growth has been too low and committed to a radical supply side agenda to deliver lasting economic growth. This will mean creating the right conditions for business investment and innovation, reducing burdensome regulation and taxes, which will in turn create jobs, wealth and drive economic growth.

Since the new Prime Minister, Liz Truss, took office on 6 September 2022 we have seen the introduction of a cap in energy bills at £2,500 for the average household from 1 October 2022. The new Chancellor will also make further important announcements in the mini-Budget on Friday 23 September.

Source: HM Treasury Tue, 20 Sep 2022 00:00:00 +0100

Tax Diary October/November 2022

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1 October 2022 – Due date for Corporation Tax due for the year ended 31 December 2021.

19 October 2022 – PAYE and NIC deductions due for month ended 5 October 2022. (If you pay your tax electronically the due date is 22 October 2022.)

19 October 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2022. 

19 October 2022 – CIS tax deducted for the month ended 5 October 2022 is payable by today.

31 October 2022 – Latest date you can file a paper version of your 2021-22 self-assessment tax return.

1 November 2022 – Due date for Corporation Tax due for the year ended 31 January 2022.

19 November 2022 – PAYE and NIC deductions due for month ended 5 November 2022. (If you pay your tax electronically the due date is 22 November 2022.)

19 November 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2022. 

19 November 2022 – CIS tax deducted for the month ended 5 November 2022 is payable by today.
 

Source: HM Revenue & Customs Wed, 21 Sep 2022 00:00:00 +0100

Her Majesty Queen Elizabeth II’s State Funeral

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It has been confirmed that the date of Her Majesty Queen Elizabeth II’s State Funeral will be Monday, 19 September 2022 following 10-days of national mourning. King Charles III approved an order that the day of the Queen’s funeral will be a national bank holiday across the UK.

A press release from the Department for Business, Energy & Industrial Strategy (BEIS) stated that this will allow individuals, businesses and other organisations to pay their respects to Her Majesty and commemorate Her reign, while marking the final day of the period of national mourning.

The government has confirmed that the bank holiday will work in the same way as other bank holidays, and that there would be no statutory entitlement to time off. Employers may include bank holidays as part of a worker’s leave entitlement.

It is expected that many places of businesses will be closed on the day. The press release also said the BEIS “expects employers to respond sensitively to requests from workers who wish to take the day of the funeral off work”. Schools will also be closed.

The government also stated that no decision has yet been made on whether King Charles' Coronation Day will be a bank holiday. A date for the Coronation is unlikely to be announced until after the mourning period for the Queen has ended.

Source: HM Government Tue, 13 Sep 2022 00:00:00 +0100

Sponsoring a charity

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There are special rules in place when a limited company gives to charity. This can include Corporation Tax relief for qualifying donations made to registered charities or community amateur sports clubs (CASC) as including capital allowances for giving away equipment that has been used by a donor company. 

However, the rules are different if the company is given something in return for donating, such as tickets for an event. 

Donation amount Maximum value of benefit
Up to £100 25% of the donation
£101 – £1,000 £25
£1,001 and over 5% of the donation (up to a maximum of £2,500)

These rules apply to benefits given to any person or company connected with a company, including close relatives. 

Charity sponsorship payments are different from donations because the company gets something related to the business in return. A company can deduct sponsorship payments from its business profits before it pays tax by treating them as business expenses. 

Payments qualify as business expenses if the charity:

  • publicly supports the company's goods or services;
  • allows the company to use their logo in company’s printed material;
  • permits the company to sell their goods or services at the charity's events or premises; or 
  • has links from their website to the company's website.
Source: HM Revenue & Customs Tue, 13 Sep 2022 00:00:00 +0100

The pension savings annual allowance

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The pension savings annual allowance for tax relief on pensions has been fixed at £40,000 since 6 April 2014. The annual allowance is further reduced for high earners. Since 6 April 2020, the tapered annual allowance increased from £150,000 to £240,000. 

This means that anyone with income below £240,000 is not affected by the tapered annual allowance rules. Those earning over £240,000 will begin to see their £40,000 annual allowance tapered. For every complete £2 income exceeds £240,000 the annual allowance is reduced by £1. The annual allowance cannot be reduced to be less than £4,000. The annual allowance can also be affected if the taxpayer flexibly accessed their pension pot.

There is a three-year carry forward rule that allows taxpayers to carry forward unused annual allowance from the last three tax years if they have made pension savings in those years. The calculation of the exact amount of unused annual allowance that can be carried forward can be complicated especially if subject to the tapered annual allowance.

There is also a pensions lifetime allowance that needs to be considered. The limit is currently £1,073,100.

Source: HM Revenue & Customs Tue, 13 Sep 2022 00:00:00 +0100

HMRC’s shared workspace

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HMRC’s Shared Workspace is a service that allows businesses and tax agents to share sensitive data, for example, accounts or employee information, with HMRC. 

According to HMRC, the service allows members to ‘share’ information in a ‘space’ where they can work together in real time. More than one person can view or edit material at the same time, with all amended versions being automatically saved and organised.

In order to use the Shared Workspace users must be invited by HMRC or request HMRC online service. Shared Workspace is available to qualifying businesses and agents, not individuals. 

Shared Workspace is very versatile and can be designed to meet the needs of customers who may deal with the different parts of HMRC. This also includes more complex and specialist work involving HMRC.

Before requesting to use this service, HMRC recommends contacting your local HMRC office and they will see whether the service is suitable for your needs.

Source: HM Revenue & Customs Tue, 13 Sep 2022 00:00:00 +0100

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