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Will Budget 2021 Make or Break Your Business?


During the past year, COVID-19 has impacted everyone's lives, and it will most definitely take a couple of years for humanity to return to what was once perceived as normality. The same can be said for the British economy which has taken a dramatic hit as a result of COVID too, with the total of COVID-19 spending topping £400bn, the economy shrinking by 10% & borrowing at its highest since outside of wartime. According to Sunak “the budget deficit will be £335bn this year, or 17% of GDP-” additionally he says without the right action borrowing will continue at an exponential rate, leaving underlying debt rising indefinitely. This might leave you questioning how the government plans on reviving the economy from such severe damage and how this will impact you and the functionality of your business and employees.
 

Main Budget 2021 Changes


Sunak has made a plethora of changes to the 2021 budget in order to fix the public finances. By the looks of it and according to him he is taking a “fair” approach to do this. Here are just a few amendments the chancellor has made within the Budget; stamp duty holiday has been extended for a further three months until February, the threshold at which people start to pay income tax or move into a new bracket will be frozen, alcohol and fuel duty rises have been scrapped and a £20 a week increase on universal credit will continue for the next 6 months.
 

Changes within Business


The Chancellor’s desired outcome from the 2021 Budget according to him is for people to be able to “level up” however, will Budget 2021 help your business-level up or crumble? Let's look at the changes made.
 
Corporation Tax - there will be an increase in corporation tax paid on company profits, it will increase to 25% from 19% in April 2023 but small businesses with profits of £50,000 or less will continue to be taxed at 19% and only companies making profits of £250,000 will be taxed the full 25%.
 
VAT and business rates cut - A VAT cut for the hospitality and tourism industries will be extended for six months until the 30th of September. The Chancellor said 150,000 businesses employing 2.4 million people “need our support” to protect jobs as the coronavirus restrictions are eased.
 
Freeports - Eight English ports will be granted controversial tax breaks “unlock billions of pounds of private sector investment”.The scheme is hugely controversial because it allows goods to be imported temporarily without tariffs, excise duties and other taxes being paid – before the goods are shipped on again.
 
Isas - The annual tax-free threshold will remain at £20,000 and for individual savings accounts (Isas) and £9,000 for junior Isas.
 
According to the 2021 Budget, it's clear that business will likely be impacted if they are a larger business in the forms of paying higher tax however, smaller businesses don’t seem to bear the brunt of this as many have suffered immensely during this pandemic and higher taxes for those businesses would only add salt to the wound. This is something the Chancellor is aware of and has expressed his aim of ‘levelling up’ businesses by making certain changes to the Budget so that there is an even playing field.
 
 
Here are Some Ways the Budget Supports Businesses:
 
Furlough - Employees will continue to receive 80% of their pay, after July employers must pay 10% of that and in August 20%.
 
Restart Grants -  £5 Billion towards a one-off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses.
 
Contactless Budget - Legally changing the contactless limit from £45 to £100- making it easier for people to pay for their shopping which will provide a boost to the retail sector.
 
Recovery Loan Scheme -  The previous schemes had seen almost 1.6 million approved facilities lending almost £74 billion to businesses to support them through the pandemic. This new scheme will offer businesses of any size continued access to loans and other types of finance up to £10 million per business to help them recover and grow following the disruption of the pandemic. 
 

What about the Self Employed


While Sunak has extended support schemes for example the SEISS was extended meaning those who’ve suffered a fall in turnover of more than 30% will be eligible for 80% of average monthly profits (up to £7,500). However, there is still no support for millions of self-employed people such as freelancers, limited company directors and the self-employed with more than 50,000 in trading profits. It seems alongside NHS workers the Chancellor has failed to consider many self-employed people within Budget 2021 so far.
 

So What Does All of This Mean for You?


It seems the ultimate goal for the government is to reduce the countries GDP, so whilst the Chancellor has put forward a myriad of Loan, Grant Schemes and has extended different payment plans, he doesn’t have the foresight to predict how public spending has been impacted by the pandemic, and how this will impact different industries financially. Will the public be willing to spend an extra £50 on their contactless payments or has the nation become more frugal? How will the Chancellor encourage spending with customers? Without customer spending how will businesses level up? Will these Loans truly help businesses or are they a way of making businesses pay for government spending in the long run?
 

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UK Small & Medium Enterprises Grants: January Update


Securing grants for your small business or start-up is a constant challenge – but there is help available. Here, we have rounded up a comprehensive list of grants from all over the UK. In our previous blog, we talked about UK SME grants and the currently available supports for small and medium businesses in the UK and introduced them to you. Following the latest lockdown announcement, in this article, we round-up the COVID-19 support available in the UK.
 

Grant support for 2021 lockdown

After announcements from Boris Johnson and Nicola Sturgeon, England and Scotland have gone into lockdown. Wales has been in lockdown since December 20.

To support businesses through this period, chancellor Rishi Sunak has announced £4.6bn of grant funding. This includes a one-off top-up grant for leisure, hospitality and retail businesses of up to £9,000.

They’ll be granted to closed businesses as follows:
  • - £4,000 for businesses with a rateable value of £15,000 or under
  • - £6,000 for businesses with a rateable value between £15,000 and £51,000
  • - £9,000 for businesses with a rateable value of over £51,000

A £594m discretionary fund is also being made available to support other businesses affected by the lockdown. As with the other grant funding, you’ll need to apply through your local authority.

More money has been giving to the devolved nations as part of the announcement but there have been no further funding announcements from them at the time of writing.

This new lockdown support is in addition to existing funding, as listed below.

Additional Restrictions Grant (ARG)
  • - Available for businesses that are not covered by other grant schemes or where additional funding is needed.

Bounce Back Loan Scheme (BBLS)
  • - Loans of between £2,000 and £50,000, up to 25 per cent of turnover
  • - The government guarantees 100 per cent of the loan with no fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5pc a year
  • - Companies can now apply for a top-up in cases where they initially did not borrow the full amount available
  • - Available until the end of March
  • - Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020-2021 tax year.

Coronavirus Business Interruption Loan Scheme (CBILS)
  • - Offers access to loans of up to £5m
  • - 80 per cent of the loan is guaranteed by the government.
  • - Government pays interest and any fees for the first 12 months
  • - Available for businesses with annual turnover of up to £45m
  • - Available until the end of March

Coronavirus Job Retention Scheme (CJRS)
  • - 80 per cent of employees’ monthly salary covered for hours not worked, up to a maximum of £2,500
  • - Employees do not have to be furloughed full-time to qualify. Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis
  • - No employer contribution for hours not worked, employers only have to cover National Insurance and employer pension contributions
  • - Available until end of April 2021
  • - Convertible loans between £125,000 and £5m offered to innovative companies which are facing financing difficulties
  • - Available until the end of January
  • - Provides funding to create new job placements for 16 to 24-year-olds on Universal Credit who are at risk of long-term unemployment
  • - The funding covers 100 per cent of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of six months
  • - Also covers National Insurance contributions
  • - Application must be for a minimum of 30 job placements, though you can team up with other businesses to reach the minimum number of placements

Self-Employed Income Support Scheme (SEISS)
  • - Extended with two further grants, covering November 2020 to January 2021 and February 2021 to April 2021
  • - The November to January grant is calculated at 80 per cent of three months’ average monthly trading profits, paid out in a single instalment and capped at £7,500

Localised small business lockdown support
As you’ll see, the funding below is distributed by your local authority. Find your local authority.

England

Local Restriction Support Grant (closed businesses)
  • - You can apply for a grant if your business in an area of local Tier 4 restrictions and has been required to close because of local restrictions that resulted in a first full day of closure on or after December 19
  • - The grant will be based on the rateable value of the property on the first full day of local restrictions.
  • - If your business has a property with a rateable value of £15,000 or less, you may be eligible for a cash grant of £667 for each 14-day period your business is closed.
  • - If your business has a property with a rateable value over £15,000 and less than £51,000, you may be eligible for a cash grant of £1,000 for each 14-day period your business is closed.
  • - If your business has a property with a rateable value of £51,000 or above, you may be eligible for a cash grant of £1,500 for each 14-day period your business is closed
  • - The grant will be extended to cover each additional 14-day period of closure. If your business is closed for 28 days, or two payment cycles, it will receive £1,334, £2,000 or £3,000, depending on the rateable value of the property

Scotland

Strategic Framework Business Fund

Temporary Closure grant
If your business needs to close, you could be entitled to a Temporary Closure grant every four weeks, of one of the following:
  • - £2,000 if your business premises has a rateable value of up to and including £51,000
  • - £3,000 if your business premises has a rateable value of £51,001 or above
  • - An upper limit of £15,000 in total in any four-week period will apply to any eligible business operating multiple premises
From January 1 2021 there will no longer be an upper limit of £15,000 for any eligible business operating multiple premises.

Further sector-specific support is set to be introduced later in January.

Wales

ERF Restrictions Business Fund

 Hospitality businesses who received the Lockdown Business Grant in October began receiving payments via the ERF Restriction Fund into their back account during December. These businesses will not be required to re-register their details.
Eligibility for the Business Restrictions Fund:
  • - Businesses in the hospitality and non-essential retail sector, which are impacted by the new restrictions that are in receipt of Small Business Rate Relief (SBRR) and have a rateable value of £12,000 or less will be eligible for a £3,000 payment. Supply chain businesses qualifying for SBRR will also be eligible for this support if they have greater than 40 per cent reduction in turnover during the restriction period.
  • - Hospitality and non-essential retail businesses with a rateable value of between £12,001 and £150,000 will also be eligible for a £5,000 payment if impacted by the restrictions. Supply chain businesses in the same rateable value bracket will also be eligible for this support if they have greater than 40 per cent reduction in turnover during the restriction period.

ERF Restrictions Discretionary Grants
  • - Local authorities will continue delivering the Lockdown Discretionary Grant to businesses that are materially impacted. As was the case for the Firebreak, this will continue to be targeted at businesses that are not on the non-domestic rates (NDR) system and therefore not eligible for the NDR linked grants. The grant level for this strand would be set at eligible costs of up to £2,000 per business
  • - This will provide support to sub VAT sole traders without a property who are materially impacted (>40 per cent reduced turnover) as a result of the restrictions, e.g. cleaners providing services to the hospitality industry
  • - Application forms for the ERF Restrictions Discretionary Grant can be accessed by visiting the relevant local authority website. Please check your relevant local authority website for details. When all local authority schemes have opened, direct links to the relevant web pages will be published on the Business Wales website.
The ERF Sector Specific Grant will be open from January 11.

Northern Ireland

Localised Restrictions Support Scheme

Businesses must meet three eligibility criteria:
  • - The business must operate from a property within Northern Ireland
  • - The business must fall into at least one of the following categories:
    • > It has been registered with, or is in the process of registering with their local council environmental health department as a business operating in one of the following categories: cafe, restaurant, hotel, guesthouse (including registered bed & breakfast) or pub
    • > It operates as a campsite or caravan park for touring caravans, cinema, a museum, a gallery, a bingo hall, a funfair, an indoor amusement arcade, an indoor visitor attraction, a trampoline park, an inflatable park, an escape room, a bowling alley, or an ice rink; or close contact services that operate from commercial premises (as detailed in the Health Protection Regulations) such as hairdressers and barbers, beauty salons, day spas, nail bars and tattoo parlours
    • > It is a business which has been required to close or has had business activities at their premises directly curtailed by the Health Protection Regulations
  • - The business must have been open to the public and trading at the start of the restriction period set by the Health Protection Restrictions (unless the applicant business is a wet pub which serves drink only)
 
With a strong presence in London over the last 15 years, B&F Services has successfully worked with 3000+ businesses and raised over £55,000,000 fund for small businesses to-date and have helped start-ups and investors to settle in the UK. Find out more about our team
 
We hope that you find this article useful and informative. Our company also offers a free consultation, which could help you decide better and achieve your goals easier. Contact us for a FREE CONSULTATION!
 

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Brexit Deal Clarified for Small Businesses



Almost 4 and half years after the referendum result, the UK and the EU finally concluded a trade deal on 24 December and small business owners are relieved that the Brexit deal has finally been agreed, as it means certainty going forward. A 1,246-page legal text of the Trade and Cooperation Agreement deal has been released and there is a lot to take in but here the main points that impact on small businesses.
 

Tariffs on exporting and importing goods

One of the big headlines in the Brexit deal is the agreement that there will no tariffs imposed on qualifying goods. To be free of tariffs, goods being exported from the UK to the EU and vice versa must comply with rules of origin which is how customs authorities classify where an export has come from. Let’s dig a little deeper into what does the agreement mean in practice for online and multichannel retailers:
 

Selling to the EU

EORI numbers

Exporters from Great Britain to the EU will need an EORI number starting with the letters GB from January 1 – already previously needed to export to non-EU countries – to show they are a recognised trader. This, says Government guidance, is to help avoid increased costs and delays as their goods move through customs.
 
A further EORI number starting with XI will also be needed to move goods between Northern Ireland and non-EU countries or to make a declaration or get a customs decision in Northern Ireland. Only traders who have an EORI number starting in GB can get one of those.
 
Retailers shipping from Northern Ireland will only need an EORI number if they are exporting outside the EU.
 
The UK government’s own information says the GB EORI number can take about a week to come through. Here’s the link to get it.
 
VAT

From January 1 most goods being exported to the EU will attract a 0% UK VAT rate. Here’s the page to look at to check the exceptions.
 
Instead, traders will have to pay import VAT when goods arrive at the destination country. VAT is dealt with by member states so retailers sending goods to customers in the EU will need to be aware of the different rules in each member state about whether import VAT will be liable at the border or whether the accounting of it can be deferred to the importer’s quarterly return.
 
The EU has, as a result of Covid-19, delayed introducing a scheme that will require platforms to collect and account for VAT on behalf of sellers until July 1 – although, as detailed below – it comes into operation for those sending from the EU to UK from January 1.
 
Rules of origin

The free-trade deal struck between the UK and EU applies to goods mostly originating from the UK and EU. Where goods aren’t mostly from the UK or EU they are not covered under the deal so tariffs would be payable.
 
So what counts? Government detailed guidance on the agreement struck says that goods must be either ‘wholly obtained’ from the UK or EU - so, entirely made in the UK from materials produced in the UK – or ‘substantially transformed’ in the UK or EU – in such a way that value is added through the production basis, the goods change tariff classification as a result, or that goods are made from specific products using specific processes covered in detail in the agreement.
 
The government guidance on understanding rules of origin is available here. It suggests that, in practice, customs intermediaries will help businesses comply with their obligations.
 
There is some leeway for that since up till the end of June, traders importing from the EU to the UK will have six months to submit a full customs declaration – including declaring proof of origin – and pay any tariffs that are necessary. Additionally, traders will not need to have declarations from their suppliers in place at the time goods are exported until December 31 2021.
 
Customs declarations

Most UK online retailers selling to EU customers from this country do so by sending orders in individual parcels to the customer, either via the postal service or via a courier. The UK and EU have negotiated a tariff-free deal, so there will be no tariffs charged on exports to the EU. But, everyone in England, Scotland or Wales sending parcels to the EU whose contents are worth up to £270 will have to fill in a CN22 customs declaration form (guidance here). Those sending items worth £270 or more have to fill in a longer CN23 customs declaration. Neither are required for retailers in Northern Ireland sending a parcel to the EU.
 
The Post Office says that about 45% of the total international parcel traffic sent through Post Offices in Great Britain currently goes to EU destinations. Customs forms, available within branches, should be used for any parcels sent from now on, in order to be sure parcels have the correct documentation if they arrive on or after January 1.
 
Amanda Jones, Post Office retail and franchise network director, says: “Postmasters are on hand to provide practical advice, particularly to small businesses, who regularly send parcels to the EU. Customers should also look out for a leaflet in branches that has information about the new customs declaration requirement.”
 
Couriers handling parcels will handle these formalities on behalf of retailers and brands, but they will need the new information required for the customs declaration in order to complete the task. DPD’s transitional Brexit Guide, for example, covers the seven new pieces of information they will need – from commodity codes and product descriptions through to EORI numbers and country of origin.
 
Logistics and delivery

Those who are not sending individual parcels via post or via a courier – for example, shipping a wholesale order to an EU retailer or transferring goods to their own EU operations – will need to follow a different process, and most businesses will use a courier, freight forwarder or customs agent to make the declaration and get goods through UK customs. Here’s the government step-by-step guidance for those exporting to the EU but not using the post.
 
Those sending animal products will need to clear the EU’s Sanitary and Phytosanitary (SPS) Measures, as set out in paragraph 1.2.3. in this document on the UK/EU border. The UK/EU trade agreement allows for further harmonisation of these measures in the future.
 
Logistics UK says that the EU/UK deal appears to head off threats to the supply chain, since it allows goods to be shipped both by sea and by air. But retailers and brands will be making customs declarations for the first time in 40 years – while also potentially dealing with SPS requirements – and that’s likely to mean delays. Logistics UK has written to the government to ask for new arrangements to be put in place for lorry drivers who may have to wait to clear customs from January 1. That, it says, is necessary to prevent a repeat of what it terms the “national embarrassment” that saw gridlocked lorry drivers spend Christmas in their cabs with few toilet or hot food facilities available while the French border was temporarily closed as a Covid-19 safeguard.
 
“With new customs procedures in place from 1 January 2021, it is vital that all the systems needed to support hauliers as they move across our borders are in place and in full working order,” says Logistics UK policy director Elizabeth de Jong. “From 1 January, the industry will need regular, nationwide real-time information feeds from the government on the status of all ports, combined with early insight where traffic building – this will highlight where problems are likely to occur and help delays to be mitigated.”
 
Data

Online and multichannel retailers have built up large EU customer databases in recent decades and there have been questions about whether they will be able to hold onto those databases in the future. The final provisions section of the EU/UK agreement allows fo existing arrangements to continue at least for the next six months.

Free flow of personal data from the EU, EEA and EFTA states can continue “until adequacy decisions are adopted, and for no longer than six months”, the Government’s explainer of the treaty says. It also adds that “The UK has, on a transitional basis, deemed the EU and EEA EFTA States to be adequate to allow for data flows from the UK.
 

Buying from the EU

EORI numbers

Retailers selling from the EU to the UK will need to have an EORI number, as assigned by the member state in which they operate. Here’s a link to the EU information on this.
 
VAT

VAT is liable to be paid on imports from the EU. The UK government has agreed that UK end customers will not have to pay import VAT, but retailers selling to the UK will have to set up an account with HMRC – the UK tax authority – to pay that VAT. There’s Government information here on how to deal with UK VAT. UK companies will have to account for goods that they import and that are worth more than £135 via their quarterly VAT return. Some of the big platforms, such as Amazon and eBay, will be liable to collect any VAT due from their sellers from January 1 and send it to HMRC.
 
Amazon has written to sellers, in the run up to January 1, to say it will calculate and collect UK VAT from sellers that are not based in the UK but have stored stock in the UK or that are delivering parcels worth up to £135 from stock stored outside the UK. VAT will then be deducted from the seller’s total earnings.
 
Amazon also reminds customers at the same time that the VAT tax exemption for sales of goods worth less than £15 delivered from outside the UK will be removed from January 1. This is a UK action rather than part of the EU deal.
 
Rules of origin

As stated above, the free-trade deal struck between the UK and EU applies to goods mostly originating from the UK and EU. Where goods are made using raw materials or components from other countries not covered by the deal, additional tariffs may become payable.
 
Government guidance on understanding rules of origin as agreed in the UK/EU treaty is available here. It suggests that customs intermediaries will help businesses comply with their obligations. The leeway for those importing goods from the EU to the UK is that traders will not need to have declarations from their suppliers in place at the time goods are exported until December 31 2021.

See above for rules on data.
 

Business travel and selling services in the EU

The end of freedom of movement means unlimited businesses trips to the EU are no longer possible and UK businesses lose the automatic right to offer services across the EU. The deal allows for short term business trips totalling 90 days in any 180 days without a visa or work permit. Activities permitted include meetings, attending conferences and market research. The full list of permitted activity when on a short-term business trip to the EU is outlined here (for anything not on this list, you might need a work visa):

The activities Short-term business visitors are permitted to engage in are:

a) meetings and consultations: natural persons attending meetings or conferences, or engaged in consultations with business associates;

b) research and design: technical, scientific and statistical researchers conducting independent research or research for a legal person of the Party of which the Short-term business visitor is a natural person;

c) marketing research: market researchers and analysts conducting research or analysis for a legal person of the Party of which the Short-term business visitor is a natural person;

d) training seminars: personnel of an enterprise who enter the territory being visited by the Short-term business visitor to receive training in techniques and work practices which are utilised by companies or organisations in the territory being visited by the Short-term business visitor, provided that the training received is confined to observation, familiarisation and classroom instruction only;

e) trade fairs and exhibitions: personnel attending a trade fair for the purpose of promoting their company or its products or services;

f) sales: representatives of a supplier of services or goods taking orders or negotiating the sale of services or goods or entering into agreements to sell services or goods for that supplier, but not delivering goods or supplying services themselves. Short-term business visitors shall not engage in making direct sales to the general public;

g) purchasing: buyers purchasing goods or services for an enterprise, or management and supervisory personnel, engaging in a commercial transaction carried out in the territory of the Party of which the Short-term business visitor is a natural person;

h) after-sales or after-lease service: installers, repair and maintenance personnel ands upervisors, possessing specialised knowledge essential to a seller's contractual obligation, supplying services or training workers to supply services pursuant to a warranty or other service contract incidental to the sale or lease of commercial or industrial equipment or
machinery, including computer software, purchased or leased from a legal person of the Party of which the Short-term business visitor is a natural person throughout the duration of the warranty or service contract;

i) commercial transactions: management and supervisory personnel and financial services personnel (including insurers, bankers and investment brokers) engaging in a commercial transaction for a legal person of the Party of which the Short-term business visitor is a natural person;

j) tourism personnel: tour and travel agents, tour guides or tour operators attending or participating in conventions or accompanying a tour that has begun in the territory of the Party of which the Short-term business visitor is a natural person; and

k) translation and interpretation: translators or interpreters supplying services as employees of a legal person of the Party of which the Short-term business visitor is a natural person. For activities that involve selling services and goods, work permits and other requirements are likely to be needed from the appropriate country. Touring musicians, for example, are not covered by the 90-day visa-free rule. A petition calling for a free work permit that gives visa-free travel for touring bands, musicians, artists and TV and sports professionals has received more than 190,000 signatures.


In the many annexes in the Brexit deal document, several exceptions and restrictions for providing services are laid out. Analysis by the Institute for Government says: "UK nationals will not, for example, be able to sell actuarial services in Italy or construction services in Cyprus. They will not be able to be surveyors in Bulgaria or tobacconists in France."

The agreement allows for mutual recognition of professional qualifications in the future but as a briefing paper by the House of Commons Library says: "From 1 January 2021, UK qualified workers wishing to work in the EU will have to meet the qualification requirements of each individual Member State. The same is true for EU workers seeking recognition of their qualifications in the UK."

Business owners providing services in the EU/EEA should read the latest government guidance for the country they are visiting:
   

EU funding schemes

British businesses have received billions of pounds of funding from the EU and the agreement allows for the UK's continued participation in some schemes subject to the UK contributing to the EU budget. 

Continued UK participation in the following programmes was agreed until 2027:
  • Horizon Europe, the EU’s research and innovation programme
  • Euratom Research and Training programme
  • International Thermonuclear Experimental Reactor, the fusion test facility under construction in France
  • Copernicus, EU satellite system for monitoring the Earth

The government's latest guidance on EU funding is here and Horizon Europe details are here.
 

Sharing of personal data

The EU-UK Trade and Cooperation Agreement allows for the continued free trade of personal data from the EU/EEA to the UK for up to six months after the end of the transition period until adequacy decisions come into effect.

Government guidance says: "Personal data is any information that can be used to identify a living person, including names, delivery details, IP addresses, or HR data such as payroll details. Most organisations use personal data in their daily operations.

"An example of this is a UK company that receives customer information from an EU company, such as names and addresses, to provide goods or services."

Although nothing changes for now, the government advises businesses to "work with EU/EEA organisations who transfer personal data to you to put in place alternative transfer mechanisms to safeguard against any interruption to the free flow of EU to UK personal data".

The Information Commissioner's Office has also published guidance here.

GDPR will be retained in UK law.
 

Small business Brexit advice

The Brexit trade deal commits the UK and EU to provide advice to small and medium-sized enterprises (SMEs). The government's explainer document says:

"The agreement includes typical commitments to provide SMEs with clear and accessible online information about the agreement, helping them to trade and do business in each party’s jurisdiction. This covers customs procedures, intellectual property rights, and public procurement.

"The agreement commits each party to provide for a searchable online database, on measures such as customs duties, taxes and rules of origin.

"The agreement also establishes a framework that will allow the parties to work together to increase opportunities for SMEs and to report on their activities."

Business West has prepared a nine-point guide to completing customs declarations when trading with the EU:
 
  1. Apply for postponed VAT accounting
This allows you to defer paying VAT when importing goods. Instead your import VAT will be paid on your usual VAT return.
 
  1. Apply for a Duty Deferment Account
This will allow you to defer paying your import duty and duty can be paid once a month rather than every time you import your goods. Currently HMRC has waived the need to put up a Customs Comprehensive Guarantee and, if you qualify, will give you a £10,000 credit limit per month.
 
  1. Check your commodity codes
You need to ensure you are using the correct Commodity Code for your goods. There are many implications such as financial or criminal penalties if you are using the wrong codes.
 
  1. Do you need to pay import duty?
Check whether import duty may be payable on your goods after January 1 2021 if importing goods from the EU
 
  1. Register if you trade with Northern Ireland
If trading with Northern Ireland – register on the TSS Trader Support Service
 
  1. Check you have a GB EORI number
You cannot trade with the EU if you do not have an EORI number.
 
  1. Get an XI EORI number if you trade with Northern Ireland
Ensure you have an XI EORI number if you trade with Northern Ireland. You cannot trade without one.
 
  1. Check current trade agreements
You need to check the detail of each trade agreement with each country to ensure your goods can be imported using the correct procedures (for example – using the correct document to claim preferential origin).
 
  1. Make sure you have a customs broker
Ensure you have a customs broker in place to process your import/export declarations from the first of January.


Useful links:  
Sources:

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Everything You Need to Know About Self-Employed Tax Return

Each year, HM Revenue and Customs remind self-employed to complete their tax return before the deadline. A Self-Assessment tax return can look very daunting, but if you’re prepared, organised and understand what you’ll be asked for they’re a lot simpler than they look. Here’s our guide on how to do a self-employed tax return.

Each year, around 11 million customers complete a Self Assessment tax return. The deadline for filing a return on paper is 31st Oct of each year. When this deadline is passed, the only way to do it is online via the government portal. The customers have until midnight on 31 January of the next year to file their tax return online and pay your tax bill. Each customer needs a Government Gateway login and password, which can take up to 10 days to arrive – so make sure you apply well in advance if you’re filing online for the first time.

The Self-Assessment process can seem complicated at first, so here we break down the tax return step-by-step – from registering for Self-Assessment to filing a tax return and then paying your bill.

 

What is Self-Assessment?


Self-Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax form for self-employed people. Tax is usually deducted automatically from wages, pensions and savings thus You might even need to complete a Self-Assessment return if you’re not self-employed – for example, if you earn money from renting out a property, or have significant income from savings, investments and dividends. You can find out detailed information on Self-Assessment here.
 

Who needs to submit a tax return?


HMRC says that you need to send a tax return and pay your tax bill through Self-Assessment if, in the last tax year, you were:
 
  • have earned more than £2,500 from renting out a property
  • have received, or their partner has received, Child Benefit and either of them had an annual income of more than £50,000
  • have received more than £2,500 in other untaxed income, for example from tips or commission
  • are a self-employed sole trader whose annual turnover is over £1,000
  • are an employee claiming expenses over £2,500
  • have an annual income of over £100,000
  • have earned income from abroad that they need to pay tax on
You can also use this tool to find out if you need to send a tax return for the 2019 to 2020 tax year (6 April 2019 to 5 April 2020): Check if you need to send a Self-Assessment tax return
 

How to register for Self-Assessment?

 
The majority of Self-Assessment customers choose to complete their tax return online, which provides an immediate calculation of any tax owed.

If you are required to send a tax return and this is your first time online, you need to register for Self-Assessment and Class 2 National Insurance. To do so, you need to follow these steps:
 
  1. Register online. Once you’ve completed the questions, HMRC will create your account.
  2. You’ll receive a letter with your Unique Taxpayer Reference (UTR) number within 10 days (21 if you’re abroad). You’ll need your UTR to file a return.
  3. You’ll then receive another letter with an activation code for your account. You can get a new activation code if you do not receive it or you lose it.
 
Once you’ve activated your account, you can file your tax return any time before the Midnight 31 January otherwise, you’ll get a penalty of £100 if your tax return is up to 3 months late if you need to send a tax return and you miss the deadline for submitting it or paying your bill. You’ll have to pay more if it’s later, or if you pay your tax bill late. You’ll also be charged interest on late payments: Estimate your penalty for late Self-Assessment tax returns and payments
 
If you’ve filed a return online before, Re-register online (form CWF1) if the work you plan to do is different from what you did before. You’ll need your 10-digit Unique Taxpayer Reference (UTR) from when you registered before. You can find your UTR if you do not know it. You’ll receive a letter with a new account activation code 10 days later (21 if you’re abroad). Once you’ve reactivated your account, you can file your tax return any time before the Midnight 31 January. If the work you plan to do is the same as you did before, sign in to your account.

If you’ve filed before but you did not use the online service, Create an account for the online service using your UTR. You can find your UTR if you do not know it. You’ll receive a letter with an activation code for your account. Once you’ve activated your account, you can file your tax return any time before the Midnight 31 January.

What are allowable incomes and expenses?

Income

If you’re earning money through self-employment, you will be asked to enter your turnover under the business income section.

This is the total of everything you had coming in during the tax year before expenses are deducted.

If you have more than one source of self-employed income, you can enter this amount separately, but make sure the job which you earn the most from is your main employment.

Tipp: If you’re getting a self-employed income COVID support grant, this will need to be reported as income.
 

Expenses

There are two ways to declare your expenses if you’re self-employed.

If annual turnover is below £85,000 you can just enter your total expenses without having to itemise them. If you’re self-employed and your turnover is more than £85,000, you will have to enter an individual amount for each kind of expenses, plus a total at the end. Knowing what expenses, you can and can't claim to reduce your self-employed tax bill can be tricky.

Here’s a list of different expenses you can include if you’re self-employed:
 
  • Accountancy fees
  • Accommodation expenses incurred on business travel
  • Bank charges
  • Business assets (like computers and software) and office furniture
  • Business mileage
  • Charity donations
  • Employee costs
  • Eye tests and glasses
  • Insurance costs
  • Marketing costs
  • Office stationery (paper, postage etc.)
  • Office overheads (including heating, lighting, water rates, business rates)
  • Pension
  • Professional subscriptions
  • Phone and broadband costs
  • The use of your home as an office
  • Stock
  • Training costs
  • Travel and subsistence costs
  • Workwear (including protective clothing and uniforms)

For more information on each category you can visit: Expenses if you're self-employed or use the simplified expenses checker to compare what you can claim using simplified expenses with what you can claim by working out the actual costs.
 
Once you’ve submitted your Self-Assessment tax return, you will be told how much tax and, if you’re self-employed, National Insurance Contributions (NICs) you will need to pay. Then you can set up their own payment plan to help spread the cost of their tax liabilities, up to the value of £30,000. you can make payments in instalments, but these are an advance on your next tax bill. You can arrange for what is called a budget payment plan through your online account and decide how much you want to pay each week or month. You can also choose to stop paying for up to six months. The only restriction is you must be up to date with your previous Self-Assessment payments.
 
Although there’s lots of guidance on the GOV.UK website and you can also call the Self-Assessment helpline on (0300) 200 3310, for those doing it for the first time it can seem like a daunting task. If you’d rather have someone else handle your bookkeeping and Tax Return, check out B&F Services or speak with our consultant. As a team, we are responsible for completing over 3000 projects and securing over £55m in funding for start-ups and entrepreneurs thus your Tax Return will be in a safe hand.

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