The UK government has unveiled a £20 million Brexit support package to help small and medium-sized enterprises (SMEs) with changes to customs and tax rules when trading with the EU.
The SME Brexit Support Fund aims to help businesses prepare for the implementation of further import controls which come into force later this year.
Businesses who trade only with the EU and are therefore new to importing and exporting processes will be encouraged to apply for grants of up to £2,000 for each trader to pay for practical support, including training and professional advice, to ensure they can continue trading effectively.
Businesses must meet certain criteria, including having been established in the UK for at least 12 months, having fewer than 500 employees and no more than £100 million in turnover.
The closing date for applications is 30 June. HMRC states that the fund may close for applications earlier if the full £20 million is allocated.
Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said:
‘We have been asking for proper financial assistance of this scale so that a cash-strapped small business can afford to buy-in expertise, training and practical support. The new fund will make a significant difference.’
The government has published over 30 updates, consultations and documents on the UK’s first ever Tax Day.
The announcements, which would traditionally be published at Budget, have been released later to allow for scrutiny from stakeholders.
It was announced that HMRC will tighten rules to force holiday let landlords to prove they have made a realistic effort to rent properties out for at least 140 days per year. There are suspicions that many simply declare that they will do this but leave the properties empty.
Declaring a home to be a holiday let means that it is exempt from council tax and owners pay business rates instead.
The Treasury plans to cut the rate of domestic Air Passenger Duty. The consultation also seeks views on supporting the UK’s commitment to net zero emissions by 2050 by increasing the number of international distance bands.
Inheritance tax (IHT) reporting regulations ‘will be simplified’ to ensure that from 1 January 2022 more than 90% of non-taxpaying estates will no longer have to complete IHT forms when probate or confirmation is required.
Jesse Norman, Financial Secretary to the Treasury, said:
‘We are making these announcements to increase the transparency, discipline and accessibility of tax policymaking.
‘These measures will help us to upgrade and digitise the UK tax system, tackle tax avoidance and fraud, among other things.
‘Many of today’s announcements form a key part of the government’s wider 10-year plan to build a trusted, modern tax system.’
The details of the Finance Bill 2021 have been published by the government.
The Bill outlines the key measures set to be brought into legislation, including many measures announced in the recent 2021 Budget.
In his Budget speech, Chancellor Rishi Sunak announced an extension of the stamp duty holiday in England; a super-deduction capital allowance; extensions of the Coronavirus Job Retention Scheme (CJRS) and the Self-employment Income Support Scheme (SEISS); and an extension of the VAT cut for the tourism and hospitality sectors.
The Bill will make sure the measures announced in the Budget take effect from 6 April 2021. It also legislates for tax changes that were previously consulted on and subsequently confirmed at the Budget.
The government is to extend business rates relief with a £1.5 billion fund targeted at those businesses unable to benefit from the current COVID-19 support.
Retail, hospitality and leisure businesses have not been paying any rates during the pandemic, as part of a 15 month-long relief which runs to the end of June this year.
However, many businesses ineligible for reliefs have been appealing for discounts on their rates bills, arguing the pandemic represented a ‘material change of circumstance’ (MCC).
The government says that market-wide economic changes to property values, such as from COVID-19, can only be properly considered at general rates revaluations, and will therefore be legislating to rule out COVID-19 related MCC appeals.
Instead, the government will provide a £1.5 billion pot across the country that will be distributed according to which sectors have suffered most economically, rather than on the basis of falls in property values. It says this will ensure the support is provided to businesses in England in the fastest and fairest way possible.
Chancellor of the Exchequer Rishi Sunak said:
‘Our priority throughout this crisis has been to protect jobs and livelihoods. Providing this extra support will get cash to businesses who need it most, quickly and fairly.
‘By providing more targeted support than the business rates appeals system, our approach will help protect and support jobs in businesses across the country, providing a further boost as we reopen the economy, emerge from this crisis, and build back better.’
Selling a Residential Property and reporting the Sale to HMRC
In the Budget the Chancellor extended the period for Zero stamp duty on property purchases up to £500,000 until the 30th June 2021. After this date the zero threshold will reduce to £250,000 up to the 30th September 2021 and then drop down to £125,000.
This is great news for buyers and a further boost to the housing market.
Please remember that if you are buying a second property then the additional stamp duty still applies at a 3% surcharge.
Property bought in a company however will benefit from the new rates up to the 30th June 2021 provided the property is under the £500,000 limit.
Ask us for advice on this aspect if you are looking to buy a residential property.
What if you are a seller?
As a seller this should increase your chances of selling your property but beware if the property is not your main residence and you have potential capital gains tax to pay you must report the sale within 30 days to HMRC.
This new legislation came in for disposals after 6th April 2020.
When do I have Capital Gains Tax To Pay?
If the property is your main home, then you will not have to pay capital gains tax as it qualifies for Principle Property Relief.
If however you own another residential property perhaps you have bought a holiday home that just the family uses, you have bought a property for your children to live in whilst at university or you have residential property that you let out, then the new legislation may apply to you.
Capital Gains Tax is calculated based on the price you sell the property for after allowing for the price you paid for the property less other deductible costs.
Will It Apply to Me?
The flow chart below is a simple guide as to whether you will have to report the sale to HMRC.
What to Do to report the Gain
Step One
Work out if you have any capital gains tax to pay on the property. To do this you will need the following information:
calculations for each capital gain or loss you report
details of how much you bought and sold the asset for
the dates when you took ownership and disposed of the asset
any other relevant details, such as the costs of disposing of the asset and any tax reliefs you’re entitled to
If you have a gain then move on to :
Step Two
Create a Capital gains Tax Gateway account with HMRC if you do not already have one
This must be done within 30 days of the property disposal date.
Step Four
HMRC will send you a letter advising you what you owe and giving you a reference number and details of how to pay
Do I have to do anything else?
Yes, if you complete a self-assessment tax return the gain details should also be recorded on to this return as part of your normal self-assessment completion.
Don’t wait until the deadlines for your self-assessment return as you may then face interest on the capital gains tax due.
This is a complicated area of tax law and if you need any advice on this we can assist and complete the calculations and the returns on your behalf.
We can provide a quote for this work to be done for you – Obtain Quote Now
What to Do to report the Gain
