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Amazon Introduce New Buy-Now-Pay-Later Option
Any seasoned ecommerce seller will know the importance of payment options. In many cases, the payment options offered by a seller can be the difference between securing a sale or losing a customer. Amazon are obviously aware of this and have therefore teamed up with Barclays to offer their consumers a Buy-Now-Pay-Later payment option called ‘Instalments’. So let’s take a look at the new Buy-Now-Pay-Later option offered by Amazon and discuss how it could benefit you and your business.
Buy-Now-Pay-Later The Latest Craze In Ecommerce
The popularity of Buy-Now-Pay-Later (BNPL) payment options has sky-rocketed in recent times. The driving factor of this is the fact that these payment options allow consumers to get products quickly rather than having to save up beforehand. This also allows consumers to budget during busy shopping periods, such as the festive season. Many British consumers claimed that they would not have been able to afford all of their festive shopping without BNPL payment options.
Klarna has been the main service provider. The Swedish start-up is now one of the most popular payment options around the world, and its popularity is only growing. This form of payment option will continue to increase in popularity and has already proven to be extremely successful in Europe. For more information on these payment options you can check out our article on Buy-Now-Pay-Later payment options.
Amazon & Barclays New Buy-Now-Pay-Later Payment Option
As stated earlier, the new BNPL payment option from Amazon and Barclays is called ‘instalments’ and is now available to consumers in the UK. This option was previously available in Germany, and the popularity of the feature has convince Amazon to offer the option more widely. Whilst users will be able to use the option to pay for many third-party products on the site, they will not be able to use it for groceries or digital products.
Interestingly, the payment option will charge an annual interest of 10%. This interest will only apply over the payment period, but it is still a slight disappointment, since other providers of the service, such as Klarna, do not charge any interest. Amazon sellers will be able to use the service so long as they remain within their credit limit and monthly payment limit. Amazon will determine this limit by asking users for their income and employment status.
Be Careful Of Debt When Using Buy-Now-Pay-Later Services
As much as the requirement to submit personal income information may seem cumbersome, it is likely more sensible. It has been well documented at this point that there has been growing debt in consumers as a result of the BNPL payment options. It is thought that UK ecommerce consumers have already accumulated over 4 billion euros worth of debt from using the service.
Conclusion – We Specialise In Supporting Amazon Sellers
As usual, we would like to take this opportunity to remind you that our long history of working with Amazon and eBay sellers means we can offer you expert advice. As a trusted member of the Amazon Service Network, we can act as a third-party service provider for the Amazon VAT service.
As well as helping with your Fulfilment, we would be more than happy to help you register for the OSS and help you with all your VAT compliance needs in case your account faces any issues. So please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com for a quote today.
Ecommerce Businesses Prospered In 2021
2021 was an extremely strange year for small and medium sized ecommerce businesses. Whilst businesses undoubtedly faced many challenges with cyber fraud and marketing fatigue on the rise, not to mention the lingering effects of the pandemic, figures have shown that 92% online traders enjoyed a growth in sales in 2021. Indeed, over 20% saw a surge of more than 40%. Let’s take a look at why.
The Issues That Ecommerce Businesses Faced In 2021
Of course, the most obvious issues that ecommerce businesses have faced are as a result of the pandemic. Shipping delays are probably the biggest concern for most ecommerce providers at the moment, as ports across the globe still experience delays. This has a knock on affect for the entire supply chain as couriers struggle to keep up with increased demand. Obviously, Brexit will not have helped this situation.
However, the other issues faced by these businesses are perhaps a little less obvious. 35% of businesses are reportedly most concerned by cyber fraud. As more and more transactions are taking place online, there is obviously more scope for fraudsters to go unnoticed. In addition, many ecommerce business owners have expressed concerns that consumers may be getting inundated with marketing messages. This has caused concerns that some marketing channels, such as mailing lists, are becoming less effective.
The Positives That Ecommerce Businesses Enjoyed In 2021
Despite all the issues facing ecommerce businesses in 2021, the industry still was able to prosper. Almost a third of ecommerce businesses are thought to have experienced a 40% growth in sales, with up to 90% of online SMBs thought to have had an increase of 10%. Whilst there are still lingering effects of the pandemic, the increased stability in the financial position of many consumers over the last year has meant that consumers are feeling more confident to purchase again.
Furthermore, since 2020 the shrewdest of ecommerce business owners have invested heavily in their websites to ensure that they are able to deal with the increase demand. This spending seems to have grown, with surveys showing that 85% of online retailers invested more in their online technology in 2021 than they did in 2020. This, coupled with the reduction in random spikes of ecommerce, has meant that the industry has flourished.
What The Experts Say
“The past year has been an exciting and complicated time for eCommerce”, said Jimmy Kim, CEO of Sendlane in an interview with ‘ecommerce news EU’. “Certainly the pandemic has accelerated the shift to online shopping, but consumer buying habits were moving in this direction well before Covid, too.
What really stands out about our 2021 eCommerce Health study is that 53 percent of respondents believe the state of ecommerce is ‘strong,’ and 39 percent believe it is ‘very strong.’ This tells me that despite the concerns related to the economy, shipping issues, cyber fraud, etc., ecommerce retailers are in a great position to succeed in 2022.”
We Can Help You Expand Your Business
If you are a business who participates in cross border e-commerce, or importing of any kind, we would be more than happy to help you register for an EU and UK EORI number. We can also help you register for UK VAT, the UK VAT deferral scheme, 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 this post-Brexit period, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
It’s Time To Invest In Cross-Border Trade: Here’s Why
Even before the pandemic, ecommerce was on the rise. The dependence of consumers of non-physical shopping has obviously accelerated this trend, but what is not clear is why international cross-border trade has seemed to rise simultaneously. The most obvious reason would seem to be that desired items are not available in the residing country of the consumer. However, there are other factors, which is what our article today will be focusing on. If you are an ecommerce seller who is considering expanding your business into foreign markets, hopefully this article will help you with your decision.
What Is Cross-Border Trade?
Simply put, cross-border trade is when a purchase is made from abroad and then shipped over to the consumers’ residing country. This is obviously a complicated process which involves a number of logistical factors and, in many cases, different parties completing different tasks within the trade. For example, a consumer may buy a product via an online marketplace from a seller abroad, who then will employ the services of a logistics firm to deliver the purchased product.
There are many factors for an ecommerce seller to consider before participating in cross-border trade. For example, what are the tax implications of selling your products in another country? At what point do you have to pay customs duties? Whilst these questions can seem daunting, don’t forget that we are extremely experienced when it comes to supporting ecommerce sellers and can offer you expert advice. Get in touch with us today for a free consultation.
Why Is Cross-Border Trade Become So Popular?
So, to the crux of the matter. As stated in the introduction, one of the main reasons that cross-border trade is on the rise is the increased availability of options that are available to consumers. Since the improvements in supply chains and online marketplaces, it has never been easier to receive products and deliveries from abroad. However, there are other factors.
One such factor is the fact that products from abroad can usually be cheaper. This is surprising, when you consider how much logistical mileage is needed. Another factor is novelty. In many cases, consumers can want a variety of options, regardless of whether those options are better. This is especially true of decorative or luxury items. If you are an ecommerce seller, it is definitely worth doing some research into other countries to find out if there is anywhere else that would be specifically interested in your products.
We Can Help You Expand Your Business
If you are a business who participates in cross border e-commerce, or importing of any kind, we would be more than happy to help you register for an EU and UK EORI number. We can also help you register for UK VAT, the UK VAT deferral scheme, 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 this post-Brexit period, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
Plastic Packaging Tax Looming!
From April 2022, the UK government are introducing the Plastic Packaging Tax (PPT). The tax will affect many of us, as it will affect plastic manufacturers, anyone involved in supply chains, as well as consumers and sellers. The hope is that the tax will encourage the use of more recycled plastic in packaging. Assuming you are a business owner or fit one of the aforementioned categories, this article will give you all the information you need to prepare for the introduction of the Plastic Packaging Tax.
What Is The Plastic Packaging Tax?
The tax will apply to all plastic packaging in the UK that has either been manufactured or imported to Britain that does not contain at least 30% recycled plastic. If you are unsure as to what is classed as ‘plastic packaging’, this is any packing that is made up predominantly of plastic (by weight). Packaging imported to the UK will be liable for the tax, regardless of whether it is being used to transport products or not.
As stated in the introduction, this will apply to many different people. However, due to the disproportionate amount of administrative burden that will be inflicted, there will be exemptions for manufacturers and importers of less than 10 tonnes of plastic packaging each year. You can find the full legislative draft on the GOV website.
What Impact Will PPT Have?
Socially, it is hoped that the tax will encourage businesses to use more recycled plastic and will thus make many industries better for the environment. If the tax is successful, it is hoped that businesses will use less plastic packages and that consumers will choose products that use less plastic packaging (as it is assumed that products that use plastic packaging will be more expensive). This being said, the government is hoping that not too much of a burden is placed on consumers, since packaging is usually only responsible for a fraction of the overall price of a product.
It is expected, though, that the tax will affect around 20,000 manufacturers and importers. As well as one-off costs associated with familiarization of the new rules, businesses will also face the costs of filing and amending their VAT returns. There may also be costs associated with amending supply chains.
How To Register For PPT
A point of interest for businesses is that they will have to register for PPT if they handle plastic packaging, regardless of whether they meet the 30% recycled content threshold. This obviously means that businesses must be aware of their compliance obligations, and must prepare their business, way in advance of April 2022.
If your business would be liable, you will have to register in April 2022. In order to register, you will need to provide a lot of information, including your business type and address, and an estimate of how much plastic packaging you will be likely to use. Once registered, you will be issued a reference number and information that you receive from HMRC.
We Are Here To Help
Should you require any assistance with the Plastic Packaging Tax, don’t forget that our long history of working with ecommerce sellers, especially those who use Amazon and eBay, means we offer expert advice when it comes to your processes.
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 for our support with all your tax needs or logistic support. In addition to our logistic and ecommerce services, 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.
Businesses Very Concerned About Making Tax Digital
If you are a business owner, you will undoubtedly be aware of the Making Tax Digital (MTD) initiative that has been launched by the UK government. The aim of this scheme was to make all VAT reporting digitalized by the end of 2020. Of course, businesses were happy to hear that this deadline was extended due to the pandemic. However, the deadline is now looming once again as businesses with a turnover between £10,000 and £85,000 will have to be MTD compliant by April 2022. Despite the long notice, surveys are showing that there are still thousands of UK businesses who do not feel ready to implement MTD software in the new year. In light of these survey results, we thought now was a good time to revisit MTD so you can make sure you are prepared by April of next year.
What Do The Survey Results Tell Us About MTD?
Almost 300,000 UK SMEs have claimed that they are not ready for Making Tax Digital to be imposed on them in April 2022. The changes will require these businesses to implement a new software for collecting and reporting their taxable sales. Whilst bigger businesses have been required to this for some time now, April 2022 will see almost all UK businesses be required to implement the software. This will affect 1.1 million SMEs.
However, it is unclear whether small business owners will actually be more stressed by MTD. Whilst the implementation of the software will be stressful, as will the training of staff to use the software, the systems may actually help to reduce stress in the long run. Almost 60% of businesses surveyed agreed that digital tax reporting could reduce stress when filing tax returns. Indeed, the new systems will certainly make reporting VAT quicker and more efficient.
Does This Mean That MTD Will Actually Be Beneficial For SMEs?
Some experts certainly think so. MTD will mean that business owners will have to incorporate cloud-based services into their reporting systems. Whilst this could be slightly costly and complicated, industry experts are arguing that these systems can improve organizational health. These systems will certainly lead to quicker management information. This improvement in the speed in which business owners will be able to access their financial reports will hopefully mean that business can streamline their processes more efficiently. This may also mean that business owners will need to stress less about VAT reporting.
The only issue seems to be that business don’t feel prepared enough. There will undoubtedly be an integration period that may not be completely smooth, and these companies will have to train staff – which will be difficult if they themselves don’t feel completely confident about the new regulations. In addition to this, businesses have many questions, such as what software can they use, and what are the penalties for failure to comply? This information will have to be readily available before businesses can feel completely comfortable with MTD.
Are Any Businesses Likely To Be Exempt?
There are some very specific cases in which you could be exempt from MTD. These factors include your age or disability, your religious beliefs, or any other reason that implementing the software would be considered unreasonable or impractical, such as where your company is based.
However, you will need to apply to HMRC in order to gain an exemption. You cannot just presume that you are exempt. To do this, you will need your identification details (such as your VAT registration number) and you will also need to provide details on how you currently file your returns. More information on exemptions and the application process can be found on the gov website.
SMEs Need To Get Started With MTD By April 2022
It is recommended that you employ an accountancy service to ensure you are VAT compliant. With an accountancy firm, you can even still comply with the new MTD rules by sending your spreadsheets to them and let them handle the issues posed by making your tax digital, without the need to use the software.
That’s where we come in.
J&P is a registered accounting firm in the UK. We have the qualifications and strength to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about this policy, or if you need any help with submitting your VAT returns. You can contact us at enquiries@jpaccountant.com, on our social media, or give us a call on 0161 637 1080.
Hospitality Sector Fearful As Omicron Looms
As with the first surge in the coronavirus, it looks as though the hospitality sector maybe the industry with the most to lose this festive season. As fears over the Omicron variant rise, party-goers and those attending meals have flocked to cancel their Christmas party bookings. This has prompted the hospitality industry to plead for further support from the UK Government. In response, Rishi Sunak has scheduled crisis talks with business leaders. The question is – does the hospitality sector need more support?
Why Is There Such Concern For The Hospitality Industry?
Unless you have been living under a rock, you will no doubt have been following the mass fear that has come as a result of the proliferation of the Omicron variant. As people are worried about having to isolate over Christmas and New Year, the public are in the process of cancelling non-essential plans in the hopes of protecting their time with their families.
This is a massive blow for the hospitality sector, as naturally a lot of the plans that are being cancelled are those that would take place in establishments that fall under the umbrella of hospitality. The British Beer and Pub Association are estimating that pubs will sell 37 million less pints over Christmas than was originally expected. This would result in losses of up to £297 million.
Coronavirus Support That Is Currently Available To The Hospitality Sector
Whilst the Chancellor has expressed great concern and sympathy for the hospitality sector at this time, his initial stance has been to point to existing support, rather than immediately offering more. In fairness to him, there is already substantial support being given to the hospitality sector.
Currently, the hospitality sector are enjoying a VAT reduction of 12.5%, down from their usual 20%, which is currently scheduled to last until the Spring. In addition, the UK government have given local authorities £250 million in grants to be used to support local businesses. He has said that is primary concern is getting this money to struggling businesses as quickly as possible.
What Further Support Are The Hospitality Industry Asking For?
Despite the current support, industry leader in hospitality are still deeply concerned about the impact the virus may have on sales in December. They argue that they suffered greatly last year, considering that the festive season can represent over a quarter of all yearly takings for some establishments, and that they will not survive another barren Christmas period.
Thus, there are calls from those within the industry to keep the VAT rate of 12.5% for longer than just Spring, and some are even suggesting that VAT rates should be reduced further. Other suggestions have been the suspension of business rates for hospitality businesses for the first quarter of 2022, and the reinstatement of recovery grant.
Conclusion – The Pandemic Is Still Taking Its Toll On The Hospitality Sector
As you can see, there is still some way for the hospitality sector to go before it has completely recovered from the pandemic. Hopefully, the government will announce some further support in the coming weeks, or at the very least an extension to the current support.
Is your business struggling with the implications of the pandemic? Why not contact us so we can help?
At J&P, helping small businesses 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 and to keep you up to date with all the latest Government guidance and support, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail toenquiries@jpaccountant.com to receive help managing your business through the end of lockdown.
