Further support to businesses and the self-employed to delay payment of various taxes to help them during the coronavirus outbreak was announced by the Government last week. They include:
Any VAT that falls due for payment in the period from 20 March, 2020 to 30 June, 2020 can be deferred until the end of the 2020-21 tax year.
This is not a cancellation of any liability that falls due in this period, merely a deferral. Businesses will need to ensure that they have funds to settle any arrears on or before the end of March 2021 (5 April 2021).
Any refunds due from HMRC will be paid as usual.
Self-Assessment Second Payments
It has been confirmed that self-employed persons’ self-assessment, second payment on account for 2019-20, due July 31, 2020, can be deferred until January 31, 2021.
Taxpayers should be aware that as with the VAT offer, this is a deferral, not a cancellation of tax due.
Those who take advantage will need to pay their second payment on account, any balancing payment for 2019-20 AND any first payment on account – if any is due – for 2020-21 on this later date.
In both cases, there is no need to apply to HMRC to defer payments.
If you need to clarify which VAT payments can be deferred or the likely longer-term cash flow effects if you defer your July self-assessment payment, call one of the Bracey’s team for advice.