VAT Will Still Be With Us Whether It`s A Brexit Deal Or No Deal

Thursday, August 30th 2018 4:44pm

There has been a lot of talk over the last few weeks about the possibility of the UK being unable to broker a deal with the European Union for when they finally leave next year, although recent indications do seem to show that a deal could be closer now than it has been for some while.

But whether there is a Brexit deal or a no deal there is very little doubt that VAT is here to stay as it is far too valuable for HMRC to let it go. The Department for Exiting the European Union has issued a number of guidelines giving details on what is likely to happen if it does come to pass that there is no deal and some of these details concern VAT and how Brexit will affect businesses.

VAT Guidelines

The main headlines of these guidelines concerning VAT, as published on the Business Advice website are as follows:

• The UK will continue to have a VAT system after it leaves the EU
• Businesses will need to apply the same customs rules to goods moving between the EU and the UK as they would for the rest of the world
• Postponed accounting for import VAT will be applied on goods coming into the UK
• VAT will be payable on goods entering the UK as parcels sent by overseas businesses (currently true for parcels from outside the EU). For parcels worth up to £135, a technology-based solution will be applied where overseas businesses register with HMRC in order to pay VAT
• The UK will cease to be a member of EU VAT IT systems including the VAT Mini One Stop Shop.

Confidence In Goods & Services

When the UK leaves the EU it is vital that confidence and trust in all the goods and services from this country are maintained so that businesses will be affected as little as possible by the changes.

If you own a business and you would like any advice on your business and how it will be affected by Brexit please give us a call for a chat in the first instance on 028 3752 2909 and we will be glad to assist you.

Hello and welcome to the blog of WHR Accountants. Today we have news that accountancy has proven one of the top 5 industries for salary growth over the last 12 months which seems to show that the sector is in a pretty healthy state. The four industries that had a higher salary growth were the car industry, property, manufacturing and the legal sector. 
The average salary in the accountancy industry rose 6.4% in February 2017 compared to the year previously. The average salary this February was £33,261 compared to £31,253 the previous year. 

Whilst jobs and pay in accountancy are above the national average, applications for jobs have fallen by nearly 10% which does not seem to add up. But Lee Biggins, who is the founder and managing director of CV-Library, believes this is the norm for the time of the year. He said:

“It’s unsurprising to see application rates dropping off after January in the accounting industry; the mantra of ‘New Year, new me’ means January is traditionally one of the busiest periods for recruiters, with job applications vastly increasing in number.

“The challenge for businesses now is to tap into the talent pool while it’s still available. As a result, we’re seeing increasingly fierce activity from companies, with job postings and salaries on the rise,”

We believe that the accountancy profession is still one of the best professions to join and will always be so. It is an industry that will always be required by other businesses and it is a respected occupation that offers a variety of work to candidates. You also get to meet a wide variety of people from all walks of life and it is a job that will challenge you and that you can grow into.

The above quote was taken from the Economia website and you will find the full article at the following link: Accountancy And A Rise In Salaries

If you need an accountant for your business we would love to hear from you. Check out the website and give us a call on 028 3752 2909.

It has been reported that UK businesses owe around £1.8 billion in corporation tax which is up 15% from the previous year, as many businesses find it harder and harder to keep up with their tax bills. The total corporation tax owed is now up to £1.82 billion, up from £1.59 billion last year. 
It could be the case that businesses will have to find different avenues and sources of revenue which will enable them to keep afloat regarding their tax bill, as the situation is hardly likely to improve as we move into the post Brexit era where many companies may soon be finding life tough. Many customers who are also businessmen are delaying payments since Brexit and this is having a knock on effect right through the business world. 

Conrad Ford, the CEO of Funding Options who are an online business finanace supermarket, said that: “We have seen an increasing number of companies come to us for funding to pay their overdue tax bills. These figures demonstrate the growing pressure on cashflow for companies, which could get worse following the outcome of the EU referendum.”

The pressure is exacerbated even further by the fact that the HMRC are clamping down even harder on businesses who do not pay their taxes. This includes penalties for late payments, seizing of company assets and sending debt collectors to businesses to collect money owed. Small companies it seems are particularly at risk of getting behind with their taxes post Brexit, and when previously they would rely on a bank overdraft to tide them over, they increasingly find that this avenue is now closed as banks have cut overdrafts by around 37% over the last 5 years. 

But one small glimmer of hope on the horizon is the Bank Referral Scheme, which requires banks to offer any small business a referral if they reject a loan application from them, to 3 designated finance platforms which include Funding Options.

If you wish to read more on this story you can visit the Accountancy Age website at the following link: Businesses And Corporation Tax

The accountancy group, UK200Group, have spoken out over Her Majesty’s Revenue & Customs ‘Making Tax Digital’ plans, as they are concerned that some businesses will find it difficult to cope with the amount of information it will have to process under the new scheme. 
The Group are worried that it will put undue stress and pressure on companies who have to implement the scheme and use the new software, and that this could become a burden they could well do without as they also have to come to terms with Brexit and all the changes this will entail. 

There will be new day to day reporting requirements for some businesses which are bound to take up more time and manpower and there is a concern that this could harm productivity which would be the opposite of what the scheme was introduced to do. So although the Group sees the benefits of making the tax processes digital it believes that more consultation is required to knock the plans into shape so that they will be easier to implement for all concerned.

Andrew Jackson, who is head of tax at the UK200Group said: “I think what they’ve failed to identify is that business people aren’t doing it now because of the cost of implementing an accounting system.

“This isn’t just financial, but includes the time and effort spent learning how to use it and keeping it up to date.”

And he also went on to say that it was the smaller companies who will find it more of an issue, as the cost of setting up the new digital tax system will be the same whatever the turnover of the business. And learning the skills required to use it will take time that could be used on other areas of their business.

You can read more about this story by going to the Brookson website at the following link: Implementing `Making Tax Digital Plans` A Concern For Businesses

If you require any help with any tax issues, or any other financial issues regarding your business, please contact WHR Accountants on 028 3752 2909, and we will be glad to have a chat with you.

The Institute of Chartered Accountants has urged the Government to keep the pledge they gave to place company employees in the boardrooms after there were signs that the promise given by Theresa May to do this was in serious jeopardy of being watered down. A recent Green Paper on this issue only stated that they were inviting views on strengthening “the connection between the boardroom and the workforce and other interests”. 
The Institute of Chartered Accountants in England and Wales believe that having company employees on the board of companies will do a lot to help modernise them, and could help to curb any excessive pay rises for the bosses, give the employees a real representation in the boardroom to defend their interests, along with making sure the company is held to account for all the decisions that they make. 

Chief executive Michael Izza of the Institute of Chartered Accountants in England and Wales said on this subject: “When the Cadbury Code was drawn up in 1992, here at Chartered Accountants’ Hall, it was highly controversial and faced spirited opposition. Yet for a listed company today to ignore its principles would be unthinkable,” said chief executive Michael Izza in a letter to the Telegraph.

“I firmly believe that in another 25 years we will hold the changes that emerge from this process to be as self-evident as the Cadbury Code is now.”

The overhauling of corporate governance also hopefully will include forcing firms to declare the gap between executive and other peoples wages, and giving greater powers to shareholders to vote down pay deals.

You can read more on this story at The Telegraph website by going to the following link: Accountants Call For Workers To Be Placed In The Boardroom

And finally if you want any help with any aspect of accountancy please ring us for a no obligation chat in the first instance on 028 3752 2909.

Reports show that the amount of capital gains tax people in the UK paid last year was around £6.9 billion, which is up a whopping 24.6% from the previous year. This jump is believed to be down to increasing asset values and buy-to-let investors. The basic capital gains tax rate was 18% until 2010 when George Osborne increased the rate of the tax to 28% and this has also led to increasing the amount of tax collected. The £6.9 billion amounts to approximately 1.4% of all taxes collected last year. 
Lucy Brennan, who is a partner at Saffery Champness, commented regarding the rise: 

“The reported rise in capital gains tax liabilities was likely to be driven, by rising house prices and larger volumes of sales. With the Autumn Statement on the horizon, the chancellor is likely to mitigate against any potential shortfall in the public coffers and capital gains tax reliefs, along with pensions relief.”

And Mark Giddens, who is a partner at UHY Hacker Young, said that: 

“As house prices rise, more and more buy-to-let investors are finding that their property sales are leaving them exposed to significant Capital Gains Tax bills. In recent years, it hasn’t been uncommon for buy-to-let investors to see their properties appreciate by £50,000 or £100,000 in a relatively short period in London and the South East. Those gains would have been taxed at 18% a few years ago, but the 2010 changes mean that more of them are now taxed at 28%.”

Buy to let landlords have certainly been hit by the higher rate of capital gains tax with an average bill for this tax around £28,500. Interestingly, and perhaps not surprisingly, it is London and the South East who pay 52% of all the capital gains tax paid in the UK, whilst Scotland, Wales and Northern Ireland pay just 8% of the total combined. 

To read more on this story you can go to the Accountancy Age website which you will find at the following link: Large Increase In Capital Gains Tax Payments

If you require any advice on capital gains tax or any other taxes please contact WHR Accountants by giving us a call on 028 3752 2909.