News Hub
The New Tax Year: Corporation Tax & Minimum Wage
Changes To The National Minimum Wage In The New Tax Year
As usual, this tax year saw a rise in the national minimum/living wage. The rate has gone up from £8.72 to £8.91. Whilst this was expected, what is certainly noteworthy for employers is that the national living wage has been extended to include 23 and 24 year-olds. Thus, employers need to remember that the National Living wage now must be paid to anyone aged 23+. Of course, it is worth remembering that the hourly wage your employees are entitled to takes into account their age and their job title (if they are an apprentice, for example). For more, information, click here for a full break down of the National Minimum Wages for each age group. Also, please be aware there are no changes to the minimum amount you are required to pay into the auto-enrolment workplace pension for your employees. This rate remains at 8%.Corporation Tax In The New Tax Year
The changes to corporation tax have understandably been met with mixed reviews. On the one hand, it has been announced that corporation tax will remain at 19% for this new tax year and the next. However, from April 2023 this rate will be increased to a staggering 25%. This rate will not apply to all businesses. Alongside the tax hike in 2023, the UK government are also introducing a new small profits rate for smaller businesses. This will see companies who record profits of less that £50,000 keeping 19% corporations tax rate. Only businesses with profits over £250,000 will have to pay the full rate of 25%. Need help with corporation tax? Click here for more information about how we can help! As for businesses whose profits fall somewhere in between £50,000 and £250,000, there will be a new tiered system for corporation tax introduced. It is not yet clear how this will work, or how many tiers there will be. It is also not clear about what changes will befall Business Rates, since the UK government have still not given us their review.Capital Allowances In The New Tax Year
Capital allowances are actually one of the most interesting aspects of this new tax year. That’s due to the introduction of the new super-deduction capital allowance that will be available until March 2023. Essentially, the super deduction capital allowance means that the government will allow companies to claim back 130% of the costs of the amount they invest in qualifying machinery as first-year capital allowance. The UK government are clearly keen to encourage investment, so much so they are essentially paying for companies to do so. Remember though, this only applies to qualifying machines. You can find out more here.Conclusion
So as you can see, the changes to corporation tax and the national minimum wage will receive a mixed reception. Whilst none of the changes are major at the start of this new tax year, from reading between the lines it is clear that the government will certainly be looking for other ways to recoup the cost of the coronavirus in the coming tax years. Do you have any queries about paying your employees this tax year? Or perhaps you are struggling with corporation tax? At J&P, helping your business is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis, Brexit and the new tax year, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
The SME Brexit Support Fund: Apply Now!
Ecommerce business owners will be happy to hear that the HMRC have launched a new scheme to help SMEs with exporting to the EU. The scheme is called the ‘SME Brexit Support Fund’ and is offering applicants up to £2,000 worth of training and professional advice. After all the reports of delays and disruption following Brexit, ecommerce business owners and exporters should definitely apply for the scheme before applications close on June 30th 2021. Interested? Here’s all you need to know about the new SME Brexit Support Fund.
How Does The SME Brexit Support Fund Work?
The scheme has two variations. The first offers applicants £2,000 worth of training in exporting processes; such as completing customs declarations, using customs software, and understanding specific rules such as the ‘rules of origin’.
The second variation offers applicants £2,000 worth of advice so your business can meet its customs, excise, import VAT or safety and security declaration requirements. This is clearly a response to reports that most of the disruptions at ports has been due to paperwork being filled in incorrectly. It seems that the first option for the grant would be most beneficial to those who are just starting out exporting and the second might be more appropriate to a larger organisation who is mostly comfortable with the new requirements and just need to refine their processes.
This grant will come as welcomed news to many ecommerce business owners and exporters. It seems that the UK Government are recognising how difficult the Brexit transition has been on SMEs, especially in light of the lockdowns. If you have had your exporting operations affected, the SME Brexit Support Fund will definitely be of benefit to you.
How Can You Apply?
If you’re interested in the scheme, you must first check that you’re eligible. The HMRC have said they are encouraging Small and medium sized businesses that trade solely with the EU – and are therefore new to importing and exporting processes – to apply for the grants. They have also stated that your business must:
- be established in the UK
- have been established in the UK for at least 12 months before submitting the application, or currently hold Authorised Economic Operator status
- not have previously failed to meet its tax or customs obligations
- have no more than 500 employees
- have no more than £100 million turnover
- import or export goods between Great Britain and the EU, or moves goods between Great Britain and Northern Ireland
Remember, if your business fits the above criteria then you should apply as soon as possible as the deadline for applicants is the 30th June 2021.
To apply, simply click the link here and follow the directions. For other advice you can also use the Brexit Checker Tool in order to see if there are any other actions you need to be taking in the meantime.
Conclusion
We really recommend you make the most of this scheme. Brexit has been extremely hard on SMEs and tools like the SME Brexit Support fund can really help you get your business running smoothly again. For more advice on exporting after Brexit, check out our guide here.
If you are a business who participates in cross border e-commerce, or exporting of any kind, we would be more than happy to help you register for UK VAT, gain an EU and UK EORI number, file your UK and EU VAT returns, and help you comply with VAT in case your account faces any issues.
At J&P, helping your business is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through Brexit, so please do not hesitate to give us a call on n 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
VAT Registration In The US: The Sales Tax Nexus
Those of you who follow our social media will be aware of the increasing number of US states that are introducing tax obligations on remote or ‘foreign’ ecommerce sellers. Following a court ruling in 2018, states are now entitled to implement a tax nexus which allows them to require certain remote sellers to apply for VAT Registration when their sales surpass a sales threshold. However, it is not only the amount of sales that you make in a state that can determine whether you will be required to fill out a VAT Registration application, meaning It can sometimes be difficult to work out whether you have a nexus in a state or not.
Tax compliance in the US is certainly complicated, but ecommerce sellers should not be put off. The USA is still one of the best markets to expand into and, with our help at J&P, we can guide through the entire process. This article will look at the other factors that will determine whether you need to register for VAT in a state and, also, how to do it.
The Economic Nexus Test
Essentially, if you can be seen to have a ‘sales tax nexus’ in a state you will be required to register for tax in that state. In most cases this will be when your sales have exceeded the sales tax threshold in a state. The threshold itself changes from state to state, but a good rule of thumb is if your sales exceed $100,000 or you make 200 separate sales in a state, you probably have a nexus in that state. Since each state has different requirements it is imperative that you are always aware of where your consumer resides.
However, as mentioned earlier, it is not only the amount of sales that you make that can be used to determine whether you have a sales tax nexus in a state. Anything that could indicate that you have a significant presence in a state could require you to file for VAT Registration. Some examples are:
- Having a physical presence in state, such as an office or warehouse
- Employing people in that state such as employees or contractors
- Storing inventory in a state
Storing inventory in a state in particular is something ecommerce sellers would do well to remember since this includes inventory held in a Amazon FBA warehouse.
VAT Registration – What To Do If You Have A Nexus
Assuming your business operations meet one of these criteria, you will have to register for tax in that state. If you are unsure about whether you should be applying for VAT Registration in a state, get in contact with us today and we will be more than happy to help. Amazon sellers should also be aware that they can use Amazon’s FBA program to see which states have Amazon warehouses storing your inventory.
Once you’ve ascertained which state you will have a nexus in you will have to register for a sales tax permit, but not before obtaining an Individual Taxpayer Identification Number (ITIN). Again, if you need help get in touch with us via social media.
Also, please be aware that most states only accept payments from a US bank account, so you will need to open one. This may require you to have some form of business representative (or yourself) to be present when doing so.
Conclusion – How To Get VAT Registered In The USA
Hopefully this article will make you feel a little more confident when it comes to VAT registration in the USA. Whilst registering for VAT seems to be getting more difficult, ecommerce is booming, so there has never been a better time to get registered in as many countries as possible, and expanding your business!
If you are an ecommerce seller, we just want to let you know that we have the qualifications and knowledge to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about VAT Registration or selling on online marketplaces. You can contact us at enquiries@jpaccountant.com, or give us a call on 0161 637 1080.
The Suez Canal Blockage: Ecommerce Sellers In Deep Water
Ecommerce sellers around the globe would have celebrated the news that the ship that was blocking the Suez Canal, the Evergreen, was finally dislodged meaning that trade through the canal can resume. Whilst it is well known that the Suez Canal is one of the most important waterways in the world, it still may surprise most to learn that the blockage has been holding up over €8 billion worth of trade a day. This has obviously affected ecommerce sellers all over the world, including Amazon and Ebay sellers. This article will take an in-depth look at the repercussions from the blockage, as well as offering advice on what lessons ecommerce sellers should take from the blockage of the Suez Canal to ensure that it is plain sailing for their business from now on.
World Trade At Panic Stations
The Suez Canal sees about 12% of all global trade each year and is especially important when it comes to trade between Europe and China. As such, there was an incalculable amount of ecommerce goods being held up. Even now the stuck ship has been dislodged, it could still take a while to clear the traffic jam caused by the 360+ ships waiting to access the canal. In addition, many ships had to find alternative routes, which in some cases could cause delays of over two weeks and will cause major congestion at ports in the coming weeks.
There are other ramifications too. The closure of the canal has increased shipping costs (which had already been rising) as well as the loss of many perishable items. Furthermore, it is clear that the disruption will have greatly disrupted Amazon sellers and Ebay sellers from all over the world. On the Evergreen alone, UK shipping and freight forwarding company ‘Seaport Freight Services’ had 20 containers of goods stranded on the ship, which was mostly made up of Amazon orders.
What Can Ecommerce Sellers Take On Board?
In some ways, Brexit and the pandemic have been extremely educational for many vendors as they’ve been forced to become more inventive in their supply chain management. The problem for many sellers who trade between China and Europe is that there isn’t really another supply route for their goods to take as truck and rail aren’t really an option.
The first thing these sellers should be considering though is whether their supply chain is streamlined enough. Whilst it can sometimes be the cheapest option to use a variety of different logistics providers and to have a complex supply chain, world events such as this one should definitely convince sellers to have another look at their supply chain. You can find our article on 2021’s supply chain trends here.
Another thing worth considering is the division of inventories. In order to avoid problems at customs when attempting to import and export across the border, many UK sellers have already opted to split up their inventories between the UK and Europe. Events like the blockage of the Suez Canal remind us how valuable it can be for business owners to have segments of inventories in places where they will do the most business.
Finally, sellers who use online marketplaces to facilitate trades should see the strong appeal of using the marketplaces delivery services. Services such Fulfilment by Amazon and Ebay’s Global Shipping protections give you a strong layer of protection against external disruptions and ensure you are not left at sea when something goes wrong with your deliveries.
Conclusion – Be Innovative With Your Supply Chain
Whilst the Suez Canal blockage has obviously been a disaster for trade in general, hopefully this article has given you some ideas for how you can ensure you are as prepared as possible for any future disasters.
We at J&P understand that when it comes to your business, you want to run a tight ship.
As well as VAT services, at J&P we can offer our warehouse services to ecommerce sellers in the UK and EU. If you are an ecommerce seller, we just want to let you know that we have the qualifications and knowledge to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about logistics and supply chain management or selling on online marketplaces. You can contact us at enquiries@jpaccountant.com, on our social media, or give us a call on 0161 637 1080.
The How-To Guide Of VAT Registration In Saudi Arabia
With its booming ecommerce industry and the youngest internet-connected population in the world, it’s no surprise that Saudi Arabia is one of the most popular destinations for ecommerce sellers to expand their business. However, due to the need to appoint a fiscal representative many UK sellers find it very difficult to register for VAT in the KSA. Fortunately, we at J&P Accountants have our own representative in Saudi Arabia, and thus you can register for your VAT there with us! Want to know more? Read on.
The Situation Of VAT In Saudi Arabia
The KSA introduced VAT relatively recently in January 2018. The hope was that this form of income would lessen their economy’s dependence on oil and would diversify their streams of revenue. Originally, the rate of VAT was 5%. However, this has risen to 15% in response to the Coronavirus pandemic.
This shouldn’t put you off considering VAT Registration in Saudi Arabia though, as the government have expressed multiple times that the rate of VAT is not fixed. It has been confirmd that the hike will be reviewed once the pandemic is over. Whilst it may not go down to 5% immediately, it will almost certainly fall from 15%.
When You Need To Register For VAT In Saudi Arabia
If you’re a business who is registered in Saudi Arabia, you only need to register for VAT if your taxable sales exceed 375,000 SAR (£72,500). Some businesses opt to do so voluntarily in order to avoid input tax when their sales exceed 187, 000 SAR, but this is not necessary.
However, if you are a business from anywhere else you will need to register for VAT to make any sales in the KSA. This means if you are a UK or EU seller who wishes to expand their business to Saudi Arabia, you will have to register for VAT.
How The VAT Registration Process Works In Saudi Arabia
As stated earlier, usually you must appoint a fiscal representative before applying for VAT registration in Saudi Arabia. Whilst this is notoriously difficult, it is not an issue when you apply through us. At J&P, we already have an appointed representative in the UAE. This means we are able to file your tax returns and correspond with the GAZT (the KSA tax authority) on your behalf, as well as getting you registered.
We will be able to handle the entire registration process for you after we receive the relevant information from you. This includes:
- Physical address of regular abode or place of business
- Existing electronic identification number issued by the GAZT (if any)
- Commercial Registration (CR) number
- Value of annual supplies or annual expenses
Upon receiving acceptance and confirmation of your application, you will be free to expand your business in to Saudi Arabia!
Conclusion
So as you can see, whilst the process of registering for VAT in Saudi Arabia can be difficult, through employing our services the process is made much simpler, and you can expand your business into one of the fast growing ecommerce economies in the world.
Our long history of working with ecommerce sellers, especially those who use Amazon and eBay, means we can guide you through every step of the registration process. Furthermore, your expansion does not only have to be limited to the Middle-East, as we would be more than happy to help you register for UK & EU VAT and file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues. So please do not hesitate to send us an e-mail at enquiries@jpaccountant.com or contact us through social media to receive a quote today.
How-To Guide For German VAT Registration
As all of you ecommerce sellers will know, Brexit has made fulfilling orders between the UK and the EU extremely difficult. Even Amazon sellers have not escaped the negative implications of increased border control, as Amazon have stopped pan-EU fulfilment for deliveries between the UK and the EU, forcing many sellers to split their inventories. Perhaps the most notable new obligation that has been placed on sellers is the requirement to register for VAT in EU countries where they make sales and, considering that Germany has the second biggest ecommerce economy in Europe after the UK, it is perhaps no surprise that this is the country most UK sellers are attempting to register for. If you find yourself in this particular situation, there is bad news and good news; the bad news is that German VAT registration is notoriously difficult and has more requirements for ecommerce sellers than most other EU countries. However, the good news is that we at J&P are here to help. This article will give you all the information you need to expand your business into Germany.
Firstly, Why Register For VAT In Germany?
Since Brexit, Germany certainly seems to be the most popular destination for UK sellers to register for VAT in Europe and it’s easy to see why. As previously mentioned, Germany currently has the second biggest ecommerce economy in Europe, estimated to be worth roughly €80 billion – a figure which is expected to rise to around €140 billion by 2024.
Another benefit is Germany’s central location. If you wanted to expand your business in the future to other European countries, Germany is very conveniently located in the heart of Europe so the distribution of your products would be made easier.
When And How You Will Need To Register For German VAT
If you are a seller based in the EU you’re in luck as you will only have to register for German VAT if your sales exceed the distance selling threshold of €100,000. However, if you are a seller from the UK or anywhere else outside of the EU, you will have to register for German VAT if you want to make any sales to consumers located in Germany or if you want to hold stock in the country. For you Amazon sellers, please note this also includes holding stock in an FBA warehouse.
It is vital to employ the help of experienced tax experts when applying for German VAT Registration, such as ourselves here at J&P, as the registration process is renowned for being scrupulous. In terms of the application itself, you will need to submit an application to the German tax authorities along with the relevant company documentation (founding certificates of the company, planned business activities in Germany etc).
Furthermore, the application and your documentation, as well as all correspondence with the German tax authorities, must be conducted in the German language. Applications are often returned for mistakes. Whilst you will need a tax agent for the registration, you do not need to appoint a tax representative in Germany (for clarification on the difference between the two, please see our article on the topic here).
The Additional Requirement For Amazon Sellers – F22 Certificate
If you use a facilitating online marketplace to make sales in Germany, such as Amazon, you will have to acquire a F22 certificate. This certificate essentially just confirms that you are VAT registered, and you will have to show it to the online marketplace that is facilitating your sales.
This is a tax obligation that sellers can sometimes overlook, but it is vital you acquire one before selling in Germany as you will likely face penalties if you do not have one. Luckily, when you enlist J&P’s help you with German VAT registration, we will automatically include the acquisition of this certificate for you in our service, free of charge.
Conclusion
Evidently, VAT registration is an unavoidable step when it comes to expanding your business. Whilst it can be a stressful registration process, we are here to complete the process for you.
Our long history of working with ecommerce sellers, especially those who use Amazon and eBay, means we can guide you through every step of the registration process – so please do not hesitate to send us an e-mail at enquiries@jpaccountant.com or contact us through social media to receive a quote today. In addition, we would be more than happy to help you register for UK & EU VAT and file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues.
