Join the Chambers Members Area Member Discounts

Wilkins Kennedy

Wilkins Kennedy smaller Tel: 01483 306318Web: http://www.wilkinskennedy.com

About Wilkins Kennedy

Wilkins Kennedy LLP Chartered Accountants and Business Advisers provide a full range of accounting and business advisory services to a diverse range of businesses and individuals across the UK and abroad. Established in 1882 as a single regional office, the firm has expanded to 14 regional offices based in the South of England plus an office in the Falkland Islands, with a turnover of £38 million, 68 partners and over 500 members of staff. As a fast growing, top 20 UK accountancy firm, Wilkins Kennedy LLP has an excellent reputation for assessing individual and business needs in a changing marketplace and delivering intelligent, practical financial solutions. Services offered by the firm and our business divisions include: Audit & Assurance, Tax, Business & Advisory, Corporate Finance, Restructuring & Recovery, Forensic Accounting, Outsourced Services and Human Resources. Each regional office offers clients a fully supportive, personal service, through a structured, partner-led approach.

Clients benefit from senior overview and legislative advice combined with a team of dedicated specialists and expertly trained professionals. Specialist teams operate in the following market sectors: Charity & Not for Profit, Financial Markets, Insurance, PFI, Property & Construction, Professional Services and Public Sector. Business divisions of the firm include: WK Corporate Finance LLP, WK Financial Management Ltd and WK Business Solutions Ltd. Wilkins Kennedy is a registered member of the ICAEW, the IAPA, The Association of Business Recovery Professionals R3 and European grouping ILAS.

Contact number: 01483 306318

Web Address: http://www.wilkinskennedy.com

Wilkins Kennedy News

What Brexit could mean for VAT

As Britain is left waiting to see what the future holds as an independent nation, many businesses will be asking questions about what to expect following the Brexit result and key timings as to when those changes will be taking place. VAT is one area where the UK could see more significant changes after leaving the EU and out of all the taxes is likely to be the most affected.

What’s changed?

Now the UK has voted to leave the EU, businesses could face a reform in the way VAT is charged and paid on domestic supplies of goods and services.

Any changes to VAT law would no longer be bound by decisions of the European Court of Justice. Without the constraints of the VAT Directive, the UK Government may have greater freedom to apply its own interpretations of the rules which could lead to changes in how HMRC applies VAT.

Furthermore, Brexit will result in an exit from the EU’s Customs Union.  However, until we officially leave the EU, the current rules on the supply of goods between EU countries will remain.  Indeed, HMRC has set up a recorded message on their helpline which confirms this.  A sensible move. The UK has up to two years to exit the EU from a legal perspective and until this time, current VAT and duty legislation based upon the EU framework will still apply. Indeed, at this stage, nothing will change immediately.

The next chapter

In my view, it seems most likely that we will end up with a model similar to Norway which, whilst able to set its own agenda in terms of its VAT regime, does enjoy some benefits in terms of the ‘single market’ and freedom in terms of movement of goods.

In this regard, when the UK leaves the EU, it would no longer be a member of the European Economic Area (EEA).  The UK would have to seek to re-join the European Free Trade Association (EFTA) and then apply to join the EEA.

It is possible that this could be tackled in the course of withdrawal negotiations with a view to the UK acceding to EFTA and the EEA as soon as it had left the EU, but the move would not be automatic.  There is no precedent for a non-EU/non-EFTA state joining the EEA.

Radical reform

Brexit actually represents a fantastic opportunity for the UK Government to radically simplify many aspects of the tax.  It could also be used to reform contentious areas such as reliefs to charitable bodies and so on, all of which are currently constrained by the EU legislative framework.

However, the reality is much more likely to be that any new regime will be further complications for businesses – with additional administration and more ‘red tape’ – than that which they currently enjoy.

All remains to be seen, of course.  In the meantime, it is clear that all we can really do is to wait and see.

For further information, please contact your local Wilkins Kennedy office or contact us to speak to a member of the WK VAT team.

Guildford office – Guildford@wilkinskennedy.com – 01483 306 318

Brexit – Employment of EU Nationals and UK employees

In the light of a majority vote in favour of Britain leaving the European Union, governance surrounding employment is likely to face several months of uncertainty, as certain EU regulations are untangled from the web.

There have already been hints in the press that on leaving the EU, the UK may become a member of the European Economic Area (EEA). Non-EU countries including Norway and Iceland are already part of the EEA which is essentially an area in which the free movement of certain goods and services, even people, are allowed within the internal market of the EU.

If the UK does join the EEA, members have rules that allow employees to apply to their home state for a social security exemption certificate, known as a Portable A1. This certificate allows employees coming to the UK to continue to pay social security in their home state rather than UK NICs.  Likewise when UK employees go to an EEA country with a certificate they are able to continue to pay UK NICs instead of the local social security.

Some non-European Economic Area countries have separate Social Security agreements with the UK, including Turkey, Croatia, Canada and USA. Employees coming to the UK from these countries holding valid social security certificates will pay social security contributions in their home country rather than UK NICs. As these agreements are not related to the EU these should continue as they stand.

For countries that have no social security agreement with the UK, National Insurance Contributions still apply. The rules for UK National Insurance contributions (NICs) depend on which country an employee is going to work in or comes from.

Whist we wait for the details of Article 50 to emerge, in the short term, the UK could experience a shortage of workers as the outcome of the EU referendum may leave some employers delaying the international transfer of staff until more information comes to light in the process of exiting the EU. It is thought that it could take around two years for the details of the changeover to be agreed – so let’s see what the future holds.

If you could benefit from some advice about how employment taxes could be affected by the Brexit, why not call Wilkins Kennedy today to see how we can help?

Guildford office – Guildford@wilkinskennedy.com – 01483 306 318

Egham office – heathrow@wilkinskennedy.com – 01483 435561

 

 

Driving the costs of company fuel: what can you claim?

The use of a company vehicle where an employer also provides fuel can result in an expensive and unwanted tax cost for the unwary. For example, does the company provide a fuel card to its company car users and if so is the employee required to repay the cost of any private mileage to the company? Perhaps most importantly, when doing this is the employee clear on the difference between private and business mileage for employment tax purposes?

Fuel cards

A company that provides a vehicle may also supply the user with a fuel card which can be used to buy fuel at the pump. What happens next will either be:

  • The user and main driver of the vehicle, will use the card to pay for the fuel and none of that cost will be required to be reimbursed to the company, or;
  • Of the costs covered on the fuel card the employee is required to repay the element of the fuel cost that is considered to be in respect of the “personal” mileage element.

The company will decide which of these options will apply to the employee for tax purposes and whether or not the company will bear the full fuel cost to include the private mileage element. If it does (and option 1 above therefore applies) a taxable fuel benefit in kind (BIK) will be in point. To avoid the BIK, the employee must repay the private fuel element, but it is important to emphasise that the entire private mileage element must be repaid in order to eliminate the charge, otherwise HMRC will seek the full BIK charge.

Business or pleasure?

Whether mileage is private or business mileage is largely determined by the purpose of the journey, the time spent at the location visited and the nature of duties carried out at the destination. The considerations in this area are complex. Broadly business mileage will include travel to a “temporary” workplace where the employee travels to carry out duties directly relating to the employment. It does not cover any domestic travel, for example, from the employee’s home to his or her permanent workplace.

Understanding the distinction between a permanent place of work and any other (temporary) places the employee may visit for business purposes is very important. It is quite possible for a workplace which is visited regularly and which is not the primary permanent workplace to become a second permanent one if it is visited regularly and/or routine tasks are carried out there.

Accurate categorisation is therefore essential. If a company thinks it is being reimbursed the full cost of the private mileage an employee has travelled and a subsequent review by HMRC identifies some additional private mileage (where a temporary workplace turns out to be a permanent one) this will result in an unexpected and expensive car fuel benefit in kind.

 

 

How can Wilkins Kennedy help?

The employment tax team here at Wilkins Kennedy can help you to ensure your employee travel policies are compliant and ensure that mileage is accurately categorised thus avoiding unexpected claims for additional income tax and national insurance from HMRC. If you could benefit from some advice, then don’t hesitate to give us a call today to see how we can help.

Guildford office – Guildford@wilkinskennedy.com – 01483 306 318

Egham office – heathrow@wilkinskennedy.com – 01483 435561