Deferring VAT & Income Tax Payments

March 25, 2020

One of the key measures introduced by the Government was the ability for businesses to now defer their Value Added Tax (VAT) payments for 3 months. Furthermore, for the self-employed Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

These new measures whilst helpful in premise, we have explored them further and given you details on how to go about actioning them for your business.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

All UK businesses are eligible.

This measure has been introduced as an automatic offer with no applications required. Your business will not be required to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. The Government will continue to pay VAT refunds and reclaims as normal.

Important: Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

 

Income Tax

As previously stated, the Income Tax Self-Assessment payment due on the 31 July 2020 will be deferred until the 31 January 2021.

If you are self-employed are eligible.

This is once again an automatic offer with no application necessary. No penalties or interest for late payment will be charged in the deferral period. HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of COVID-19 and have outstanding tax liabilities.

These measures are crucial for us all to be aware of and if applicable to you and your business, they can be crucial in helping your business survive and recover during this time.

 

We are able to help you understand these measures and others that have been introduced, please click here to get in contact with us.

Our recent blogs

What is VAT reverse charge in the construction sector?

October 14, 2019

New legislation is changing the way businesses in the construction industry process their VAT liability and it’s important to be aware of how this could impact you. Coming into force on 1st October 2019, the VAT reverse charge policy doesn’t have a transitional period. This means you’ll need to be up-to-date and ready to apply the VAT reverse charge in appropriate circumstances from 1st October onwards.

Full Article

Small Business Support Grant

August 19, 2020

Announced a few weeks ago, many businesses are unaware of a grant that they can claim to support their businesses. This grant has been put in place for small to medium size businesses.

Full Article

Commonly Asked Personal Tax Questions

July 31, 2019

The world of self-assessment can be ever-changing and for many, it can seem more complicated than it is. We have outlined some of the most frequent questions we have encountered from clients, to help you understand this process much better.

Full Article

Understanding the Coronavirus Business Interruption Loan Scheme (CBILS)

March 25, 2020

This scheme is being delivered by the British Business Bank in order to support SMEs in accessing bank lending and overdraft facilities, during this difficult time.

Full Article