Coronavirus update – Government support - deferring VAT and Income Tax payments
As part of the package of measures to support businesses through this period of disruption caused by coronavirus, the Government has deferred VAT and Income Tax payments.
Briony McDermott, employment solicitor at Wake Smith, looks at the initiative.
“The Government has pledged to support businesses by deferring Valued Added Tax (VAT) payments for 3 months.
“If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
“For VAT, the deferral will apply from 20 March 2020 until 30 June 2020 and all UK businesses are eligible.
“This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period.
“Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.”
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
Briony added: “You are eligible if you are self-employed and is an automatic offer with no applications required.
“No penalties or interest for late payment will be charged in the deferral period.”
HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
For queries on employment law issues contact Briony McDermott at email@example.com