Last week the UK government has announced several unprecedented steps they will be taking in order to help businesses during the Covid-19 crisis. The key announcements in this regard have been listed below.

  • HMRC will be deferring payments on account for self-employed taxpayers so the deadline for payments normally due on 31 July 2020 will be extended to 31 January 2021. These payment deferrals will be automatic and do not require any applications, and no penalties or interest for late payments will be charged due to the deferral.
  • UK businesses will be able to delay VAT payments for the period between 20 March 2020 and 30 June 2020 and will be allowed to pay their VAT liabilities arising during that period until the end of the 2020 to 2021 tax year. However, businesses will still receive VAT refunds and reclaims as normal. These payment deferrals will be automatic and do not require any applications to be made.
  • UK businesses that may have had to lay off any employees as a result of the Covid-19 crisis, can get help from HMRC by submitting relevant information about those employees through a new online portal and will be able to reimburse 80% of their wage costs, up to a limit of £2,500 per month.
  • The IR35 rules have been deferred to 6 April 2021. This will give businesses a bit more time to review how the rules may affect them and plan implementation accordingly.
  • Companies House confirmed that if businesses are impacted by the coronavirus (eg, self-isolating) and cannot file their annual accounts on time they can apply for an extension where they will automatically be granted a two-month extension, with a further month possible if deemed necessary on a case by case basis.
  • HMRC has confirmed that their interest rates for late payments will be reducing to 2.75% from 3.25% by the end of March 2020, which is in line with the reduction of the base rate of the Bank of England.

We are closely monitoring the various briefings and will be assisting businesses to understand the application of these measures in practice as further guidance becomes available.