The Government has now announced the revised transitional arrangements that will apply in the event of a no-deal Brexit to EU, EEA and Swiss citizens and their close family members arriving in the UK after Brexit, replacing those set out in a January 2019 policy paper issued under the previous Prime Minister, Theresa May. The Government’s new policy paper means that law-abiding EU, EEA and Swiss citizens arriving in the UK after a no-deal Brexit and before the end of 2020 will be able to enter, live, work and study as they do now. The new transitional arrangements provide that:
There will also be some new border controls to make it harder for serious criminals to enter the UK.
EU, EEA and Swiss citizens are their family members who are already living in the UK before Brexit still have until at least 31 December 2020 to apply to the EU Settlement Scheme for settled or pre-settled status.
Irish citizens’ rights are unaffected by the new arrangements, and they can continue to come to the UK after Brexit to live and work.
The Information Commissioner’s Office (ICO) has published dedicated guidance to assist small and medium-sized businesses in their preparations for a no-deal Brexit and has urged them to “prepare for all scenarios” to maintain data flows when the UK leaves the EU. The guidance for small and medium-sized businesses is not entirely new as the ICO has, in fact, tailored its previously published no-deal Brexit guidance to be more relevant and accessible to smaller businesses.
At the moment, personal data flow is unrestricted because the UK is a member of the EU. In the event of no deal, EU law will require additional measures to be put in place when personal data is transferred from the EEA to the UK in order to make such data transfers lawful. The ICO’s guidance sets out steps to take to keep personal data flowing, such as using pre-approved contract terms. It says that:
The Chancellor of the Exchequer Sajid Javid has said that the Government will reintroduce duty-free shopping with EU countries in the event the UK leaves the EU without a deal. This would mean that passengers travelling to EU countries would be able to buy beer, spirits, wine and tobacco without duty being applied in the UK.
According to HM Treasury, the decision to reintroduce duty-free shopping in UK ports, airports and international train stations would mean that:
This change would entitle travellers leaving the UK to visit EU destinations to benefit from the duty-free prices currently available to those travelling to non-EU destinations. The Government has also confirmed that a consultation will be launched to examine its long-term duty-free policy.
Entrepreneurs' relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available, CGT of 10% is payable in place of the standard rate. There are a number of qualifying conditions that must be met in order to qualify for the relief.
When the relief was first introduced there was a lifetime limit of £1 million for gains. This was increased to £2 million from 6 April 2010, to £5 million from 23 June 2010 and to £10 million from 6 April 2011. This is a lifetime limit which means that individuals can qualify for the relief more than once subject to an overriding total limit of £10m of qualifying Capital Gains. There are time limits that must be met to make a claim.
To qualify for relief, you should be either an officer or employee of the company and own at least 5% of the company and have at least 5% of the voting rights. There are other qualifying conditions that must be met in order to qualify for the relief.
The minimum period during which certain conditions must be met in order to qualify for Entrepreneurs' relief increased from one to two years from 6 April 2019.
There is also a sister relief called Investor’s relief which has a separate £10 million lifetime cap. This is useful for investors who do not meet the officer or employee requirement for Entrepreneurs' relief.
There are a number of reasons why a limited company may no longer be required and can be shut down. This may be because the limited company structure no longer suits a client's needs, the business is no longer active, or the company is insolvent. You will usually need the agreement of all the company’s directors and shareholders to close down the company.
The method for closing down a limited company depends on whether it is solvent or insolvent. If the company is solvent, you can apply to get the company struck off the Register of Companies or start a members’ voluntary liquidation. The former method is usually the cheapest. You should also make sure that no business assets are left as any funds in business bank accounts could revert to the Crown.
Where a company is insolvent, the creditors’ voluntary liquidation process must be used. There are also special rules where the company has no director, for example if the sole director has passed away.
A company can also elect to become dormant. A company can stay dormant indefinitely, however there are costs associated with this option. This might be an option if, for example, a company is restructuring its operations or wants to retain a company name, brand or trademark. The costs of restarting a dormant company are typically less than forming a new company.
There are rules that businesses must follow when they are reporting employee changes. These changes must be sent to HMRC using a Full Payment Submission (FPS). The FPS is a submission that you need to make to HMRC every time you pay your employees and must be submitted on or before the usual date you pay your employees. The information provided on an FPS helps HMRC ensure that they have the up-to-date information on your employees.
Additional information is required on your FPS if:
You may also need to tell HMRC if an employee:
Now is the time that many businesses are planning a Christmas celebration for staff as well as possibly for partners/spouses, clients and prospective clients.
The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax purposes. If you meet the various criteria outlined below, then there is no requirement to report anything to HMRC or pay tax and National Insurance. There will also be no taxable benefit charged to employees.
VAT incurred on Christmas parties for your staff can be recovered subject to the usual rules. If staff partners/spouses or clients are also invited to the event, the input tax has to be apportioned as the VAT applicable to non-staff is not recoverable. However, if non-staff attendees make a contribution to the event, all the VAT can be reclaimed and of course output tax should be accounted for on the amount of the contribution.
It is important to pay attention to the nuanced tax rules to ensure that your party is tax exempt.
The Annual Investment Allowance (AIA) is a generous tax relief that was first introduced in 2008. The AIA allows for the total amount of qualifying expenditure on plant, machinery, commercial vehicles and other qualifying equipment to be deducted from your profits before tax.
The AIA can be claimed by an individual, partnership or company carrying on a trade, profession or vocation, a UK non-residential property business or a furnished holiday let. Only partnerships or trusts with a mixture of individuals and companies in the business structure are unable to qualify for AIA.
The AIA was permanently set at £200,000 for all qualifying expenditure on or after 1 January 2016. However, this limit has been temporarily increased to £1 million for a 2-year period from 1 January 2019 to 31 December 2020. This increased limit is a generous allowance and should cover the annual spend of most small and medium sized businesses.
The AIA does not apply to purchases of cars.
If you are thinking of incurring large items of capital expenditure for your business over the coming months, you should ensure that any purchase is properly timed to take full advantage of the temporary increase in the AIA limit.
There is a significant amount of information that can be obtained from Companies House. Companies House is responsible for incorporating and dissolving limited companies, examining and storing company information and making company information available to the public.
Much of the company information available can be accessed free of charge. This is in line with the Government’s commitment to free data and means that all publicly available digital data held on the UK register of companies is accessible in this way. These records provide access to over 170 million digital records on companies and directors.
There is also a service called WebCHeck. This allows you to view a company's filing history and purchase copies of document images as well as a selection of company reports. You can also elect to monitor a company and receive email alerts of any new documents filed at Companies House. This can be a useful thing to sign up for as this would help you ensure there are no unexpected filings made for your own company.
The VAT rule changes for building contractors and sub-contractors that were expected to come into effect imminently, have been delayed for 12 months until 1 October 2020.
This surprise announcement followed intense lobbying by the construction industry who have long argued that many businesses in the sector were unprepared for the change. The planned introduction of the new rules was also conflicted with the current EU exit deadline next month.
In fact, a coalition of fifteen of the UK’s leading construction associations had written to the Chancellor last month asking for the impending changes to be delayed for 6 months. Delaying the introduction of the new rules should reduce the burden on the construction industry at a critical time.
The new rules will make the supply of construction services between construction or building businesses subject to the Domestic Reverse Charge. The reverse charge will only apply to supplies of specified construction services to other businesses in the construction sector. From 1 October 2020, sub-contractors will no longer add VAT to their supplies to most building customers, instead, contractors will be obliged to pay the deemed output VAT on behalf of their registered sub-contractor suppliers. This is known as the Domestic Reverse Charge.
HMRC has said that they recognise some businesses have already changed their invoices to meet the needs of the reverse charge and cannot easily change them back in time. Where genuine errors have occurred, HMRC will consider the fact that the implementation date has changed.
The news of the 12-month delay has been warmly welcomed by the construction industry and will give businesses who had not properly prepared for this change time to act. However, the very short notice of this delay will impact on those businesses who had acted diligently and spent time and money preparing for the change, as they will now have to reverse their changes and moth-ball them until next year.