Covid-19: Measures to support businesses experiencing increases in costs or financial disruptions – other
VAT-Registered Businesses
All UK businesses are removed from the need to make a VAT payment to HMRC during the period from 20 March 2020 until 30 June 2020. VAT refunds and reclaims will be paid by the Government as normal.
All relevant VAT payments are deferred to 31 March 2021.
The business will be required to submit VAT returns as normal.
This relief is given automatically; i.e. the business does not need to make a claim.
Where a direct debit is in place, the business will need to cancel the direct debit. This was confirmed by HMRC on 26 March.
Time to pay arrangements
A business which has or will have outstanding tax liabilities, other than the VAT payment mentioned above should consider contacting HMRC for a Time to Pay arrangement.
HMRC will consider:
- agreeing an instalment arrangement, typically over 12 months;
- suspending debt collection proceedings; and
- cancelling penalties and interest.
The dedicated helpline – 0800 0159 559 – is open Monday to Friday 8 a.m. to 8 p.m., and Saturday 8 a.m. to 4 p.m.
If you need to speak with HMRC for a time to pay, please contact me beforehand so that we can discuss the likely queries and the information you will be required to provide.
Loans to provide working capital
A small business is able to claim finance (e.g. a loan or overdraft) through the Coronavirus Business Interruption Loan Scheme of up to £5m. The loans are 80% guaranteed by the Government and the Government will meet the cost of the first years’ interest charges and any fees imposed by the lender.
To qualify for the scheme, the business must:
- be UK based;
- have annual turnover of no more than £45m; and
- satisfy the eligibility criteria set out by the British Business Bank (BBB) – see the quick reference guide and detailed guidance provided by the BBB.
The scheme is delivered through commercial lenders. Should the business wish to apply, it should contact its lender or one of the accredited providers (see the BBB website, here).
Delayed right of forfeiture for business tenancies
The Government has announced that legislation will be enacted to ensure that a business that is unable to meet a rent payment in the next three months will not be forced out of its premises.
Legislation: Coronavirus Act 2020 (section 82 for properties in England and Wales and 83 for properties in Northern Ireland)
Extension of Companies House Filing Deadlines
A company which is unable to file its accounts with Companies House on time should consider applying for 3-month extension. This may prevent the imposition of a fixed penalty.
Unlike some other measures, this is not given automatically – the company must apply to Companies House for an extension.
It is possible to apply for an extension online.
Deferral of 31 July 2020 payment on account for Self-Assessment Tax
The deferral of the 31 July 2020 payment on account applies to all taxpayers. This includes shareholders in the company who may have an income tax liability in respect of dividend income.
THIS GUIDANCE IS ACCURATE AS OF 31 MARCH 2020. SHOULD YOU HAVE ANY QUERIES OR WISH TO DISCUSS ANY IMPLICATIONS PLEASE CONTACT US.