Weekly tax highlights ― 17 September 2020

Produced by Tolley
Weekly tax highlights ― 17 September 2020

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Weekly tax highlights ― 17 September 2020
  • Latest news
  • Treasury announces end of VAT retail export scheme
  • Actions needed from businesses to continue trading with the EU from 1 January 2021
  • United Kingdom Internal Market Bill: ‘unfettered access’ for NI goods
  • Temporary reduced rate of VAT for hospitality sector
  • Updates to coronavirus job retention scheme (CJRS)
  • Tax Tribunal practice statement on categorisation
  • Consultation response: HMRC’s civil information powers
  • Consultation response: tackling promoters of tax avoidance
  • More...

In the ever-fast-moving world of tax announcements and developments, this note pulls together some of the key changes announced this week. There is also a useful table summarising this week’s changes to HMRC’s manuals.

Our commentary will be updated in due course to reflect these latest developments.

Latest news

Treasury announces end of VAT retail export scheme

The Treasury has announced an end to the VAT retail export scheme and VAT-free sales of goods in airports with effect from the end of the Brexit implementation period. The VAT retail export scheme ― which broadly allows overseas visitors in British shops to claim VAT refunds on items taken home in luggage ― is set to end from 1 January 2021 according to a press release from the Treasury. The Treasury describes this as a ‘costly system’ but says that overseas visitors may still buy items VAT-free in stores and have these sent direct to their overseas addresses. This change is set to take place in England, Wales and Scotland.

In addition, the Treasury has suggested that it will be ending tax-free sales in airports of goods such as electronics and clothing for passengers travelling to non-EU countries.

Actions needed from businesses to continue trading with the EU from 1 January 2021

HMRC has sent letters to VAT-registered businesses in Great Britain (GB) that trade with the EU and / or the rest of the world, highlighting actions they need to take to continue trading with the EU from 1 January 2021.

The UK will leave the EU’s Single Market and Customs Union when the Brexit transition period ends on 31 December 2020. While the import processes and customs declarations for non-controlled goods can be delayed until 30 June 2021, the UK will operate a full external border with the EU when importing and exporting goods that are categorised as ‘controlled’ from the beginning of 2021.

In preparation for this, HMRC has sent letters to VAT-registered businesses explaining what they need to do to prepare

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