Anna’s Accountancy Alerts – Week 35 (30th November – 6th December 2020)

Anna Goodwin Accountancy

Brexit Imports And Exports

From 1 January 2021, the UK will operate a full external border with the EU, which will entail major changes for imports and exports to and from the trading bloc. From 1 January 2021, declarations will be needed to import or export specific (limited) goods categorised as ‘controlled’.

However, for non-controlled goods brought from the EU to GB, import controls apply in three stages: January, April and July 2021.

Some changes will apply to all goods movements, and will involve customs declarations, customs duties and VAT on imports, and safety and security declarations. ‘Additional requirements’ come in, but only affect certain specific goods movements, such as foodstuffs.

Action points to consider now include:

Economic Operators Registration and Identification (EORI) numbers: from 1 January 2021, an EORI number with the prefix ‘GB’ is needed to move goods between the UK and the EU, unless you only move goods between Northern Ireland and Ireland.

Remember that from January 2021, it will be important to think about both the UK and EU sides of the equation: to comply with EU requirements, you will, for example, need an EU EORI number if your business makes customs declarations or gets a customs decision in the EU.

Using a customs intermediary: given the complexity of UK and EU customs declarations, you may want to engage a customs intermediary to deal on your behalf.

Postponed VAT accounting for goods imported from the EU: from 1 January 2021, import VAT applies to imports from the EU. Using ‘postponed VAT accounting’ from 1 January 2021 lets you account for import VAT on your VAT return, giving the potential to declare and recover import VAT on the same return.

Delaying customs declarations and payment of tariffs: when the UK’s full suite of border controls are in place in July 2021, full customs declarations and payment of customs duties, as set out in the new UK Global Tariff (or as specified in any trade deal with the EU) must take place when goods are imported from the EU. But from 1 January 2021 to 30 June 2021, most traders with a good compliance record can defer declaration and payment for up to six months on imports of standard goods from the EU.

Paying HMRC

here are several ways to pay HMRC. You can do this by:

  • Direct Debit
  • Faster Payment
  • BACs
  • CHAPs
  • personal debit card
  • corporate credit and debit card*.

*Payments made by corporate credit card incur a surcharge which goes direct to merchant acquirers, card schemes and card providers.

This will also apply to corporate debit cards from 1 November 2020.

You may want to consider another payment method if you do not wish to incur this surcharge.

Bounce Back Loan

The Bounce Back Loan Scheme (BBLS), launched in May 2020, was introduced to help smaller businesses impacted by coronavirus. It has been extended 31 January 2021.

You can borrow from £2,000 and up to 25% of business turnover (the maximum amount available is £50,000).

No interest payable in the first twelve months

The interest rate for this loan is 2.5% per annum.

No repayments are due during the first twelve months.

Initially the loan period was six years, but this has just been extended to ten.

You can ‘top up’ your bounce back loan. 

This applies to businesses that haven’t already borrowed the maximum amount permitted under the scheme (ie, 25% of total turnover).

This option can only be used once.

It’s been available since Tuesday 10 November from certain lenders, while other lenders will be offering the option soon – use the British Business Bank website to see which lenders are offering top-ups already.

This is how it’ll work:

  • The minimum top-up available is £1,000.
  • You must top-up from your existing BBL lender.
  • The repayment and interest-free period is SHORTER for top-ups – the countdown starts when you originally took out the loan.

You’ll need to contact your lender to apply.

Stay Up-To-Date With Coronavirus & Brexit News

Coronavirus has affected us all. Whether you’re a sole trader, employer or employee. Stay up to date with the latest news – including government support, tax implications, and more.