There are specific customs requirements for commercial goods that you take with you to sell abroad. You must declare any goods intended for sale outside the UK, whether they are in your baggage or a private vehicle.

The regulations for commercial goods or samples carried by passengers in their accompanied baggage are known as Merchandise in Baggage (MIB). As of January 2024, the threshold for simplified declarations of MIB increased to £2,500 (increased from £1,500). If your goods fall below this threshold, you can make a simple online declaration within five days before your departure.

A full export declaration is necessary if the goods exceed £2,500 in value or if they are subject to excise duty or import/export restrictions.

For Northern Ireland, different rules apply. If you are taking commercial goods from Northern Ireland to Great Britain or the EU in your accompanied baggage, no declaration is required.

There are separate procedures for temporarily taking goods abroad (such as samples for a trade fair) or when using a courier or freight forwarder.

The VAT treatment of motor expenses is an important concern for any business that incurs VAT on these costs. Below, we highlight key points to consider regarding the recovery of input tax (VAT) when leasing vehicles.

We have covered below some important points to be aware of concerning the recovery of input tax (VAT) when leasing vehicles.

• Leasing company recovering VAT on purchase of cars. A leasing company can usually recover the VAT incurred as long as the cars are leased at a commercial rate.
• Businesses leasing a car and recovering the VAT. If a business leases a ‘qualifying car’ for business purposes they cannot, in most cases, recover 50% of the VAT charged. The 50% block covers the private use of the car. The business can reclaim the remaining 50% of the VAT charged, subject to the normal rules.
• Cars leased primarily for taxi or driving instruction. A business can reclaim all of the VAT charged on the lease if the car is a qualifying car and the business intends to use it primarily for:
  • hire with a driver for carrying passengers; or
  • providing driving instruction.
• 50% block applying to self-drive hire (daily rental) as well as leasing. This restriction applies if the car is hired simply to replace an off the road ordinary company car.

If you have submitted a self-assessment return and later realise you need to make changes, there are specific rules to follow. This situation might arise if, for instance, you entered a number incorrectly or omitted certain information from your self-assessment return.

If you filed your return online, you could amend your return online as follows:

1. Sign in to your personal tax account using your Government Gateway user ID and password.
2. From ‘Your tax account’, choose ’Self-Assessment account’ (if you do not see this, skip this step).
3. Choose ‘More Self-Assessment details’.
4. Choose ‘At a glance’ from the left-hand menu.
5. Choose ‘Tax Return options’.
6. Choose the tax year for the year you want to amend.
7. Access the tax return, make the corrections, and file it again.

You must wait 3 days (72 hours) after filing before updating your return. If you opted to file your return on paper, you would need to download a new return and fill in the pages that you wish to change and write ‘amendment’ on each page. You must also include your name and Unique Taxpayer Reference on each page and then send the corrected pages to the address where you sent your original return.

If you used commercial software to submit your self-assessment return, then you should contact your software provider in the first instance. If your software provider cannot help, contact HMRC.

The deadline for making changes for the 2022-23 tax year using the methods mentioned above is 31 January 2025. If you miss this deadline, you will need to write to HMRC. For example, if you discover an error in your 2021-22 return after 31 January 2024. Your letter should specify the tax year you are correcting, explain why you believe you have overpaid or underpaid tax, and state the amount involved. You can request a refund up to four years after the end of the relevant tax year.

A final reminder that the 2023-24 tax return deadline for taxpayers who continue to submit paper self-assessment returns is 31 October 2024. Late submission of a self-assessment return will incur a £100 late filing penalty. The penalty usually applies even if there is no liability or if any tax due is paid in full by 31 January 2025.

We would recommend that anyone still submitting paper tax returns consider the benefits of submitting the returns electronically and benefit from an additional three months (until 31 January 2025) in which to submit a 2023-24 return.

Taxpayers with certain underpayments in the 2023-24 tax year can elect to have this amount collected via their tax code (in 2025-26), provided they are in employment or in receipt of a UK-based pension. The coding applies to certain debts and the amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000.

Daily penalties of £10 per day will also take effect if the tax return is still outstanding three months after the filing date up to a maximum of £900. If the return still remains outstanding further higher penalties will be charged from six months and twelve months after the formal payment deadline.

Cash Flow Forecasting

Creating a cash flow forecast helps you predict your inflows and outflows, allowing you to anticipate any cash shortages. Update it regularly, be conservative in estimates, and account for any seasonal trends. A well-maintained forecast can help you identify potential issues early on and take corrective actions.

Speeding Up Cash Inflows

Encourage customers to pay promptly by offering incentives for early payments or tightening credit terms. Automated invoicing can also speed things up. If you’re struggling with long payment cycles, consider invoice factoring, where you sell invoices to a third party to unlock cash quickly.

Control Cash Outflows

Negotiate extended payment terms with suppliers, and stagger payments throughout the month to maintain cash in your account longer. Review expenses regularly and eliminate unnecessary costs. Using business credit cards for small purchases can help but be cautious about interest rates.

Build Cash Reserves

Aim to have an emergency fund that covers at least three months’ worth of expenses. This will provide a safety net during slow periods. Set aside money for tax obligations, such as VAT and corporation tax, to avoid any last-minute cash crunches when payments are due.

Use Financing Options

If necessary, consider short-term financing options such as overdraft facilities or short-term loans. These can provide relief during a cash crunch but should be used strategically and sparingly to avoid long-term financial strain. Invoice financing is another option if you have cash tied up in outstanding invoices.

Review Your Pricing Strategy

Make sure your prices are in line with your costs, especially if inflation or other market conditions have driven up your expenses. Periodic reviews of your pricing can ensure you’re generating enough revenue to cover costs and build cash reserves. Adjust prices if necessary and consider a value-based pricing model.

Monitor Key Metrics

Keep a close eye on metrics like Days Sales Outstanding (DSO), which tracks how quickly customers are paying. The lower the DSO, the better for your cash flow. Also, monitor your gross profit margin and liquidity ratios, ensuring you have enough cash on hand to cover liabilities.

Plan for Growth

Rapid growth can strain cash flow if you don’t plan for it properly. When expanding, ensure your forecasts account for the additional costs you’ll incur. Where possible, opt for gradual, sustainable growth, and consider pre-selling products or services to raise cash in advance.

Are you using the best VAT scheme?

Consider using the VAT Cash Accounting Scheme if you’re VAT-registered and qualify to use this scheme. It lets you pay VAT only when you’ve been paid by your customers, easing cash flow pressures.

Prepare for Uncertainty

Scenario planning helps you prepare for unexpected cash flow problems. By considering best, worst, and expected cases, you’ll be more prepared for any surprises. Insurance can also help by covering unexpected events that could otherwise create a financial burden.

We can help

If you are experiencing cashflow difficulties and would value advice with implementing any of the above strategies, please call, we can help.