On the 8th July 2020, Rishi Sunak (the Chancellor of the Exchequer) set out the next round of financial provisions aimed at counteracting the contraction of the economy due to the impact of coronavirus. The headline policies from the fiscal event, dubbed a 'mini-budget,' are as follows: 1.Furlough Funding Eased - The furlough scheme will gradually wind down before concluding at the end of October. Currently, the Government pays 80% of wages up to £2,500 plus associated National Insurance contributions (NICs) and pension contributions leading to a maximum grant of £2,804 per employee. However, there are several changes proposed in the coming months to ease this finance: August - Employers will now need to pay employers NICs a...

Individuals and businesses with land/buildings may benefit from opting to tax the property for VAT. Furthermore, there may be tax implications to consider when acquiring or selling land/buildings that are already opted to tax. Why Opt to Tax Property? Typically, property that is rented will be exempt from VAT (subject to certain exceptions). To this end, the the owner/business will not charge VAT on rent and will not be able to reclaim VAT on costs. Where the expenses of letting the property are significant, then the VAT on the expenses may represent a material cost. However, owners of commercial (non-residential) property have the option to tax the property, meaning: Output VAT will be chargeable on supplies i.e. rent Inpu...

Domestic Reverse Charge Implementation Delayed In a move described as a ‘victory for common sense’ by the Federation of Master Builders (FMB) chief executive, the implementation of the domestic reverse charge which was due to take effect on the 1st October 2019 will now come into effect on the 1st October 2020. The domestic reverse charge means that customers receiving a service in the constructing and building sector may have to pay the VAT to HMRC instead of paying the supplier. Some 150,000 businesses will be affected by the change. Reasons for the delay HMRC announced the delay on the 6th September 2019 citing concerns from industry representatives and the desire to avoid the changes coinciding with Brexit as the reasons...

From 1 October 2019, a new domestic reverse charge system for VAT will come into effect. This blog will explain how the new system will work and who it will apply to. The Current System Under the current rules, a supplier of construction services is liable for the VAT on the supply of goods and services. In practice, this means that the supplier charges VAT when they bill their customer. Their customer then pays their bill and the VAT to the supplier, who then forwards the VAT payment to HM Revenue & Customs ("HMRC"). However, there have been increased instances of criminal activity in relation to this, whereby the supplier has gone missing, along with the charged VAT before it is paid to HMRC. Therefore, new preventative ru...

If your business imports and/or exports goods with the EU, you may be struggling with the uncertainty around the UK's withdrawal from the EU. In December 2018, HMRC published a letter for businesses that trade with the EU and steps that should be taken to prepare for no deal. This blog will help you to understand these steps and the actions that you should take. Firstly, in the event of no deal, you will be responsible for making customs declarations for your UK-EU trade. In order to ensure that you are ready for this, you should: Register for a UK Economic Operator Registration and Identification (EORI) number. You can do this at gov.uk/hmrc/get-eori. Register with HMRC’s new Transitional Simplified Procedures (TSP) for cus...

With less than 6 weeks to go until most VAT registered businesses are required to comply with MTD, there is still concern that not enough progress has been made on making business owners aware of the new rules. Only 1 in 200 eligible businesses have already signed up to MTD, and HMRC has published research indicating that as at December 2018, 1 in 5 businesses required to join hadn't even heard of it. Adrian Rudd, Chair of the joint CIOT/ATT Digitalisation and Agent Strategy Working Group has said "We note that by far the most common way those who are aware of MTD have been made aware is by their tax adviser or accountant. We and our members will continue to do what we can to raise awareness over the months ahead but it is likely tha...

The taxation of charities differs from that of other types of organisation. In addition to being subject to specific tax obligations, charities are also eligible for a number of tax reliefs. This blog will offer an insight into the obligations that exist, the reliefs that are available, and how to make a claim. What is a charity for tax purposes? According to HMRC, in order to be able to claim for tax relief a charity must be: Based in the UK, EU, Iceland, Liechtenstein, or Norway; Established solely for charitable purposes. HMRC defines this as being for the public benefit and relevant activities include education, saving lives, and relieving poverty; Registered with the Charity Commission or another regulator; and Run ...

Here are some of the highlights from the Chancellor of the Exchequer's 2018 Budget (published on 29 October 2018): Personal Tax The Personal Allowance will be raised to £12,500 and the Higher Rate Threshold (i.e. the amount that an individual can earn before paying higher rate tax) to £50,000 in April 2019 – a year earlier than planned. These levels will remain the same in 2020/21, and then increase by CPI going forward. The final exemption period for Principal Private Residence Relief (PPR) which provides Capital Gains Tax relief on the sale of your home will be reduced from 18 to 9 months. Under the current PPR rules, where you have let a property which at one point was your home Lettings Relief may be available to reduc...

On 13 March 2018, the Chancellor of the Exchequer published the Spring Statement 2018. As promised in his Autumn Statement 2016, the Spring Statement did not contain details of new major tax or spending changes, however the government has published a list of calls for evidence and consultations currently taking place which set out its approach to adapting the tax system going forward. Brief descriptions of the consultations and links to the relevant documents are below: Allowing Entrepreneurs’ Relief on gains made before dilution. The government intend to introduce legislation in the Finance Bill 2018-19 to allow individuals who no longer own 5% of the share capital of a company as a result of an issue of new shares to claim Entr...

In Queen's Club Ltd v HMRC [2017], the First-Tier Tribunal held that the taxpayer was allowed to claim back input tax incurred on the renovation of a café which was available only to members of the sporting club. Background Queen's Club Ltd (the "Club") is a sports club which provides its members with the opportunity to play a number of different sports using its facilities. The Club's premises comprised four buildings, one of which (the "Pavilion") included a café and two bars. In order to encourage greater usage of the bars and café (and increase revenues), the Club refurbished the building by upgrading the café to a full-service restaurant. The Club received a number of goods and services with respect to the renovations...