As you will know by now, we at J&P specialise in helping Amazon sellers expand their business and keeping them up to date with all the latest changes to Amazon’s service. Since we’ve already covered many of the changes to Amazon’s VAT obligations (which you can find here) it seems only right to update you on some of the other changes that are coming into effect in the coming months. If you are an Amazon seller, you’ll want to make sure you are aware of these changes and that you prepare accordingly.
VAT Obligations Changes
Whilst we have already covered these in previous articles, it still seems prudent to go over them again briefly as understanding the new rules will be vital for you to maximise your profit in 2021 and beyond.
The main things to remember are that Amazon are only responsible for accounting for VAT on B2C sales, not B2B sales. Whilst this seems redundant, since most sales you’ll be making are B2C by nature, it is still worth noting to make sure you do not accidentally neglect to pay VAT on your sales.
Secondly, their responsibilities only extend to sales that have a value of up to £135 when the goods are being acquired from overseas. This includes sales below £15, since the Low-Consignment Relief was abolished at the beginning of this year. This is because up until this value goods are not liable for import VAT, just sales VAT. If you want more information on this topic, click here.
Changes To Fulfilment
As you will already be aware, Amazon have stopped offering cross border fulfilment for cross border sales to and from the UK and EU. However, these are not the only changes you need to be aware of. Firstly, it will come as welcomed news to many of you to hear that Amazon are offering fulfilment for ‘big and bulky’ products from April 1st. This means amazon are going to be even more accommodating to sellers who sell larger items such as home appliances and furniture.
In addition to the Heavy and Bulky FBA program storing and shipping massive products on behalf of sellers, the program also provides greater delivery options for customers. Customers who have or do not have a Prime membership can select from Scheduled and Room of Choice delivery options, depending on their region.
Please be aware though that Amazon will charge you a minimum referral fee of £15 on top of usual FBA-related fees for each item sold. Also, the maximum weight/size of items will vary from country to country.
This is not the only change to fulfilment fees. Amazon have announced new seller fulfilment fees that will take effect on June 1, 2021. However, they have been quick to point out that they are making only modest increases (about 2-3% on average) to fulfilment fees, in order to bring them in line with or below industry averages.
They have also pledged to reduce certain fees, like the returns processing fee, which reflects feedback they have received from sellers and their continued efforts to reduce costs.
If you follow the Amazon notice board then you will know that changes to the returns policy have caused a lot of confusion over the last few days. They have now clarified the new changes by informing us that from April 15, 2021, they will offer your customers returnless and free replacements as an option for eligible items as part of their Prepaid Return Label program . This change will provide you additional return resolutions and offer customers the option to receive a replacement item at no extra cost.
Whilst on the surface this might seem worrying on the surface, it should ease your concerns to know that this only applies to self-fulfilled orders and you have to opt-in for this scheme. This should limit the amount of refunds you have to give out. Further, even if you have opted in to the scheme, you can still cancel the order should the buyer attempt to get a replacement item that you are not happy with.
All Seems Positive
All in all, these changes all seem to be positive for Amazon sellers; just ensure you understand all the changes fully and prepare your inventory and prices in any way you deem fit.
Don’t forget our long history of working with Amazon and eBay sellers means we can offer you expert advice, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to email@example.com. We would be more than happy to help you register for UK & EU VAT, the UK VAT deferral scheme, EU and UK EORI number, file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues.
The UK currently feels as though it’s in a state of optimism with the roll out of vaccines promising light at the end of the tunnel in our fight against the coronavirus pandemic. However, just beneath the surface there is a definite sense of unease concerning the state of the UK’s economy and the major disruption cross border trade is currently suffering. The news that came out today will do nothing to ease these concerns, with the ONS reporting that UK exports to the EU dropped 40% in January and imports have also fell dramatically. Let’s take a look at the precarious position the UK is finding itself in and what the government intends to do about it.
What’s Going On In The Background
It is no surprise that the two main contributing factors to the UK’s economic downturn are the Coronavirus pandemic and Brexit.
Due to the pandemic the UK was forced into its third lockdown in January. This understandably halted any progress that was being made in terms of economic recovery, as is evidenced by the fact that the UK economy shrank 2.9% in January. This now means that the economy is now almost 10% smaller than it was before the start of the pandemic.
Brexit has not helped the situation. There have been countless reports of severe delays and small errors in paperwork resulting in missed delivery times and perishables being wasted. Mostly, this is due to the sheer amount of red tape importers and exporters are having to deal with and the lack of clarity surrounding what regulations traders must follow.
This is not to mention the problems with Northern Ireland. Many food supplies and online shopping deliveries from Great Britain to Northern Ireland have been subject to delays, which has caused supermarkets being severely under-stocked and some of the food perishing. The staff carrying out inspections at the border have reported threats from aggrieved lorry drivers and extremely high tension.
What Are The Government Doing In Response?
Yesterday’s news regarding the extension of the existing post-Brexit import customs declarations deferment from 1 July 2021 until 1 January 2022 will offer some relief to importers. Whilst customs import declarations will still be required, but the option to use the deferred declaration scheme, including submitting supplementary declarations up to six months after the goods have been imported, has been extended to 1 January 2022.
Even this though is problematic since the EU are not extending the same help to UK exporters. Indeed, they have been requiring complete customs declaration forms from January. Therefore, whilst this is helping with the importation of goods to UK, which will help keep stock levels high during the pandemic, UK exporters would be well within their rights to complain that this is giving an unfair advantage to European competitors as the EU essentially have a post-Brexit transitional period extension.
This is comically ironic, when one considers that the whole point of Brexit was supposedly to give an advantage to British firms. Manufacturing also fell in January for the first time since April, once again showing the lack of positive effects Brexit has had so far on the UK’s production.
As for Northern Ireland, the UK did extend the grace period, which meant that procedures and checks are not fully applied in order to allow a freer movement of goods into Northern Ireland. Again, whilst this seems a good thing on the surface, the EU are viewing this as a breach of international Law and are threatening legal action.
Clearly, the UK is in a serious state of flux at the moment. You would not be alone if you are worried about your business, especially if you export regularly from the UK. You should let us help you.
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, the UK VAT deferral scheme, 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 0161 637 1080 or send an e-mail to firstname.lastname@example.org.
This blog has covered the Self-Employed Income Support Scheme and the Job Retention Scheme in great detail (you can find the articles for those schemes here and here), but we haven’t covered the Coronavirus Business Interruption Loan Scheme or the Bounce Back Loan Scheme. Both schemes could be incredibly useful to your business in this time of difficulty. If you are unsure about which one to choose don’t worry, you’ve come to the right place. This article will outline both schemes and will show you which one would be more useful for your business.
The Coronavirus Business Interruption Loan Scheme (CBILS)
As part of the Government’s business support, the CBILS is intended to provide financial support to SME’s who have been affected by the pandemic. Essentially, the scheme lets you lend up to £5 million from a lender for up to 6 years and the Government will act as your guarantor – only for 80% of what you borrow. The Government will also pay for any interest or fees incurred on loan for the first 12 months.
You are entitled to apply for the scheme if you are a UK-based business and your turnover does not exceed £45 million. You must also be able to prove that you were not ‘a business in difficulty’ before the pandemic and also that your business would be viable were it not for the pandemic. It is worth bearing in mind that you cannot apply if you are a bank/insurer or in the public sector (this includes schools).
To apply you just have to go to any approved lender (in most cases this will be a main retail bank) and apply through them. They may require you to show evidence of cash flow forecast and historic accounts etc. since this they must decide whether the loan is suitable for you and that you will be able to pay it back.
Please bear in mind, despite the Government acting as a guarantor for a the majority of the loan,. It is still your responsibility to pay back 100% of what you borrow.
If you applied for the scheme previously and were unsuccessful, it is definitely worth checking again. This is because access to the scheme has been opened up to those smaller businesses that would have previously met the requirements for a commercial facility but would not have been eligible for CBILS.
Insufficient security is no longer a condition to access the scheme.
This significantly increases the number of businesses eligible for the scheme.
The Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme has been introduced to help businesses where the Business Interruption Loan Scheme would not grant them finances fast enough. This scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is 10x smaller that the CBILS, standing at £50,000.
However, unlike the CBILS, the government guarantees 100% of the Bounce Back Loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
Just like the other scheme, you are eligible to apply for the scheme if you are a UK-based business and have been adversely affected by the pandemic. The same exempted sectors apply. However, you are able to apply for this scheme even if you were declared a business in difficulty before December 2019, but you will need to provide evidence that you complying to state aid restrictions.
The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months.
Before your first repayment is due, your lender will contact you about further options to:
- extend the term of your loan to 10 years
- move to interest-only repayments for a period of 6 months (you can use this option up to 3 times)
- pause your repayments for a period.
Please bear in mind that you cannot apply to this loan if you are already receiving aid from the CBILS, but you can transfer up to £50,000 of that loan into the Bounce Back Loan Scheme.
Just like with the Coronavirus Business Interruption Loan Scheme, you will have to approach a lender yourself; again, in most cases this will be a main retail bank.
Get Applications In Quick!
As you can see, both these loans could be extremely useful for you and your business. After choosing which one best suits you, make sure to apply quickly as applications will not accepted after 31st March 2021.
Need help deciding which one is best for you? 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, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to email@example.com.
As you will undoubtedly know, this week saw the announcement of the 2021 Spring Budget. Whilst the measures introduced were not quite as drastic as we were all expecting, there was still a lot to unpack in the Chancellor’s announcement, especially with regards to small businesses. This article will try to explain the most important changes from the Budget, but please do not hesitate to get in contact via our social media should you have any questions about any of the policies outlined in the Budget. Without further ado, here’s all you need to know about the implications to your business from the 2021 Spring Budget.
SEISS, The Job Retention Scheme & Other Schemes
It will come as a relief to many employers to find out that the Job Retention Scheme has been extended to September. This means the Government will continue to pay 80% of the wages of your furloughed employees. However, they will not cover the complete costs of this 80% from July.
In July, the government are requiring businesses to cover 10% of these costs, rising to 20% in August and September as the economy reopens. For an employee to be eligible to receive the grant they must have been registered as an employee before the 3rd of March.
As an employer, you have until the end of March to apply for this scheme. This deadline also applies to various other schemes such as the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme. Applications for this scheme were originally meant to close in January but have been extended to the end of March.
At the Budget it was also confirmed that the fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.
The UK government has also announced that there will be a fifth and final grant covering May to September. You will be able to claim from late July if you are eligible for the fifth grant. The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.
The fifth grant will be worth:
- 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
- 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%.
As many of you will have anticipated, there was a hike in corporation tax. However, this will not come into effect until 2023. The rate of Corporation Tax paid on company profits will increase to 25 per cent – but with some crucial protections:
- the new rate won’t be introduced until April 2023
- small businesses with profits of £50,000 or less will continue to pay the current 19 per cent rate
- the rate will then be tapered up, depending on business profits – only businesses with profits of more than £250,000 will pay 25 per cent
The Chancellor says that this means only 10 per cent of all companies will pay the 25 per cent rate.
There was some good news for those of you who have had businesses with property to offset this increase though; This has come in the form of Restart Grants, which are thought to be worth around £5bn
The Restart Grant scheme, administered by local councils, will help almost 700,000 small business owners including those running shops, pubs, clubs, hotels restaurants, gyms and hair salons.
Non-essential retail businesses will get up to £6,000 per premises through the Restart Grant scheme to help them reopen. Shops will reopen no earlier than April 12, according to the Government’s Covid-19 roadmap. If you own a business that operates on a given property and you have been heavily affected by the pandemic, you should be eligible to apply.
Other Points Of Interest
The reduced VAT rate for hospitality is also set to continue. This means VAT for the hospitality sector will be set at 5% until September. After that, VAT will be set at 12.5% for these companies until March 2022, when it will return to its normal rate.
As we have pointed out in previous articles, these companies are also due to pay back any VAT they postponed between March and June last year by the end of this month. The budget reaffirmed this deadline, but also let those affected know that they will be able to pay their owed VAT back in instalments over 11 months. Find out more about this in this previous article.
There was also the announcement of 8 new ‘Free Ports’. Businesses located within the freeports will benefit from tax breaks including no stamp duty, full rebates for construction and machinery investment, five years of zero business rates, and lower tariffs and customs obligations.
Most of the zones will be based around England’s biggest coastal cargo ports, including Felixstowe, Liverpool, Hull, Southampton and London Gateway. Plymouth, Teesside and a zone around East Midlands airport will also be designated areas.
The main theme of this budget seems to have been support for businesses in the last round in the battle against the coronavirus. Whilst this is obviously good news, it is likely we will see more tax hikes in the next budget announcement, so take advantage of these government schemes while you can!
As mentioned at the beginning of the article, please feel free to get in contact with us if you have any questions about any of these schemes, or how to apply to them. 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, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to firstname.lastname@example.org.
By now you’ve surely been inundated with news about today’s budget announcement. Indeed, the extension to the furlough scheme and the pledge to increase support for the self-employed will have been welcomed news to many of you. Keep an eye on our social media for Friday’s article when we will be providing your with an in-depth analysis of the budget announcement and what it will mean for your business. In the meantime though, it seems prudent to focus on an aspect of the announcement that is seemingly going under the radar; this is in reference to the new Help To Grow Scheme announced by Rishi Sunak. The Government are investing heavily in this scheme which will give small business owners an education in digitalising their business. Read on to find out why you should be signing up to this latest scheme.
So, What Is The Scheme?
The new ambitious £520 million ‘Help to Grow’ initiative is designed to help small and medium-sized enterprises (SMEs) recover and build back better from the COVID-19 pandemic. How? By adopting digital technology and management training to increase innovation, productivity, and future growth.
The initiative contains two schemes:
Help to Grow: Digital – this scheme will provide SMEs with discounted software and expert advice on how to best utilise it.
Help to Grow: Management – this scheme will offer MBA-style management training to SMEs with the aim of increasing innovation and boosting growth.
The digital aspect of the scheme will provide access to a portal that will offer businesses advice on tech and discounts on certain digital equipment. The management aspect will offer school-style teaching from experienced and qualified teachers which will amount to roughly 50 hours worth of tuition. The aim is to increase productivity and growth.
The past 12 months have shown us just how important this training could be. During the pandemic, companies able to take advantage of the latest digital technologies to adapt to social distancing restrictions were not just able to survive, but to thrive, growing up to eight times faster than those who did not use digital tools.
How To Apply
Anyone can benefit from the online advice that was mentioned in the digital aspect of the Help to Grow scheme. In order to make the use of the vouchers, it is thought that you will have to fit a certain criteria; namely, you must be a UK business that: employs between 5 and 249 employees and are registered at Companies House. Also, you must have been trading for more than 12 months and must be purchasing the discounted software for the first time.
To apply, just follow this link. By doing so, you can use your Companies House registration number to register your interest in the scheme and they will be in contact with you in due course.
Before signing up though, please be aware that the government will only be subsidising 90% of the course. You or your company will have to pay £750 in order to take par. However, this will not be due until you are confirmed to be on the course. You will pay nothing for registering your interest on the government website.
Should you have any questions about the scheme or anything else in the budget announcement, please contact us via our website or social media.
You can contact us at email@example.com, on our social media, or give us a call on 0161 637 1080.
It’s that time of the year again; Rishi Sunak will be announcing the financial statement for the tax year to the House of Commons on Wednesday 3rd March. This will be the first budget announcement for almost an entire year as the government felt it was unseemly to release one in the Autumn. Unsurprisingly, this is shaping up to one of the most highly anticipated budgets of all time, as the focus will undoubtedly be on narrowing the deficit and how to support businesses throughout the end of the pandemic. So what can we expect to see? Read on to find out.
Continuation Of Coronavirus Support
In total, more than £280 billion has been spent so far on responding to the Coronavirus. This has been given to companies in various forms in order to make up for the loss of profits, and one of the main sources of spending has been the furlough scheme. So far, it is estimated that the furlough scheme has costed the government over £53 billion and has supported rough 11.7 billion people. The scheme is due to end in April but following the Prime Minister’s announcement that restrictions will be remaining in place until June, it is very likely we will see this scheme be extended again.
It is also likely that there will be increased support for the self-employed announced in March’s budget. The self-employment income support scheme (SEISS) gives grants to help those who work for themselves if their income has been negatively impacted by Covid. Strangely, the announcement detailing who will be eligible for the grant will be announced on March 3rd’s budget, even though the period is set to cover the months February, March and April.
Narrowing Of The Deficit
Whilst the continuation of Coronavirus support will come as a great relief to many, there is no doubt that this amount of borrowing from the government cannot go on forever. Especially with Chancellor Sunak describing the responsibility of balancing the books as his ‘sacred duty’, we will likely see some tax hikes announced in next Wednesday’s budget.
One such tax that could see a rise is Corporation tax. It has been speculated that Corporation tax could rocket from 19pc – one of the lowest levels among OECD countries – to 25pc, according to reports ahead of the Budget. That would be more in line with other G7 countries, with President Joe Biden expected to raise it from 21pc to 28pc in the US. Businesses are already bracing for a rise and you would be wise to do so too.
It will be interesting to see how this affects the hospitality sector which has been afforded VAT and business rates relief up until now. Mr Sunak also announced £4.6bn of one-off grants in January to stave off winter collapses during the third lockdown. The grants – worth up to £9,000 – were targeted at the retail, hospitality and leisure sectors, though it is not clear if more funds will be made available as restrictions continue.
Ministers are facing calls to extend these support measures to the end of 2021, with Boris Johnson’s gradual reopening roadmap meaning businesses will be operating under social distancing restrictions until at least late June. However, this will not go down well with other industries who have been affected by the pandemic.
Whilst this is certainly a time of great apprehension and uncertainty, don’t fret. At J&P, we can offer invaluable VAT advice to businesses across the UK and EU. If you are an ecommerce seller or a small business owner, 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 any of the issues raised in this article. You can contact us at firstname.lastname@example.org, on our social media, or give us a call on 0161 637 1080.