ICAEW.com works better with JavaScript enabled.

Tax news in brief

16 December 2020: Highlights from the broader tax news this week includes: support from HMRC on withdrawal of VAT retail export and airside tax-free shopping scheme; the opening of an online portal for businesses using postponed VAT accounting to download statements; and data on how the enhanced CEST tool has been used in its first 12 months.

Brexit: Support on withdrawal of VAT retail export and airside tax-free shopping schemes

Ahead of the end of the transition period on 31 December, HMRC has published a brief giving details of the withdrawal of the VAT retail export scheme (VAT RES) from Great Britain and the end of tax-free shopping in UK airports. The brief confirms that purchases made on or before 31 December 2020 will be valid for a VAT refund, even if visitors leave the country after that date. It also highlights that the VAT RES scheme will continue to be available in Northern Ireland, but there are special rules for goods purchased there and taken into Great Britain. Find out more.

Brexit: Postponed import-VAT statements portal opens

On 10 December, HMRC opened an online portal to allow businesses using postponed VAT accounting to download monthly import VAT statements for imports after 1 January 2021. Businesses need a government gateway ID and a GB EORI number to access their statements which will be made available for six months from the date it is published. 

Close to 1m CEST determinations made since reboot

A year after launching an enhanced version of its CEST (Check Employment Status for Tax) service, HMRC has revealed that the updated CEST has been used more than 975,000 times. According to HMRC 55% of those using the service were those hiring staff and 43% were workers, just 2% of users were agencies. It also confirmed that CEST had determined that 52% of the cases referred to were outside off-payroll working rules and 29% were inside the rules, leaving 19% undetermined. HMRC will now be publishing quarterly updates on the CEST usage data.

Reminder on pay dates and impact on benefits

A final reminder for employers that they must report the contractual pay date in December’s full payment submission even if they pay staff on an earlier date this month. If they report the earlier actual pay date they risk impacting universal credit awards to staff, as these claims are based on earnings within a calendar month starting on the date they first claimed. Find out more.