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The Virus and Tax Deferrals

View profile for Marc Dorsett
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The Virus and Tax Deferrals

The World is currently going through a difficult period at the moment, to put it very mildly.

As at the time of writing, the majority of the Country is on lockdown and who knows what the daily Government broadcast will bring today.

A couple of the measures already announced include support for employees who have been furloughed by their employer, deferment of VAT payments and income tax payments on account.

If you are a furloughed employee, which essentially means that you're not allowed to work but are kept on as an employee, you can have 80% of your salary (capped at £2,500 per month) paid for by the Government. This helps employers keep staff and employees keep their jobs.

The VAT deferment means that any VAT payment due between 20 March and 30 June 2020 won't need to be paid yet. The amount due will roll up and payment will be due at the end of 2020/2021, hopefully when funds are more available. Remember to cancel any VAT direct debit!

Similarly, self-employed individuals who have a 31 July 2020 payment on account coming up can defer the amount until 31 January 2021. No interest or penalties will arise. This only applies to the self-employed so if you have a liability for another reason you will probably still need to pay it.

That's just a brief note on a few points and there is little doubt that the effects of the COVID-19 virus will be felt for a long time to come. Eventually, the payments from the Government will need to be paid for so expect tax increases in the next year or two.

If you would like to know more or wish to discuss any tax questions you may have please do not hesitate to contact Marc Dorsett on 01245 228146 or dorsettm@gepp.co.uk.