The Government has announced a new scheme that will apply to the employment of EU nationals immediately after the UK leaves the EU if it does so without securing a deal.

It had originally been thought that freedom of movement would end on Brexit date in a no-deal scenario, meaning that any EU national who wanted to come to the UK to work after Brexit would need to apply through a complicated points-based immigration system.

However, while free movement will technically end on 31st October 2019, much of the free movement framework will remain in place for a period.

Temporary Leave to Remain (TLR) scheme

Transitional arrangements mean that a Temporary Leave to Remain (TLR) scheme will allow EU nationals to move to the UK after Brexit to continue living, working and studying in the UK after 31st December 2020.

The TLR scheme also applies to people from EEA countries who are not part of the EU, and Swiss nationals.

Applications for TLR will be free and can be made once the scheme opens after the UK leaves the EU. TLR will be valid for 36 months from the date it is granted, and the deadline for such applications will be 30th December 2020.

Residence beyond January 2021

People who arrive in the UK after Brexit and wish to continue working in the UK from 1st January 2021 will need to qualify through a future immigration system, the details of which are not yet finalised.

EU nationals who were resident in the UK by 11pm on 31st October 2019 may use the EU Settlement Scheme to obtain settled status, provided they have at least five years’ residency in the UK, which allows them to remain in the UK indefinitely.

People with less than five years’ residency will be able to apply for pre-settled status, which allows them to remain in the UK until they attain the required length of residency and then be able to apply for settled status.

Who needs to take action?

Employers will not be required to distinguish between EU nationals who moved to the UK on or before 31st October 2019 and those who arrived afterwards.

EU nationals will be able to provide evidence of their right to work using either their passport, their national identity card, their digital status under the EU Settlement Scheme, or the Euro TLR scheme until the new points-based system is introduced from January 2021

The advisory fuel rates apply from 1 September 2019.  The previous rates, effective June 2019, can be used for up to one month from the date the new rates apply.

The rates only apply in the following circumstances:

• reimburse employees for business travel in their company cars; or
• require employees to repay the cost of fuel used for private travel.

These rates cannot be used in any other circumstances.

The advisory electricity rate for fully electric cars is 4p per mile. Electricity is not a fuel for car fuel benefit purposes.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory fuel rates from 1 September 2019

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

• You wont be entitled to the EA if your liability to employers' Class 1 NI in the previous year exceeded £100,000;
• You won't automatically qualify for EA. You will need to claim it in each tax year. This will involve a declaration and submission to confirm eligibility;
• connection to another employer may affect eligibility; and
• the EA will be state aid and counts towards the maximum aid (€200,000) you can receive in a rolling 3 year period.  You must have room to accommodate the whole £3,000 EA within the state aid limit or lose your entitlement to it.

HMRC have published Brief 10 (2019) entitled Domestic reverse charge VAT for construction services - delay in implementation.

This Brief confirms that the introduction of the domestic reverse charge for construction services will be delayed for twelve months until 1 October 2020.

This follows concerns raised by industry representatives that some businesses in the construction sector would not be ready to implement the reverse charge for building and construction on 1 October 2019.

Released  06 September 2019

The Fourth EU Money Laundering Directive (4MLD) was the reason for HMRC introducing the Trust Registration Service which broadly requires all trusts with tax liabilities to register with HMRC.

The new Directive will bring into its scope all UK express trusts not just those with UK tax implications and also non-EU resident trusts which own UK land or property or which have a “business relationship” with an entity in the UK such as solicitors, accountant or bank.

The term ‘express trust’ means a trust that was expressly/deliberately created by a settlor as opposed to being set up through a court order. The onus will be on the trustees and their agents to determine whether the trust is an express trust or not. The government has issued examples of the categories of UK trusts likely to have to register to include discretionary trusts, interest in possession trusts, many types of bare trusts, charitable trusts and employee ownership trusts.

Public access will also be available to the trust register to anyone who has a legitimate interest. There is no de minimis thresholds or exemptions provided.

For unregistered trusts already in existence on 10 March 2020 the proposed by government deadline for registration is 31 March 2021. For trusts created on or after 1 April 2020 the government is proposing that they trust should be registered within 30 days of its creation and this 30 day deadline is also to be used for any amendments to be made to the TRS data once the availability to do so is there.

The practical difficulty for agents will be in helping their clients identify the trusts they are involved in that the trustees will have to register for the first time. For example life policies written in trust, trusts owning a single property where the beneficiary lives, etc. Many clients will not have advised their agent of their interest in such trusts if no tax liabilities have previously arisen.

More detailed guidance can be found here.