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COVID-19: VAT/SA Deferrals & Job Retention Scheme

COVID-19: VAT/SA Deferrals & Job retention scheme

As of Friday evening the Chancellor announced further measures to support people and businesses through this period of disruption caused by COVID-19.

This includes:

Support for businesses through the Coronavirus Job Retention Scheme

All UK employers will be able to access support to continue paying part of their employee’s salary for those employees that would otherwise have been laid off during the crisis.

To access the scheme you will need to…

  1. Designate affected employees as ‘furloughed workers’ and notify your employees of this.
  2. Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.
  3. HMRC will reimburse 80% of furloughed workers wages costs, up to a cap of £2,500 per month.

HMRC are working urgently to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers.

Support for businesses through deferring VAT and Income Tax payments

VAT

Businesses will be supported by VAT payments being deferred from 20th March to 30th June 2020.

This is automatic and no applications are required. You do not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020/2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds will be paid as normal.

Income Tax

Self-assessment payments due on the 31 July 2020 will be deferred until 31 January 2021.

This is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

Business Action Plan

Here is a quick action plan to help focus your thoughts:

1. Keep your eye on Government advice:  https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response
2. Your main purpose is to protect the health of yourself, employees and customers and then reduce the risk of the financial impact to your business. So you need to take action now.
3. Hold a meeting with key team members.
4. Summarise the actions and allocate responsibility to make them happen.
5.Talk to us – we are all in this together. 

Take care of yourselves and your businesses.
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