Help from Government
A Coronavirus Job Retention Scheme (Furlogh Scheme Extended until 30th April 2021)
HMRC will reimburse 80% of employee wage costs, up to a cap of £2,500 per month per employee.
The scheme was amended in July 2020 to allow for flexbile working so employees can work only part of their contracted hours.
Deferring VAT Payments
For VAT, the deferral will apply to any VAT deferred between 20 March 2020 until 30 June 2020 so basically covers the February, March & April VAT Returns.
This was an automatic offer with no applications required. Taxpayers were inititally required to pay by 31 March 2021 any liabilities that have accumulated during the deferral period but in Winter Economic Plan the Chancellor announced that rather than paying one lump sum, HMRC will now accept 11 smaller interest free payments until end of financial year 2021/22. So you have a choice. You can pay your deferred VAT in full by 31st March 2021 or opt in to the new payment scheme.
To opt in you will need a Government Gateway Account and you need to opt in before 31st March 2021 plus pay the first instalment when you opt in.
VAT refunds and reclaims will be paid by the government as normal.
Self Assessment Tax
The Self-Assessment Tax due on the 31 July 2020 could initially be deferred until the 31 January 2021.
Further announcements were made in the Winter Economic Plan; tax payers will benefit from Time to Pay self service facility so no liability will need to now be paid until January 2022.
So if wanted to you could defer the tax that was due on 31st July 2020 & 31st Janauary 2021 until January 2022. If the total liability is less than £30,000 you can deal with the extentions online yourself.
Again you will need a Government Gateway Account.
Interest will be payable for late payment.
Self-Employed Income Support Scheme
There was also the introduction of SEISS. HMRC contacted the self-employed and where business is negatively impacted by COVID-19, and there was the opportunity to apply for a grant which initially equated to 80% of the average trading profits for last three years. Basically a monthly sum is calculated and a lump sum payment will be made for three months directly to your bank account.
The scheme was extended in the Winter Economic Plan. For the period November to January 2021, the SEISS will be available to those whose who are currently trading but face reduced demand. The period from February 2021 to April 2021 will be kept under review by the Governments and details will be announced nearer the time.
Other measures in place
- Support for Sick Pay
- Business Rate Holiday
- Cash Grants provided by the local authority. This is a measure for business forced to shut down during the second lockdown.
- Business Interruption Loan Scheme - This can be via your bank or other 3rd party lender. We have access to a panel of lenders via an online portal so contact us for help.
- Bounce Back Loans - You can apply for this directly to your bank and the range of loans will be from £2k to £50K but restricted to 25% of annual turnover.
- 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. Special number set up: 0800 0159 559.
- Payment holidays for mortgage payers
- Non eviction orders for tenants