A significant number of small businesses in the UK do not take full advantage of HMRC-approved...
As we come to the end of the coronavirus pandemic, it's time to examine the financial implications and tax fallout. If you run a small business, it's crucial to stay up to date with how the unprecedented outbreak might affect your taxes.
What will be the tax fallout from coronavirus? Of course we won't know the full implications until the first (emergency) budget. But we already have a good indication.
How VAT Payments Are Affected
The government has announced some changes to VAT payments. They are designed to help struggling businesses manage their cash flow during the inevitable downturn. For full details, check out the dedicated HMRC page.
VAT payments due between 20th of March and 30th of June:
- Can be deferred
- Will not accrue interest
- Will not attract penalties
You don't need to tell HMRC that you plan to defer. You can simply not make the payment (or cancel the direct debit). Just make sure that:
- You still submit your VAT returns on time
- You pay the money by 31st March 2021
Tax Fallout For The Self-Employed
HMRC has already introduced an income support scheme for the self-employed. However, there are also some tax benefits you should know about.
You can defer income tax self assessment payments from 31st July to 31st January next year. If you still can't pay then, you might be able to arrange an instalment arrangement.
HMRC will ask you about your income, expenditure and assets. If they think you'll be able to pay your tax given a bit more time, they will offer you terms. Make sure you have all your details to hand before you call.
You can take advantage of a 12 month business rates holiday if you are in:
- The retail sector
- The hospitality sector
- Regardless of your rateable value
You can also claim a £25,000 grant from the government if your business:
- Has a rateable value between £15k and £51k
- Is either: retail, hospitality or leisure
Tax And Working-From-Home
You've probably had some (or all) of your employees working from home during the lockdown. It's worth checking what is taxable. (This only applies to employees working from home due to the coronavirus outbreak. It does NOT apply if they have been furloughed).
For full details, check out the HMRC page on taxable expenses. Briefly, the following equipment, services or supplies are non-taxable:
- A mobile phone (and SIM) limited to one per employee
- Broadband fee if your employee was not previously paying for broadband
- Office supplies (including laptops/tablets) mainly for business purposes
You may also be able to benefit by keeping records of expenses like:
- Electricity and heating
- Temporary accommodation
- Vehicles and fuel
In each case, you should check the rules very carefully (or work with an accountant) before submitting a claim.
If you would like some help organising your taxes, please get in touch. Key Business Consultants are tax specialists who have helped hundreds of small businesses just like yours.
We'll make sure you are fully compliant with all the coronavirus regulations. We can even deal with HMRC on your behalf.