blog header image

Posted : 03 Apr 2020 at 10:25:37
Category: Important Announcement

Share this article

It is in the Government’s interests to support taxpayers and businesses through this crisis, who will in their turn support the economy once restrictions are lifted. Tax measures are likely to be used as a tool for support. Announcements are coming thick and fast, and we will keep updating this article with all of the new tax measures relevant to you. If there is anything you need to discuss, please get in touch.

Deferring tax payments

If you have a tax payment that you will struggle to make, you should contact HMRC to discuss a deferral as soon as possible. We can do this for our clients. HMRC has set up a dedicated helpline to support businesses and the self-employed whose finances are affected by COVID-19, including the option to agree Time To Pay (TTP) arrangements where appropriate. TTP arrangements can also be made for personal tax payments on the normal helpline (second link below).

A TTP arrangement involves an extended payment deadline, normally collecting regular instalments of tax over the extension period. The extension is rarely more than one year. Penalties are waived if the TTP deadlines are met, though interest generally applies. The Government has confirmed that, if a business or self-employed individual has administrative difficulties in contacting HMRC or paying tax, it will explore cancelling late payment penalties and interest.

Tax helpline to support businesses affected by coronavirus (COVID-19)

If you cannot pay your tax bill on time

July tax payments deferred

The self-assessment income tax payments due in July have all been deferred automatically until January 2021. No interest nor penalties will be applied. Originally, this measure was announced as applicable only to the self-employed, but now covers all those with July income tax payments.

The guidance states that the deferral is optional and that if you are still able to pay your second payment on account on 31 July you should do so.

VAT payments deferred

All required VAT payments have been deferred until the end of June to assist the cashflow of UK businesses. This applies automatically to all VAT payments, but the Government will pay VAT refunds and reclaims as normal.

COVID-19: support for businesses

UK tax residence

Some individuals who are normally non-UK tax residents may find that, due to travel or other restrictions arising from the pandemic, they spend more time in the UK than planned. Days spent in the UK can usually be ignored, up to a maximum of 60 days, if the individual’s presence in the UK is due to exceptional circumstances beyond their control. The individual also needs to leave the UK as soon as circumstances permit to qualify for this exception.

The Government has published new guidance on the interaction of COVID-19 and exceptional circumstances as follows:

Circumstances are considered exceptional if you:

  • are quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus;
  • find yourself advised by official Government advice not to travel from the UK as a result of the virus;
  • are unable to leave the UK as a result of the closure of international borders, or
  • are asked by your employer to return to the UK temporarily as a result of the virus.

Residence, Domicile and Remittance Basis Manual

Off-payroll working rules deferred (IR35)

New rules requiring businesses to assess whether or not contractors should be treated as employees have been deferred for a year to 6 April 2021.

Off-payroll working rules reforms postponed until 2021

Job retention scheme – wage reimbursement

The Chancellor has offered businesses help with paying the wages of employees who would otherwise be laid off. If a worker is ‘furloughed’, HMRC will reimburse 80% of their wage cost, capped at £2,500 per month.
The system for reimbursement is still being set up, but if a business needs cash flow support prior to this it can apply for a COVID-19 business interruption loan.

COVID-19: support for businesses

Income support for the self-employed

After some pressure, the Chancellor has announced measures to support the self-employed that are roughly on par with the support offered to employees. The self-employed will, however, be permitted to continue trading while claiming the support.

Those who are self-employed, and have lost income due to COVID-19, may be eligible for a taxable cash grant from the Government. This is broadly available to those with trading profits under £50,000 and will be up to 80% of average monthly earnings, capped at £2,500 per month.

Only those who were shown as self-employed on their 2018/19 tax returns will be eligible, but if they have not yet filed the return they have until 23 April to file if they wish to claim income support. The scheme will run for three months initially, and payments are expected to be made in June.

Other measures

The Government has announced a raft of non-tax measures to support businesses and these include:

  • measures to ease access to and increase eligibility for benefits, including sick pay;
  • increases in certain benefits;
  • rates relief for many businesses, along with linked grants and loans (interest-free for up to a year); and
  • ‘mortgage holidays’ for up to 3 months for homeowners, or landlords of tenants, who are experiencing financial difficulties due to COVID-19.
  • More detail on some of these measures can be found on the Government website and in our related articles below.

Original Source - Smith and Williamson

SIMILAR NEWS

blog header image
IMPORTANT ANNOUNCEMENT
THE GOVERNMENT LAUNCHES £2 BILLION FUND CALLED KICKSTART SCHEME

The Kickstart Scheme provides funding to employers to create job placements for 16 to 24 year olds. The government has introduced a new Kickstart Scheme in Great Britain, a £2 billion fun ...

blog header image
IMPORTANT ANNOUNCEMENT
ROCKY ROAD AHEAD FOR VANS REDEFINED AS CARS

If modified crew-cab vehicles should now be treated as cars for benefit in kind purposes, what does this mean for input VAT and capital allowances? Helen Thornley investigates the wider tax implicatio ...

blog header image
IMPORTANT ANNOUNCEMENT
CLOCK IS TICKING TO REPAY CORONAVIRUS GRANTS

Self-employed individuals, and employers, have 90 days to inform HMRC that they have over-claimed the SEISS or CJRS grants and repay any excess before penalties apply.  Any incorrect CJRS gr ...

blog header image
IMPORTANT ANNOUNCEMENT
TAX CREDITS DEADLINE: CUSTOMERS AT RISK OF LOSING OUT

Customers whose circumstances have changed in the last year or who have received a letter to reconfirm their income details must contact HMRC before 31 July. Tax credits customers only have until 31 J ...

blog header image
IMPORTANT ANNOUNCEMENT
OFF-PAYROLL APRIL 2021 PRIVATE SECTOR ROLLOUT NOW A CERTAINTY

David Chaplin of Contractor Calculator reported last night the following after the four-year loss against Off-Payroll Rules due to come in as of April 2021. David wrote; The April 2021 rollout of the ...

blog header image
IMPORTANT ANNOUNCEMENT
CITB AGREES TO CUT LEVY BILLS BY 25% FOR TWO YEARS

CITB has revealed plans to cut levy bills by 25% over the next two years and give cash-strapped contractors more time to pay. Employers will continue to have a payment holiday on the levy until S ...

business-directory Business Directory
smartbusinessdirectory Payroll Services Business Directory
truebusinessdirectory payroll-services Directory
payroll-services Directory