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Please find below all updates and current news regarding the changing circumstances surrouding the COVID-19 outbreak.
It was originally announced that all self employed taxpayers would be able to defer their July payment on account in order to ease cash flow in the wake of the coronavirus outbreak. This deferral has now been extended to all taxpayers.
Therefore any taxpayer with a payment on account due by the end of July may defer the payment until 31 January 2021.
This is an automatic offer and no application is required. If you would prefer to make the payment in the normal manner you can continue to do so. However, for those who choose to defer, no penalties or interest will be charged.
Please note, this is a deferral only and not a reduction in the liability, therefore the amount due at 31 January 2021 will be higher.
We would urge all individuals to submit their 2019/20 self assessment tax returns as early as possible. This won't alter the due date of any payments but will give certainty over the amounts due so that time to pay arrangements can be agreed with HMRC where necessary.
The chancellor has announced his eagerly anticipated support package for self-employed individuals. The key points from the announcement are as follows:
Full details will be provided in due course once available.
HM Revenue & Customs (HMRC) have now issued guidance relating to the VAT deferral for payments arising between 20th March 2020 and 30th June 2020 if there is a direct debit in place. To ensure no payment is made to HMRC, the direct debit with your bank must be cancelled. This should be done as far in advance before the VAT payment is due to be made - otherwise HMRC will automatically collect it.
Once the VAT deferral period has expired, the direct debit must be set up again for future VAT returns and corresponding VAT payments. Agents cannot set up the direct debit payments on behalf of taxpayers.
The VAT liability in this deferral period has to be repaid to HMRC no later than 5th April 2021. Any VAT registered business not affected by COVID 19 can choose to continue making their VAT payments as normal.
All VAT returns are still due to be submitted on time in this deferral period.
If you have any questions or concerns, please do not hesitate to get in touch.
The previously announced Coronavirus Business Interruption Loan Scheme (CBILS) is now live.
This is a new scheme which has been set up to provide loan facilities of up to 5m pounds for smaller UK businesses who are experiencing cashflow difficulties as a result of COVID-19.
A summary of the key features of the scheme can now be found on the British Business Bank website:
Please note, the scheme is only available to UK businesses meeting the following conditions:
If the lender would be willing to offer finance to the business on normal commercial terms, without the use of the scheme, they will do so.
The finance is to be arranged directly through one of the British Business Banks 40+ accredited lenders, which includes most high street banks.
The advice is for each business to approach their own provider in the first instance. The relevant bank is likely to have information on their website about the application procedure.
Each lender will have their own requirements, however, it is expected that businesses will require a proposal, which could include cashflow/profit forecasts and projections.
Please do not hesitate to get in contact should you have any questions or require assistance with the proposal.
Take care and stay safe.
On Friday evening the Chancellor Rishi Sunak announced further support measures to combat the financial impact of the COVID-19 outbreak.
New measures are being announced regularly, however in some cases, the finer details as to how and when these schemes will operate are still to be revealed. A summary of the information released to date has been included below and further details will be provided once available.
The measures announced Friday evening are as follows:
For any businesses facing cashflow issues, the business interruption loan scheme should be available this week with further details expected today. It is anticipated that this will provide businesses with adequate resources in the short-term until other measures are up and running (such as the job retention scheme).
Please follow us on social media for more regular updates:
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Please do not hesitate to contact us should you have any questions regarding the above measures or any other concerns. We are here to support our clients during these difficult times.
Further to the budget last week, yesterday evening the government announced further support measures for individuals and businesses affecting by the COVID-19 pandemic. The new measures increase the value of the rescue package to 330billion pounds in an effort to support the economy. Chancellor Rishi Sunak also stated that if demand is greater than the initial 330billion pounds, he will go further and provide as much capacity as required.
The support measures announced yesterday and within the budget include:
The government will support small and medium-sized businesses with the extra costs of paying COVID-19 related Statutory Sick Pay. The refund will be limited to two weeks per employee. Employers should maintain records of staff absences in order to reclaim the refund but should not require employees to provide a GP note.
The existing systems are not designed to facilitate such refunds, therefore the government will work with employers over the coming months to set up a repayment mechanism.
The government had already announced the Business Rates retail discount would be increased to 50% in 2020-21. To support small businesses affected by COVID-19 the government is increasing it further to 100% for 2020-21. The relief will also be expanded to the retail, leisure and hospitality sectors for 12 months. Originally only businesses in those sectors with a rateable value below 51,000 pounds would be eligible but this will now apply to those above this threshold.
The government has also already announced the introduction of a 1,000 pounds Business Rates discount for pubs with a rateable value below 100,000 pounds in England for one year from 1 April 2020. To support pubs in response to COVID-19 the discount will be increased to 5,000 pounds.
Many small businesses pay little or no business rates because of Small Business Rate Relief (SBRR). To support those businesses, the government announced during the budget that they will provide 2.2billion pounds of funding for Local Authorities in England. This will provide 3,000 pounds to around 700,000 business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs. This figure has now been increased to 10,000 pounds.
Businesses and self-employed individuals in financial distress will receive support with outstanding tax liabilities.
HMRC have now set up a dedicated helpline to agree payment plans. Late payment penalties and interest may also be cancelled.
A business interruption loan scheme will be introduced temporarily to assist businesses with cashflow issues. The government will provide lenders with a guarantee of 80% on each loan to ensure these are more accessible. The scheme will support loans of up to 5million pounds in value (this was initially set at 1.2million pounds in the budget).
The controversial roll-out of the new private sector IR35 regime will be delayed by a year until April 2021.
For individuals who have COVID-19 or have to self isolate in accordance with government guidance, SSP will be paid from the first day of sickness rather than the fourth, which is normally the case.
Guidance has been issued to employers advising them to use their discretion not to require medical evidence for COVID-19 related absences.
Support will be provided for those who are ineligible for Statutory Sick Pay, including individuals who are self-employed.
'New style' Employment and Support Allowance will be payable for people directly affected by COVID-19 or self-isolating according to government advice from the first day of sickness, rather than the eighth day.
People will be able to claim Universal Credit and access advance payments where they are directly affected by COVID-19 (or self-isolating), without the current requirement to attend a jobcentre.
During the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating according to government advice for the duration of the outbreak, ensuring self-employed claimants will be compensated for losses in income.
The government will provide Local Authorities in England with 500million pounds of new grant funding to support economically vulnerable people and households in their local area. The government expects most of this funding to be used to provide more council tax relief, either through existing Local Council Tax Support schemes, or through complementary reliefs.
For individuals who are in financial difficulty due to the coronavirus, mortgage lenders will offer a three-month mortgage 'holiday'.
We expect to receive further announcements in the coming days. Some possible measures include:
We will be providing regular updates across our social media.
Please follow us on Twitter and LinkedIn to ensure you are kept up to date.
Twitter - https://twitter.com/AMRbookkeeping1
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If you are not on social media but would like to receive regular updates, please let us know and this can be arranged.
If you have any questions, please do not hesitate to get in touch.
We will be here to support our clients during these uncertain times.