Coronavirus: Tax payment deferrals

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  2. Coronavirus: Tax payment deferrals
Coronavirus: Tax payment deferrals

 

On Friday 20 March the chancellor made a number of announcements, the most notable one being government support to cover up to 80% of employees wages where those employees were otherwise going to be laid off due to coronavirus. We’ve covered that in our blog here

 

However, several other new measures were announced particularly in relation to deferrals of tax, covered below

 

Deferrals of July Income Tax Payments

  • This is an automatic offer for all those who have a tax payment falling due 31 July 2020.
  • When originally announced, this was only for the self-employed. This is no longer the case; it applies to everyone with a July 2020 liability.
  • There is no application is required. The liability can simply not be paid.
  • The government have advised that those that are still able to make the payment, should still pay as usual. But it is optional.
  • No penalties or interest for late payment will be charged, where the liability is not paid.
  • However, with less being paid ‘on account’ towards eventual 2019/20 tax bills, there will be more of a tax catch-up due in January 2021. Unless further deferral measures are announced.

 

Deferrals of VAT payments

  • All VAT returns should be prepared and filed as normal. It is the payment ONLY that is deferred.
  • Valued Added Tax (VAT) payments are being deferred for 3 months.
  • This covers VAT liabilities arising in the period from 20 March to 30 June 2020.
  • There is no application required. Liabilities arising in the period can simply not be paid.
  • If you pay by direct debit, its recommended to cancel this to ensure payment is not taken.
  • No penalties or interest for late payment will be charged.
  • VAT refunds and repayments can still be claimed, as usual. If you receive VAT repayments you should leave any direct debit set up in place.
  • The deferred liabilities will need to be paid by April 2021.

 

Once again Sowerby want to ensure you of our commitment to our clients during this time. If you have any questions or concerns please do not hesitate to get in touch.