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VAT and Brexit

HMRC have not yet issued any guidance as to how imports and exports to the EU and out with the EU should be recorded for VAT return purposes after 31 January 2020, what happens with the reverse charge, and what should be recorded in boxes 8 & 9 of the VAT return. The last guidance given was in the case of a no deal Brexit and we are monitoring any new advice as it is issued.

HMRC have said:

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Increased NMW rates from April 2020

Some three million workers are set to benefit from increases to the National Living Wage (NLW) and minimum wage rates for younger workers from 1 April 2020.

The compulsory NLW is the national rate set for people aged 25 and over. The NLW is enforced by HMRC alongside the national minimum wage (NMW), which they have enforced since its introduction in 1999.

Generally all those who are covered by the NMW, and are 25 years old and over,…

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CGT on cryptoassets

Cryptoassets are a relatively new type of asset that have become more prevalent in recent years. New technology has led to cryptoassets being created in a wide range of forms and for various different uses.

Cryptoassets (or ‘cryptocurrency’ as they are also known) are cryptographically secured digital representations of value or contractual rights that can be:

– transferred
– stored
– traded electronically

While all cryptoassets…

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Loan charge repayments deferred

In September 2019, the government commissioned Sir Amyas Morse to conduct an independent review of the loan change (the review). The review was published on 20 December 2019 along with the government’s response, which confirmed that it would accept all but one of the review’s recommendations.

The main change is that the government has agreed to defer the loan charge repayment date to September 2020.

The Treasury has also decided to limit the loan charge cut-off date to…

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Business mergers and changes of ownership – payroll issues explained

In the December 2019 issue of Employer Bulletin, HMRC set out the action required to avoid any problems when merging or changing ownership of a business, to ensure all employees’ payroll details are transferred to the new business.

When a business merges or changes ownership, employers have to contact HMRC to confirm if the business change should be treated as a merger or a succession. This affects whether the business can continue to use its current employer reference or needs to apply…

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Another IR35 loss for HMRC

HMRC have faced another defeat in a tax case involving the IR35 intermediaries’ legislation. In RALC Consulting Ltd v HMRC [2019] TC 07474, the First Tier Tribunal (FTT) allowed an appeal against HMRC’s determination that IR35 applied because of a ‘hypothetical contract’ between various parties making up a service provider chain lacked the requisite ‘mutuality of obligation’.

RALC Consulting Ltd (RALC) (the appellant), was the personal service company (PSC) of IT consultant Richard Alcock, who was the company’s sole director and…

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HMRC advisory fuel rates from 1 December 2019

HMRC have published company car advisory fuel rates for use from 1 December 2019.

The rates apply when employers reimburse employees for the cost of fuel for business travel in their company cars or require employees to repay the cost of fuel used for private travel. HMRC review rates quarterly on 1 March, 1 June, 1 September and 1 December.

The rates applying from 1 December 2019 are as follows:

Petrol and LPG

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What does the General election mean for tax?

Following the General election on 12 December, Prime Minister Boris Johnson has confirmed that Sajid Javid remains as Chancellor of the Exchequer and no other changes at HM Treasury have been announced. The Prime Minister has however, confirmed that a more significant cabinet reshuffle will take place after the UK leaves the EU on 31 January 2020.

The Conservative manifesto set out a fairly limited number of tax pledges, with commitment to a triple lock on income tax, national insurance contributions (NICs)…

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Should I incorporate my business?

As things currently stand, the expected cut in the main rate of corporation tax to 17% from April 2020 is unlikely to happen, but current corporation tax rates remain pretty favourable. There are also other areas where company formation may help save tax.

The costs and regulations involved with running a company are usually greater than trading as a sole trader or in partnership, and should not be overlooked. In addition, incorporation generally means an increase in administration, which some businesses may find burdensome.

The starting point for dealing with…

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Tax-free Christmas parties

Whilst the tax legislation does not include a specific allowance for an employer providing a Christmas party for employees, HMRC do allow limited tax relief against the cost of holding a social function for employees, providing certain conditions are met.

Broadly, a social event – which of course, includes the annual Christmas party – will qualify as a tax-free benefit if the following conditions are satisfied:

– The total cost must not exceed £150 per head, per year;
– The event must be primarily for entertaining staff; and
-…

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