March 19, 2020

COVID-19 Update 23/03/2020

The situation is still far from clear. We can pass on the following information which is available on this link:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-deferring-vat-and-income-tax-payments

VAT

Our reading of the above is that there is no need to make any payments to HMRC in respect of VAT currently owed to them. This delay in payments currently extends to 30 June. The VAT that you do not pay during this period will remain payable at some future point.

Further points for VAT (Extract from Accounting Web)

  1. If you have a VAT payment due between 20th March and end June, you have the option to defer that payment until a later date. The payment must be made before 31st March 2021.
  2. There will be no interest charged on any deferred VAT payment, and you do not need to tell HMRC if you are deferring a payment during this time.
  3. As the direct debit normally automatically takes payment, HMRC currently advise to cancel it just to be safe.  

Employees - the 80% help

The following is as reported on the above link. It does not offer any immediate way forward:

How to access the scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

Furloughed workers - is a temporary leave of employees due to special needs of a company or employer

Corporation tax 

We cannot see any specific help, but our advice remains to ring the HMRC Time to Pay team on 0300 200 3835 to tell them you cannot afford to pay your corporation tax for the time being.