Chris Downing, Director of Inspire, the business and tax advisers, answers your questions.

I’m running out of time before Brexit, what do I need to do?

As the negotiations continue, we still don’t know exactly what the situation is going to be come 1 January for UK businesses who import or export goods to or from the EU, but it’s fair to say that things are going to change whether the UK signs a trade deal or not. Here’s some practical steps you can take now to get your business ready.

• UK VAT registered businesses will need an EORI number that starts with GB to move your goods in or out of the EU. If you don’t already have this, you should apply for it as soon as possible.
• Talk to your business customers and suppliers in the EU and agree what actions need to be taken, so that business is uninterrupted.
• If you export your goods to the EU, import VAT and possibly customs duty may be due. You can find out more here about the changes to exporting to individuals customers and to businesses from January 2021.
• If you currently import from the EU, there will also be VAT implications, there’s more details on the changes and process here.

We’re also advising clients to look at cash flow. What would happen if your products are delayed en-route to the UK or on the way to customers as part of an export process? What if parts are delayed coming to you, so that finished products cannot be sent to customers?

If you feel this is going to be an issue, we would strongly recommend you are talking with your bank manager, so that they can understand the issues you are facing ahead of time. This often makes them more understanding and receptive to discussions in the future around any temporary finance you may need to fill any unexpected gaps. If you need assistance with assessing the impact of this, we can help.

I hear the Chancellor’s looking to increase the rate of Capital Gains Tax, when is this likely to be?

The initial findings from the Office of Tax Simplification’s (OTS) report have now been published – and they don’t make a comfortable read for many business owners. According to the review, about £14bn could be raised by potentially doubling the rate of Capital Gains Tax bringing it in line with income tax (with higher rates at 40/45%), and – adding another blow – cutting some of the exemptions.

Although the OTS has published its recommendations for the reforms to the government, it hasn’t offered any firm details in terms of timescales, and when any increases may be introduced.

Actions you can take:

Review your plans now – bearing in mind that the tax rates in place at the moment, may not be around for much longer, consider any actions you can take to crystallise gains now, instead of waiting. Do get in touch if you’d like further advice on this.

• Contact your MP – we’re encouraging our clients to write to their local MP. It’s likely that many MP’s don’t even realise what these reforms would mean. You can find details of how to contact your local MP

The Capital Gains Tax reform is being billed the in the media as a niche increase, but we all know that its impact will be wide-ranging and hurtful to the business owner who is taking risks and potentially, with these reforms, receiving very little benefit for doing so.

I furloughed some of my staff during last month’s lockdown, can I keep them on furlough until business picks up again?

The government’s Job Retention Scheme is open until 31 March 2021. You don’t have to have used the scheme previously, in order to use it this time and you can furlough employees whether or not they have been furloughed in the past.

The government will fund 80% of wages, up to a maximum of £2,500, but the employer will still need to pay the National Insurance and pension contributions.  In order to qualify, employees will need to have been on a payroll RTI submission before 23.59 on 30 October.

Flexible furlough will still apply – so employees can work part-time (paid at their normal rate) and be receive 80% of wages for the time that they’re not working.

The Chancellor said that the scheme will be reviewed in January and he will decide then, when employers may need to start making contributions to employees’ salaries under the scheme.

Claims for the month of November can be submitted now and must be completed by 14 December 2020.  In a change to the guidelines, all new furlough claims (from 1 November onwards) must now be submitted by 14 calendar days after the period that you’re claiming for.

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