Need To Know: Your Business Updates for January 2020

  • 01 Jan 2020

Welcome to the January 2020 'Need to Know' update. You'll find the latest key information on the Loan Charge, Business Rates, the NIC threshold and VAT fraud

Business Rates discount is welcomed by FSB

The Federation of Small Businesses has welcomed the Government’s announcement on the extension of the business rates retail discount in England.

FSB National Chairman Mike Cherry said: “We’ve fought hard to secure an extension of the business rates retail discount. Today, we’ve seen the first step towards that extension being enshrined in law.

“Our small high street businesses are faced with a hugely challenging environment – confidence among small retailers has tumbled to new depths this year. This reduction in the £25 billion business rates burden promises to help breathe new life into our small shops, restaurants and cinemas.


“It’s vital that this Queen’s Speech is now followed-up with a business-friendly Budget in the new year, one that encompasses the fundamental review of the regressive rates system promised today.   

“Employment costs have spiralled over the last 12 months, with increasing numbers of businesses citing them as a barrier to growth. It’s critical that the government delivers on its commitment to increase the employment allowance for small firms.  

“Small businesses are looking to this new administration to inject some stability and certainty into the Brexit process. Swiftly agreeing a future trading relationship with the EU – and countries beyond the bloc – should help to reinject some confidence into the small business community. All future UK trade agreements must include a small business chapter.  

“On immigration, it’s important that this new government remembers that many small businesses rely on low and mid-skilled employees who have come here from outside the UK. More than nine in ten small firms have no experience of using a model akin to that which is now being proposed.

“We look forward to providing evidence and insight on the distinct needs of small employers to policymakers to ensure that our new immigration system protects access to the skills small firms need. It’s also important to ensure entrepreneurs from all over the world are able to set-up shop in the UK, create jobs and push our economy forward.   

“This government’s commitment to bolstering broadband investment is hugely welcome. As business owners, we can’t run before we can walk. We need the fundamentals – not least decent connectivity – in place before we can achieve our full potential.”

You can read more here;


HMRC cracks down on VAT fraud online

New powers to ensure online businesses pay the full-rate of VAT have come into force.

These new rules strengthen powers to make online marketplaces accountable for VAT fraud committed by online sellers on their platforms. These powers are known by the term joint-and-several liability (JSL) for online marketplaces. If sellers based in the UK or overseas are not paying the correct VAT when selling in the UK, and are not removed from the site following the issue of a notice by HMRC to the marketplace, then HMRC will pursue the marketplaces themselves for any future unpaid tax by those sellers. For any sales made from today onwards, the rules also make online marketplaces liable for VAT where they knew or should have known that an overseas online seller should have been VAT-registered but was not.

FSB Chairman Mike Cherry, said: “No business, in any part of the world, should be gaining an unfair advantage in the UK by dodging tax.


“The new rules introduced today promise to help level the playing field for small UK firms trading online. For too long, those who do the right thing have been allowed to lose out to firms that evade VAT. 

“Online marketplaces are vital to the success of thousands of small firms – often a natural complement to their high street shops. Like any good market organiser, these websites have a responsibility to ensure all traders are playing by the rules.

“Equally, they need to ensure that in complying with the new rules set out today they don’t place any unnecessary admin burdens on small firms.” 

Read more here:

Loan charge repayments deferred until September 2020

The government has agreed to defer loan charge repayment date to September 2020 in a move which will see 11,000 affected taxpayers removed from the tax clawback following the release of a review led by the former National Audit Office boss Sir Amyas Morse.

The Treasury has also decided to limit the loan charge cut-off date to 9 December 2010 instead of 1999 and will waive charges for those who disclosed loan scheme issues to HMRC, in instances where the tax authority failed to take action, for loan charges raised between 9 December 2010 and 5 April 2016.

To qualify, taxpayers would have had to fully disclose their schemes on their tax return over this period. If HMRC took no action, then their cases will be deemed to have been resolved.

The government signalled that it would take ‘new action’ against promoters who marketed the schemes prior to 2010, and said that details on the crackdown would be announced at the Budget in February.

Sir Amyas confirmed that the schemes were a form of tax avoidance but made a series of recommendations about the design of the charge and its impact on those in its scope.
The government accepted all but one of the recommendations in the review.


Following the review, the government said it would make changes so that the loan charge would now only apply to loans taken out on or after 9 December 2010. The review found that legislation announced in 2010 removed any doubt that tax was due.
Now users will be able to defer filing their returns and paying their loan charge liability until September 2020.

It will also allow taxpayers to split the loan balance over three tax years to make bills more affordable.

You can read more about the loan charge here;


Queen’s Speech confirms audit reforms and rise in NIC threshold

Plans to increase the threshold for national insurance, overhaul the audit regulator and hike research and development (R&D) tax relief and were confirmed in the Queen’s Speech

The major priority for government, set out in the Queen’s Speech, is the commitment to facilitate the UK’s departure from the European Union on 31 January and bring forward legislation to put this through.

It will also seek a 'future relationship with the European Union based on a free trade agreement that benefits the whole of the United Kingdom. They will also begin trade negotiations with other leading global economies'.

Key measures for business set out in the Queen’s Speech include ‘an increase in tax credits for R&D, establish a national skills fund and bring forward changes to business rates’. The national skills fund will receive an additional £3bn in funding over the course of the parliament to support education and training.

The plan is to increase R&D tax credits to 13% and review the R&D related costs which qualify for tax credits to include cloud computing and data in the qualifying criteria.

It is also introducing harsher sentences for the 'most egregious tax avoiders, doubling the maximum prison sentence to 14 years', which would require amended to the Criminal Finances Act.

Audit reform has been prioritised, with the government committing to 'develop proposals on company audit and corporate reporting, including a stronger regulator with all the powers necessary to reform the sector.

'These proposals aim to improve public trust in business, following the three independent reviews commissioned in 2018. It will also help workers employed by a large company in future to know how resilient it is'.

As set out in the manifesto, the government will review business rates and increase the retail discount from 33% to 50%, extending the discount to cinemas and music venues. It will also introduce an additional discount for pubs.

It will also bring forward the next business valuations review by one year to 2021 and move business rates' revaluation from a five-year to a three-year cycle.


New laws will also accelerate the delivery of gigabit capable broadband across the country.

You can read more here;

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