December 2020

The UK left the European Union on 31 January 2020. The transition period ends on 31 December 2020.

The Covid-19 pandemic has dominated the news headlines this year but Brexit is still progressing. During the transition period, the UK remains in both the EU customs union and single market. Until the end of the transition period (31 December this year), most things stay pretty much the same. So, what do businesses need to think about in terms of UK-EU trade, supply chains, etc. from 1st January?

Brexit could affect your business in a number of ways. For example, businesses that import or export goods between the UK and the EU will need to consider what operational changes they will need to make in advance of January 1st. The UK Government has set up a helpful webpage which includes useful guides and checklists https://www.gov.uk/transition 

A new customs regime will come into force on 1 January 2021. Hopefully a trade deal can be agreed by then, as the final arrangements are still not clear.

UK businesses that trade with countries outside the European Union will already be familiar with an Economic Operation Registration Identification (EORI) number. From 1 January, British companies will not be able to trade with the EU without an EORI. In the absence of an EORI number, goods could be held up at ports.

In addition, non-compliant businesses won’t be able to take advantage of any special measures such as deferred tariff payments that look set to be introduced to smooth the flow of trade.

Another consideration for businesses is taxation. HMRC offers guidance on its website for the future treatment of payments between UK companies and EU member states. As ever, tax can be a complicated subject and it is often best to invest in some tax advice from an expert.

Finally, businesses that trade with the EU may need to consider any additional regulatory obligations that come about as a result of Brexit.  As things currently stand, there are a lot of unanswered questions as we still don’t know if a last-minute trade deal will be agreed between the UK and the EU. Either way, it’s worth keeping an eye on the gov.uk website for any additional guidance or updates.

We have put together a Brexit Newsletter with more information and useful links, please click here to view. Please note that the situation is fast moving and information is constantly changing.

Time consuming and expensive HMRC tax investigations are on the increase, any individual or organisation is at risk of an investigation even if you have done nothing wrong.

£35 billion is the estimated ‘tax gap’ between the amount HM Revenue & Customs (HMRC) should collect and the amount actually collected, and over half of this is attributed to small businesses and individuals. Due to sustained efforts to tackle non-compliance, there has been a long-term reduction in the overall tax gap, from 7.2% in 2005-06 to 4.7% in the tax year 2018-19, its lowest recorded rate.

Tax investigations continue to represent the main method HMRC employs to reduce this deficit. Some are launched at random, whilst others are targeted towards specific business sectors. Either way, we have noticed a continue increase in activity as their computer systems become more extensive and sophisticated. All taxpayers are at risk.

Humphrey & Co has offered a Tax Investigation Service (TIS) to our clients for several years now, and we invite all our clients to share in the protection offered. Tax investigations can be costly. Investing a small amount into our Tax Investigation Service now means that you will receive complete support if HMRC targets you, at no additional expense.

We believe that we know you and your business best and we want to be there for you when you need us most. We will manage your case from start to finish, reducing stress and providing peace of mind.

Please visit our website for further information on the Tax Investigation Service and how it can protect you.