Leaving the EU and other matters
This is likely to affect everyone. The paragraph on due dates for payment of taxes also affects everyone. However, if you feel it does not apply to your personal circumstances at the moment, please feel free to pass it on to anyone to whom you feel it would be helpful.
LEAVING THE EU
I have logged onto the Government gateway and answered its questions on what I need to do to prepare for life outside the EU as if I were a typical J. Richard Hildebrand & Co. client. Most of the clients of the practice work in the creative industries, and/or are highly mobile, and/or are not of U.K. parentage.
What follows below is a list of items for attention based on what happened when I logged on to the Government. We cannot provide specific guidance on all of them, and therefore advice should be obtained from your trade body or professional association, or from the Government, in case of doubt.
We would advise you to check the following:
- You may or may not be able to take creative, cultural or sports goods into or out of the EU for business. This includes musical instruments, stage sets, and film production equipment – even makeup could be affected.
- If you provide e-commerce services to the EU or to Norway, Iceland or Lichtenstein, you should check the terms of the e-commerce directive after the transition period.
- There will be new rules affecting copyright licenses, registered design protection, and for reporting unfair business practices after 1 January 2021. Please refer to government and industry body guidance.
- When travelling to and within the EU, you should ensure that you have travel insurance with health cover, and check if you need an international driving permit.
- You should also check the Government guidance to see if you need a work permit for certain European countries if you are doing a job there, and to ensure that you meet all the immigration rules.
- You should check if your mobile phone has changed its roaming charges for Europe.
- If you happen to be non-resident in the UK, and have an UK bank account, it is possible that your bank may withdraw banking facilities from you. This is because the bank would have to pay for a banking license, and it may deem that too expensive.
- After 1 January 2021, if you import from the EU you will need an EORI number. You have to log on to the Government Gateway to get one. It normally takes about a week for it to arrive, but it may now take longer as more businesses are in the course of applying.
- If you have an e-mail address ending in “.eu”, you may not be able to use it after 1 January 2021 unless you are resident in the EU. It would be advisable to get in touch with whoever provided you with your domain name, to amend the address.
- Regarding all online software – Quickbooks, Xero, Free Agent, and so on – you now have to reconnect your bank feeds at least every 90 days. We cannot do this for our clients as we are not signatories on their bank accounts. I have asked my team to produce regular reminders on this point to clients for whom we assist with their VAT returns.
At the time of writing this, we do not appear to have a “deal” with our former EU partners. Other issues may come to light depending on what may or may not be successfully negotiated.
If I can be allowed an opinion; if we had sat down with our European partners after the vote, worked out how our relationship with them would operate going forward, drafted a binding memorandum of agreement on matters of importance, and then invoked Article 50, we would have a much more certain environment for business now. But hey, I wasn’t the Government.
Since 6 April 2020, if you dispose of a property that is not your main residence and/or on which a capital gain may arise, you have to report the disposal to HM Revenue and Customs and pay the capital gains tax within 30 days of disposal.
For this purpose, it is necessary for you to log on to HMRC and open up a capital gains account. There have been technical problems with the HMRC software (surprise, surprise) that have made this process next to impossible without help. We intend to publish a detailed update on this shortly. Alternatively, if you are now contemplating disposing of a property that may give rise to a gain you could arrange to come and see us with your laptop and we will open up the account for you.
If you are unsure about this please call the office.
CONSTRUCTION INDUSTRY ISSUES
From next March, if you are in the construction industry, VAT registered, and making supplies to other construction industry businesses, you may have to apply the “Domestic Reverse Charge Scheme” whereby the recipient of the service will have to account for the VAT. We intend to produce a general update with some worked examples of this early in the New Year, which should be on our website.
DUE DATES FOR PAYMENT OF TAXES
For the sake of consistency, all our letters and e-mails to you advising on tax payments will recommend payment on the normal legal due dates without any allowance for Government deferrals. If you have problems paying your taxes on time please contact us for advice on your situation.
The above note is for general guidance only. Please contact us for specific advice in your circumstances before taking any action.
This will most likely be the last update of any kind produced by us before 2021. Please accept our best wishes, from all of us, for Christmas and the New Year.
– By Stephen Handley, FCCA