Help from HMRC for businesses affected by Coronavirus
UPDATED AS OF 28 MARCH 2020
We posted previously about the financial support available for businesses affected by Coronavirus. This article discusses the help from HMRC for businesses affected by Coronavirus following the chancellor's recent announcement.
Deferring VAT payments
Help from HMRC with VAT involves deferring payments for a 3 month period. This will apply for the period 20 March 2020 until 30 June 2020. If you decide to defer your VAT payment as a result of coronavirus, you must settle the VAT due on or before 31 March 2021.
HMRC have indicated that the scheme is optional you can defer the VAT payment until a later date or pay the VAT as usual. The important point to mention is that the deferral does not cover VAT MOSS payments.
If you normally pay your VAT by Direct Debit you should contact your bank to cancel this as soon as you can. Alternatively, you can cancel online if you’re registered for online banking.
Any VAT liabilities that are due following the end of the deferral period should be paid as normal. HMRC will publish further details of how to repay the VAT you’ve deferred in due course.
HMRC have confirmed our previous advice which is to continue to file your VAT return by the relevant due date. They have also stated that any VAT reclaims or repayments will be processed as usual.
Deferring income tax payments
The second 2019/20 income tax Self Assessment payment on account which would usually be due on the 31 July 2020 will be deferred until the 31 January 2021.
If you are self-employed you are eligible for the deferral. By self-employed we would also expect this to include directors of limited companies who are required to make tax payments by virtue of dividends received.
The important to point mention is that no penalties or interest for late payment will be charged in the deferral period.
Coronavirus Job Retention Scheme
Under the coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will have the ability to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.
This scheme applies to those employees who have been asked to stop working, but who are being retained on the payroll and known as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.
The Coronavirus Job Retention Scheme covers the cost of wages backdated to March 1st and is initially open for 3 months, but will be extended if necessary. You can read more details here.
Rather frustratingly the government has not indicated at present what further relief may be available for sole traders and partnerships who have suffered loss of income as a result of Coronavirus. They have also not provided details of how they propose to support directors running their own companies. However as soon as more details become available we will let you know.
For more useful information, check out our Ebooks here.
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at email@example.com.