Government Support – Update
A new blog post by DU Member Digital Business Coach.
Just heard the news that our PM has tested positive for COVID-19 proving that this disease is no respecter of rank or position, as the heir to the throne will testify to.
The support package we know so far is extensive but not, I regret, comprehensive. It is true that detail is required and I am sure there will be further measures introduced following lobbying and those in the right places asking the right questions.
In no particular order:
VAT – the last quarter’s bill is due on April 7; advice I have received is to cancel the DD just in case. Going forward there should be no VAT to pay until April 2021. One point – for now – if sales are down and expenditure has exceeded income then deferral offers no great benefit.
Income Tax – those with schedule D tax to pay on 31 July may defer to 31 January 2021 without fines or penalties.
PAYE – unclear as yet but I have been advised to apply to HMRC under a “time to pay” arrangement if cashflow is tight. There is no guarantee of revenue sympathy – they could point out the PAYE was collected – but I am reassured that even the tax office will be kindly.
Corporation Tax – there is no specific relief save for the option to apply for a time to pay arrangement.
IR35 – reforms have been deferred for a year.
Compliance and Filing – GOV.UK confirmed March 25 that companies are to receive a 3 month extension to file accounts. An application has to be made though, it is not automatic. One point – I listened in to a webinar which covered this issue and a warning was issued to the extent that, though the tax authorities are apparently exercising sympathy now, a return to type is more than likely when the emergency has passed. I was encouraged to file on time if at all possible!
Self Employed Income Support – long awaited but fraught with confusion and, in many case, gaps. Overall, those “qualifying” can look forward to a cash payment, perhaps in June, of the lower of:
*80% of their profits, or
*£2,500 per month [for 3 months]
The grant is taxable.
Eligibility – those with:
*a trading profit of less than £50,000 in 2018-19, or
*an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2019-19
More than half of income must have come from self employment.
For those who have relatively recently become self employed and do not satisfy the eligibility criteria above, there is sadly, no support.
Owner/Managed Companies – I do not have accurate numbers of which but these too fall in between the support measures and will be justifiably feeling hard done by.
I am confident that the Government will respond once it recognises the sheer numbers who appear to miss out; the scale of work and responsibility carried now is truly unprecedented.
More when I get it.
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