VAT – Post 31 January 2020

VAT – Post 31 January 2020

Even though the UK is leaving the EU on 31 January 2020, the transition period to 31 December 2020 means that there will be no VAT changes, in terms of paperwork and process.

From 1 January 2021 – the UK will have imports and exports of goods (to EU countries) instead of intra-community movements. Apart from Customs Entries, in practice there will be very little change for importers and exporters in the UK.

Things are far more uncertain regarding services to/from the EU post 31 December 2020.  In the main, the UK will probably want to replicate the general rules as they are now for Business to Business supplies of services.

But Business to Consumer supplies and their treatment will need to be negotiated with the EU.  Reciprocal arrangements will need to be made between the UK and EU, so services will be an area of uncertainty well into the Autumn of 2020.

In the meantime, for all companies trading with the EU, an EORI number (Economic Operator Registration Identification) will be required. This will allow you to submit customs declaration forms, which you will need to import or export goods once the transition period with the EU has ended –  https://www.gov.uk/eori

HMRC have introduced a website (see below) which is a good explanation of what companies need to do before the end of the transition period – 31 December 2020.  Following the guidelines on this website should lead to a more seamless transition once the UK leaves the European Union.

https://www.gov.uk/guidance/help-and-support-for-traders-if-the-uk-leaves-the-eu-with-no-deal#getting-ready-for-brexit

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

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Tony Nickson

VAT Consultant, Sheffield

01604 645 600
The cost of HS2 could rise to £106bn

The cost of HS2 could rise to £106bn

In 2015 the cost for HS2 was £56bn, but a leak from the still unpublished Oakervee report says that costs could increase by 20%. From the last estimated price for the project of between £81bn and £88bn to £106bn.

This has prompted the Transport Secretary, Grant Shapps to ask for more information before making a decision on the future of the project.

There was further information in this report calling for work to be put on hold on the second phase of the link between the West Midlands, Manchester, and Leeds. The reason for this is to decide whether this section should be made up of a mixture of high-speed and conventional lines.

However, this information has concerned politicians in the North of England. Andy Burnham, the mayor of Greater Manchester told the BBC: “To me that would be the same old story. London to Birmingham, money is no object, and then all the penny pinching is done in the North of England. That would not be acceptable to me, and I’m sure wouldn’t be acceptable to many other leaders across the north.”

The review, led by Doug Oakervee the former chairman of HS2, has recommended that the Government should push ahead with the project. However, in the review he suggests that more work should be done in order to see how much impact there will be on economic growth.

There have also been delays to the project timeline. Originally the first part of the project between London and Birmingham was going to open by the end of 2026, but the current forecast shows that the opening date could now be as late as 2031. Furthermore, it has been revealed that the whole project may not be completed until 2040.

Paul Wormald, Hawsons transport & logistics partner commented: The HS2 saga continues… and clarity is desperately required regarding the future of the huge engineering project. Cancelling this project after the construction industry has made plans to recruit for and resource this project could inflict major damage on this key sector which is suffering from a reduction in other major projects.

From a connectivity perspective, we have seen recent criticism of Network Rail for its performance across the Northern corridor which emphasises the need for greater capacity on our rail network. HS2 and its successor projects are key to this.

How can we help

At Hawsons we have a dedicated team of transport and logistic accountants at our offices in Sheffield, Doncaster, and Northampton. With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year-round involvement, we can help you anticipate and deal with challenges quickly and effectively.

If you would like to book your first free initial meeting with us click here.

If you would like to find out more about Hawsons visit our website here.

More from our transport and logistics experts

You can find all of our latest transport and logistics sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Paul Wormald, Partner

Paul Wormald

Partner, Doncaster

01302 367 262
Key tax relief at risk in 2020 Budget

Key tax relief at risk in 2020 Budget

Business owners should be aware that Entrepreneurs’ Relief, a valuable tax relief when selling or liquidating a business, could be limited or even abolished altogether on 11 March.

What is Entrepreneurs’ Relief?

Entrepreneurs’ Relief applies a reduced capital gains tax rate of 10% to the first £10m of qualifying gains.

As the main rate of capital gains tax is 20%, the relief can provide a tax saving of up to £1m for qualifying taxpayers.  For a married couple this could be increased to £1m each.

The £10m cap is a lifetime limit and can be applied over a number of disposals.

Further information on the current rules for Entrepreneurs’ Relief can be found here.

Why is it under threat?

The relief has been criticised for failing to fully deliver on its policy objectives and also for the high cost to the Treasury (estimated at £2.4bn per year by The Institute for Fiscal Studies).

The Conservatives pledged to “review and reform” Entrepreneurs’ Relief as part of its election manifesto and further details are expected to be announced in the forthcoming Budget.  The date for the Budget has been confirmed as 11 March 2020.

Some changes were made to Entrepreneurs’ Relief last year including making it a two year qualifying period rather than one year (click here for details of the changes).

Farewell to Entrepreneurs’ Relief?

So is this the end for Entrepreneurs’ Relief?

It seems unlikely that the relief will be abolished altogether – historically there has always been a differential rate of tax for business disposals (prior to the introduction of Entrepreneurs’ Relief this was provided by business asset taper relief and retirement relief).

Nonetheless the complete abolishment of Entrepreneurs’ Relief has not been ruled out.

What might change?

The Chancellor may be considering raising the current 10% rate of capital gains tax in order to limit the amount of relief given. We could also see a reduction to the £10m lifetime limit.

The qualifying conditions for the relief could be tightened and there could be a further increase to the qualifying period.

There has even been speculation that we may go back to a relief with an age threshold, akin to retirement relief, but this seems less likely.

Of course, the review could be kicked down the street and we may not see any significant changes.

When would any changes take effect?

Although the Chancellor has vowed to review and reform Entrepreneurs’ Relief, we do not know when any changes might be effective from.

Mid-year changes to tax rates are rare and it seems more likely that any changes would apply from the start of the new tax year in April 2020 or perhaps 2021. However, this is not always the case and it is possible that any changes would take effect from 11 March.

It is hoped that the government will consult before making any significant changes to the Entrepreneurs’ Relief regime, giving interested parties an opportunity to comment on the proposals.

We could see the government introduce anti-forestalling provisions to prevent business owners taking advantage of the current regime before the change in law. However, past governments have been happy for taxpayers to trigger taxable disposals in advance of changes in tax rates – after all it brings forward the tax receipt.

What do I need to do?

The current regime is generous and it seems unlikely that the tax rate will reduce further in the foreseeable future. Therefore, if a sale is in progress, the seller may wish to ensure that they exchange contracts with the buyer prior to 11 March to ‘lock-in’ the current rate.

Those who have not yet begun the sale process but are concerned about how the potential changes to Entrepreneurs’ Relief could affect them should seek advice.

Our tax specialists will be watching the Budget and will provide commentary on the announcements. To pick up on our commentary, follow us on Twitter (@Hawsons) or LinkedIn.

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Craig Walker

Tax Director, Sheffield

0114 266 7141
What does charity finance have in store for 2020?

What does charity finance have in store for 2020?

What does charity finance have in store for 2020?

Like most sectors across the UK, the charity sector is going to face a variety of challenges in 2020. At this moment in time a large majority of the problems are arising on the financial side. However, it’s not just a finance problem as many believe that charities need to see large scale changes in the rules surrounding benefits, housing, social care, employment, and taxation.

Funding

Many different types of funding for charities have been hit in the last few years. Partly down to fundraising which has seen a slight decline. However, another problem has been down to the local authorities that have been hit by budget cuts which have been passed onto charities. This is a difficult position for charities who may be struggling to adequately fund themselves with sustainable revenue streams.

A lot of the recent news has suggested that charities do not spend enough money ‘on the cause’. In fact, the opposite is often true. Many charity financial disasters have happened because they seem to invest much of their money into the front line and don’t invest enough in the back-line such as management and systems. Charities need to strike a balance to ensure they fully service their charitable remit whilst also maintaining a stable and sustainable base.

Recruitment

This has become more complicated since the announcement of the National Living Wage increase due in April. Recent research suggests at the moment the charity sector pays 25% of its staff less than the Real Living Wage. Recruiting and retaining staff is also a real problem for the charity sector as many charities struggle to invest in training. They often need to recruit from outside the sector to get the skilled workers they need which brings additional cost.

Conclusion

The charity sector could be facing a difficult year ahead, with the National Living Wage increases in April and recent funding cuts it is certainly not going to make life any easier for them. Where charities are reliant on external funding that is under threat of reduction, they should consider how to maximise self generating income streams to continue the valuable work they do.

How can we help

At Hawsons we have a dedicated team of accountants at our offices in Sheffield, Doncaster, and Northampton. Our dedicated team fully understands the complex, ever-changing regulatory requirements of the charity and not-for-profit sector. Irrespective of your size we wish to support you to maximise the benefits you could achieve through our specialist professional advice.

If you would like to book your first free initial meeting with us click here.

If you would like to find out more about Hawsons visit our website here.

 

More from our charity experts

You can find all of our latest charity sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141
Local Councils Urged to Increase Care Sector Funding

Local Councils Urged to Increase Care Sector Funding

Central Government and Local Councils urged to increase funding levels to prevent job losses in the care sector

Care operators continue to feel the pinch as further National Living Wage and National Minimum Wage increases set to come into force from April 2020.

The increase in National Living Wage could mean that care home jobs would be lost and even worse care home closures or cutbacks that will ultimately affect the standard of care provision. Martin Green, the chief executive of Care England has said that the social care sector has seen major under funding and the government needs to invest into this sector. However, Boris Johnson has recently announced that solution to a social care crisis could take up to five years with a proposal being announced later this year.

Currently 1.4 million people are not getting the care they desperately need and care workers are reportedly being paid a median hourly wage of £8.10. At the current rate of the aging population England will need to employ 580,00 more social care workers by 2035. At this present moment there is around 122,000 job vacancies in England’s adult social care sector.

Prime Minster Boris Johnson has ensured that elderly people that need care will not have to sell their home in order to provide themselves care. He said “Now we have the majority we need; we are going to get on with this so people can get the care they need in their old age but don’t have to sell their home.”

The executive director of the National Care Forum, Vic Rayner has responded to the Prime Minister’s comments: “There is a consensus that our current social care system is in urgent need of reform. It is imperative that the government moves forward on this agenda. The time to act is now. Social care matters to us all.

How can we help?

At Hawsons we have a dedicated team of Healthcare accountants at our offices in Sheffield, Doncaster, and Northampton. Our in-depth knowledge and understanding of the sector are applied and we work closely with our clients, ensuring that changes in the care sector are recognised promptly and appropriate strategies implemented and actions taken. We recognise that no two homes are the same.

If you are someone looking for care our Hawsons Wealth Management team can help find the right care for you. Depending on your situation you may not qualify for funding from the NHS or local authority. Therefore, you will need to look into other funding options and Hawsons Wealth Management will be able to help you to through the options and choose the right one for you.

If you would like to book you first free initial meeting with us click here.

If you would like to find out more about Hawsons visit our website here.

 

More from our care sector experts

You can also find all of our latest care sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Scott Sanderson

Partner, Sheffield

0114 266 7141