Customs declarations from 1 January 2021

The Brexit transitional period comes to an end on 31 December 2020. From January 2021, new arrangements apply if you send goods abroad from the UK or bring goods into the UK. It is important that you check what customs declarations you need to make from 1 January 2021 onwards.

Where goods are moved through Great Britain and Northern Ireland, Common Transit may affect the declarations that you need to make.

Sending goods from the UK

The first point to note is that the customs declarations that are required will depend on whether the goods are sent from Great Britain or from Northern Ireland – the rules are not UK-wide.

Sending goods from Great Britain

If you are sending goods from Great Britain to another country, the declarations that are needed will depend on the country to which the goods are being sent.

If you are sending goods from Great Britain to Northern Ireland, you will not need to make a declaration when you send the goods. However, you may need to make a declaration when the goods arrive in Northern Ireland. If you move goods between Great Britain and Northern Ireland, you can make use of the Trader Support Service.

From 1 January 2021, if you are sending goods from Great Britain to a country in the EU, before the goods leave Great Britain, a declaration will be needed and also an exit summary (safety and security) declaration if this is not already included in your declaration.

The procedure for sending goods from Great Britain to a country outside the EU (other than Northern Ireland) is unchanged from 1 January 2021 – a declaration is needed before the goods leave Great Britain, and also an exit summary if this is not included in the declaration.

From 1 January 2021, the procedures are the same where goods are sent from Great Britain to a country other than Northern Ireland.

Sending goods from Northern Ireland

In most cases, you will not need to make a customs declaration when sending goods from Northern Ireland to Great Britain. However, the Government are yet to publish guidance on when declarations may be needed for certain goods.

Unlike goods sent from Great Britain, you will not need to make a customs declaration from 1 January 2021 if you send goods from Northern Ireland to a country in the EU.

However, as now, if you send goods outside the EU from Northern Ireland, you will need to make a customs declaration and you will also need an exit summary if this is not included in your declaration.

Bringing goods into the UK

If you are a UK-based business and you bring goods into the UK, the customs declarations that you need to make from 1 January 2021 onwards will depend on where the goods have come from and whether you are bringing them into Great Britain or Northern Ireland.

Bringing goods into Great Britain

You will not need a customs declaration for most goods that you bring into Great Britain from Northern Ireland. Guidance on the declarations needed for certain goods is yet to be published.

From 1 January 2021, the customs declarations that are needed if you bring goods into Great Britain from an EU country will depend on whether the goods are controlled goods or not. If they are, you must make a customs declaration when the goods arrive. If the goods are not controlled goods, you may be able to delay making declarations and instead record the goods in your own records and tell HMRC about them up to six months later. Guidance on whether you can take advantage of these procedures can be found on the Gov.uk website. This may be an option if you are moving goods from the EU into free circulation in Great Britain between 1 January and 30 June 2021.

A customs declaration and an entry summary are needed for goods brought into Great Britain from outside the EU or Northern Ireland.

Bringing goods into Northern Ireland

From 1 January 2021, you will need to make a customs declaration when goods arrive into Northern Ireland from Great Britain. An entry summary is also required.

However, you will not need a declaration for any goods that you bring into Northern Ireland from the EU. If you bring goods into Northern Ireland from outside the EU, other than from Great Britain, as now, you will need a customs declaration and entry summary.

Talk to us

Making customs declarations can be complicated and you may want to appoint someone to handle this on your behalf. Talk to us to find out how we can help.

File your tax return by 30 December 2020

Although the deadline by which your 2019/20 self-assessment tax return must be filed online is 31 January 2021, an earlier deadline of 30 December 2020 applies if you want any tax that you owe for 2019/20 to be collected through PAYE. This can be advantageous as you can spread the cost across the tax year, rather than paying it in a single instalment.

Conditions

You can pay your self-assessment bill through PAYE if all of the following apply:

• the amount that you owe is £3,000 or less;
• you already pay tax through PAYE (for example, because you are an employee or you receive a company pension); and
• you either submitted a paper tax return for 2019/20 by 31 October 2020 or filed your return online by 30 December 2020.

You should note that if you meet all of these conditions, HMRC will collect any tax that you owe through the PAYE system. If you file your self-assessment return by 30 December 2020 and owe less than £3,000 and do not want to pay it in this way, you will need let HMRC know. You can do this on your tax return. If you choose this route, you will need to pay the tax you owe for 2019/20 by 31 January 2021 (unless you have agreed a Time to Pay arrangement with HMRC).

You will not be able to pay any tax that you owe via PAYE if:

• you do not have sufficient PAYE income to cover the tax that you owe;
• collecting tax in this way would mean that you would pay more than 50% of your PAYE income in tax; or
• if you would end up paying twice as much tax as you would do otherwise.

Collection through your tax code

Your tax code will be adjusted to facilitate the collection of the tax that you owe through the PAYE system. The adjustment will reflect the amount that you owe and the rate at which you pay tax.

Underpayments for 2019/20 will be collected by adjusting the 2021/22 tax code. Adjusting the tax code will have the effect of collecting the underpaid tax in 12 equal instalments over the 2021/22 tax year. Interest is not charged, meaning this is an interest-free way of paying any tax that you owe in instalments.

Speak to us

If you have a tax underpayment of £3,000 or less and would like it to be collected via an adjustment to your 2021/22 tax code, please let us know so that we can ensure that your 2019/20 tax return is filed by the 30 December 2020 deadline.

SEISS grant increased

The Self-Employment Income Support Scheme (SEIS) will now run until 30 April 2021, providing two further grants – one for the three months from 1 November 2020 to 31 January 2021 and one for the three months from 1 February 2021 to 30 April 2021. Since the extension to the scheme was originally announced, the amount of the first of these grants has been increased several times. The amount of the final grant has yet to be set.

Amount of the third grant

The third grant payable under the SEISS will now be set at 80% of three months’ average trading profits, capped at £7,500.

As for the first two grants, the amount of the third grant is calculated by reference to average profits over the 2016/17, 2017/18 and 2018/19 tax years, with the calculation modified if you did not trade in all three of these years.

Claiming the grant

The qualifying conditions for the scheme remain the same. You can claim the third grant if you are currently actively trading but demand has fallen as a result of Coronavirus, or if you were trading previously, but are unable to do so as a result of Coronavirus. You do not need to have made a previous claim.

You can claim the third grant from 30 November 2020.

How we can help

Although we cannot make the claim on your behalf, we can help you work out whether you are eligible for the third grant and the amount to which you are entitled. Get in touch to find out more.

CJRS extended until March 2021

The Coronavirus Job Retention Scheme (CJRS) was due to come to an end on 31 October 2020, being replaced from 1 November 2020 with a new scheme – the Job Support Scheme. However, the second national lockdown in England changed all that. The CJRS has been reprieved and will now continue to run until 31 March 2021, while the Job Support Scheme has been put on hold.

Eligibility under the extended scheme

You will be able to claim a grant for eligible employees who are fully or flexibly furloughed under the extended scheme if you had a UK PAYE scheme on 30 October 2020 and have a UK bank account. You do not need to have made a claim previously to be eligible to claim for periods starting on or after 1 November 2020

You can make a claim in respect of an employee, if the employee was on your payroll at 11.59pm on 30 October 2020 and you had made an RTI submission in respect of that employee between 20 March 2020 and 30 October 2020. Employees who are made redundant or who left on or after 23 September 2020 can also benefit from a grant under the scheme if you re-employ them, as long as you had made an RTI submission in respect of them between 20 March 2020 and 23 September 2020.

You do not need to have previously furloughed an employee and made a claim under the scheme on their behalf to claim a grant for them under the extended scheme.

Amount of the claim

The good news is that for the first phase of the extended scheme, which runs from 1 November 2020 to 31 January 2021, you can once again claim the full 80% of the employee’s usual wages for their furloughed hours (subject to the cap, set at £2,500 a month) – there is now no obligation for you to top up the amount claimed, as was the case for October and September.

As previously, the employee will receive 80% of their usual pay for their furlough hours (up to the cap). You must pass on the full amount of grant to the employee. Where the employee is flexibly furloughed, you must continue to pay them at their usual rate for the hours that they work, in addition to payment of the CJRS grant.

The amount of support that will be provided under the scheme for February and March 2021 has yet to be set; the Government are to review this in January 2021.

Calculating the claim

The amount that you can claim in respect of an employee’s furloughed hours depends on the usual hours that they work and their usual rate of pay. This can be complex. Guidance on working out what you can claim is available on the Gov.uk website.

Tax and National Insurance

You must deduct PAYE tax and employee’s National Insurance from grant payments that you make to your employees. You must also calculate and pay employer’s National Insurance on grant payments. Unfortunately, you cannot claim this back from the Government and must meet this cost yourself.

Making the claim

As previously, you will need to make your claim online via the claim portal. Claims must be for a minimum period of seven consecutive days and must start and finish in the same calendar month. If you use an authorised agent to file your RTI submissions, they can make the claim on your behalf.

You should be aware that tighter deadlines apply for making claims under the extended scheme – for pay periods starting on or after 1 November 2020, claims must be made by the 14^th of the following month. Where this date falls on a weekend, the deadline is the following Monday. The following table shows the claim deadlines for making claims under the extended scheme.

Claim period	Claim deadline
November 2020	14 December 2020
December 2020	14 January 2021
January 2021	15 February 2021
February 2021	15 March 2021
March 2021	14 April 2021

The money should reach your account within six working days of the day on which you made your claim, so remember to allow sufficient time so that you have the money available to pay your employees on time.

Claims for July to October 2020 had to be made by 30 November 2020.

Job Retention Bonus

The extension of the CJRS means that you will now not be able to claim a Job Retention Bonus in February 2021.

Can we help?

Speak to us if you are unsure whether you are able to make a claim under the extended scheme or if you need help in working out what you can claim.