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Updates from the Clayton & Brewill team.
VAT, self assessment and the Coronavirus Job Retention Scheme
In addition to the briefing we shared last week, we wanted to provide you with an update on further measures that have been announced by the government to support businesses during the coronavirus pandemic. The latest measures include deferring VAT and self assessment payments for six months and the Coronavirus Job Retention Scheme.
VAT
The deferral for VAT payments applies from 20 March 2020 until 30 June 2020. All VAT registered businesses are eligible. This will generally mean the deferral of one quarter’s VAT: the payment due on 7 April, 7 May or 7 June 2020 or the monthly payments due on each of these dates. No application is required. However, businesses will need to ensure that they suspend direct debits with their bank. It is also advisable to log onto to the HMRC portal and make the appropriate changes to direct debit settings. It is also advisable to check your bank again 4-5 days before any payment would be taken to ensure the Direct Debit has not been reinstated by HMRC as this could be automatic.
Businesses should continue to file their VAT returns by the due date.
Self assessment
The deferral self assessment applies to those who are self employed and relates to the second payment on account for 2019/2020, due on 31st July 2020. This is now deferred to 31st January 2021. Although very few pay their self assessment income tax by direct debit, if a direct debit is set up, it will need suspending to ensure that no payment is taken.
Self assessment returns should still be filed by their due date.
More information can be found here.
The Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme aims to protect jobs and incomes, as part of the national effort in response to coronavirus. Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on the payroll but are temporarily not working during the coronavirus outbreak. Any employer in the country will be eligible for the scheme.
UK workers of any employer who is placed on the Scheme will keep their job and the government will pay up to 80% of their wages, up to a total of £2,500 per worker each month, backdated to 1st March. The scheme will initially operate for three months with a possible extension.
The wage subsidy will apply to businesses where bosses have already had to lay off workers due to the coronavirus, as long as they are brought back into the workforce and instead granted a leave of absence.
More information on the Scheme can be found here.