HOW TO HELP YOUR BUSINESS THROUGH COVID

While the bitter-cold winter snap may now be easing, the major impact on the economy of Covid-19 remains. The economic scars are set to be long-lasting but there is help available. Indeed, there could be a support scheme that you are eligible for right now. With that in mind, this instalment of the blog runs through the latest assistance packages that are available. Check out below to see if you’re eligible...and if you have any queries, get in touch as we’re here to help.

Self-Employed Income Support Scheme (SEISS)

As you may be aware, HMRC extended the SEISS to allow for a possible third and fourth grant to those who are eligible. The timeframe in which to claim the third grant has now passed (HMRC requested that taxpayers should register their claim by January 29). As yet, details for a potential fourth SEISS payment – to cover from February until April 2021 – have not been outlined by the government. Neither has it been documented as to how much self-employed personnel will receive from a fourth grant. Once the chancellor Rishi Sunak has made all of those details available, we’ll keep you informed on this blog.

VAT Deferral

HMRC has issued some guidance to taxpayers who deferred their VAT payment between March 20 and June 30, 2020 and as such still have that payment to make. The taxpayer can either, pay the deferred VAT in full by March 31, 2021, can opt in to the VAT deferral new payment scheme when it launches in early 2021, or the taxpayer can contact HMRC in person if they require more help to pay. Taxpayers who pay their deferred VAT liability in full by March 31, 2021 do not need to contact HMRC. Where taxpayers opt into the new VAT deferral payment scheme, instead of paying the full outstanding amount by March 31, they can make 11 smaller monthly payments which are all interest-free. All instalments making up the outstanding amount must be paid in full by March 31, 2022. In order for taxpayers to take advantage of the new payment scheme they must satisfy each of the following criteria.

  • Still have deferred VAT to pay
  • Be up to date with their VAT returns
  • Opt into the new scheme by March 31, 2021
  • Pay the first instalment by March 31, 2021
  • Be able to pay each instalment by Direct Debit

2019/20 Tax Return update

For all taxpayers who (for whatever reason) were not able to file their 2019/20 tax return by the deadline date of the 31st January 2021, HMRC have stated that they have until February 28, 2021 to file their tax return, and as long as this deadline is achieved HMRC will not levy a late filing penalty against those taxpayers. However, all tax liabilities which were not paid in full by January 31, 2021 will attract late-payment interest, so these amounts should be paid to HMRC as soon as possible. Taxpayers should pay any outstanding balance or arrange a payment plan with HMRC by March 31, 2021 to avoid a 5% late payment penalty.

Help on hand to spread your tax bill

HMRC have revealed that almost 25,000 self-assessment taxpayers have now set up an online payment plan to manage their tax liabilities in up to 12 monthly instalments. In October HMRC increased the ‘Time To Pay’ arrangements from £10,000.00 to £30,000.00 for self-assessment customers. Once taxpayers have filed their 2019/20 tax return and know how much they owe they can use the self-serve facility to set up a monthly direct debit and spread the cost of their tax bill. The self-serve threshold was increased to £30,000.00 to assist taxpayers who have been affected by the COVID-19 pandemic. Taxpayers can apply for a payment plan, but must meet the following criteria.

  • Do not have any outstanding tax returns
  • No other outstanding tax debts
  • No other HMRC payment plans in use
  • The debt must be between £32.00 and £30,000.00
  • The payment plan must be set up no later than 60 days after the due date of the debt.

We hope the contents of the blog were informative and clear. We'll be posting another instalment shortly after the Budget, which is scheduled for Wednesday March 3. In the interim, feel free to get in touch...