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COVID19 – VAT Deferral, Income Tax Deferral, Mortgage Support, Insurance, Off-Payroll Working

COVID19 - VAT Deferral, Income Tax Deferral, Mortgage Support, Insurance, Off-Payroll Working

VAT Deferral – Small Business, Contractor, Sole Trader

All UK business registered for VAT can defer VAT payments due between 20th March 2020 and 30th June 2020 until the end of tax year 2020-21.

Benefits:

  • VAT payable until 30th June 2020 can be paid at the end of 2020-21 tax year i.e. April 2021.
  • VAT refunds and reclaims will be paid by the government as normal.

This is an automatic offer with no applications required. You will still need to pay the VAT amount due in full before April 2021.

Income Tax Deferral – Contractor (Ltd), Sole Trader, Landlord

For Income Tax (Self-Assessment), payments due on the 31st July 2020 will be deferred until the 31st January 2021.

Eligibility:

  • All those Self-employed.
  • This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

You will still need to pay the amount in full before 31st January 2021

Support with Tax Affairs – Small Business, Contractor, Sole Trader, Ratable Property, Landlord

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

You can call HMRC’s dedicated helpline on 0800 0159 559 for help and advice. HMRC will decide on a case by case basis and you should contact HMRC directly.

Off-Payroll Working In The Private Sector (IR35) – Contractor

Start date for the new IR35 tax rules has been deferred to 6th April 2021

Mortgage Support – Small Business, Contractor, Sole Trader, Ratable Property, Landlord

Mortgage borrowers can apply for a three-month payment holiday from their lender. Tenants can apply for a three-month payment holiday from their landlord.

  • Tenants cannot be evicted from their home over the next three months.
  • Homeowners cannot have their home repossessed over the next three months.

Eligibility:

  • Both residential and buy-to-let mortgages are eligible for the holiday.

Borrowers still owe the amounts that they do not pay as a result of the payment holiday and interest will continue to be charged on the amount they owe.

Insurance – Small Business, Contractor, Sole Trader, Ratable Property, Landlord

Businesses that have cover for both pandemics and government ordered closures should be covered.

The government and insurance industry confirmed on 17th March 2020 that advice to avoid pubs, theatres, etc., is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses should check the terms and conditions of their specific policy and contact their providers directly.

Other(s)

Relaxation in planning regulations to allow pubs and restaurants to start providing takeaways without a planning application. Universal Credit: Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay. For more details on support measures, refer here.

We are expecting more measures to be announced in the coming days for self-employed, contractors and free-lancers. We will keep you posted on the developments and how government is supporting businesses during this difficult time. For any concerns, we encourage you to get in touch with your account manager. We assure you to be there for you in these difficult times. We shall overcome this together.

About the Author:

Sumit Agarwal
, A specialist accountant and tax adviser for freelancers, contractors and small businesses since 2005, He is an expert in business growth and development strategies. A renowned tax expert for owner managed businesses and contractors, He won the British Business Forum’s Young Entrepreneur Award in September 2012, presented at the House of Commons by MP Vrinder Sharma.