Coronavirus - The Tax Fallout

Gary Green
Gary Green
June 5, 2020

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.

Business Rates

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.

Interested in our services?
Fill in your details and a member of our experienced team will be in touch shortly to discuss your needs.
Contact Form Demo (#1)
We adhere to strict GDPR rules and do not reveal or sell your data to any third-parties. For more, please read our Privacy Policy.
Latest Insights
June 13, 2024
Credit Card Sales Campaign

Originally set up in 2014, HMRC’s Credit Card Sales Campaign was aimed at individuals and businesses...

June 6, 2024
Advice Regarding Tax Litigation

The term “litigation” is used to refer to a tax dispute’s resolution when a statutory appeal...

May 30, 2024
Let Property Campaign

HMRC has looked closely into tax compliance among UK property investors and UK landlords since 2013...

May 23, 2024
What Is A Residence & Domicile Enquiry?

Questions regarding domicile and residence have significant effects on taxes that are payable and due in...

May 16, 2024
Company Tax Investigations By HMRC

If HMRC decides to carry out an investigation into a company’s tax returns, it is important...

May 9, 2024
A Guide To The WDF (Worldwide Disclosure Facility)

More than a hundred countries around the world have made a commitment to exchange information with...

May 2, 2024
Contractual Disclosure Facility And HMRC COP9

Any tax investigation that HMRC carries out can be regarded as serious. However, if you become...

April 25, 2024
A Guide To Managed Service Companies, Personal Services Companies And IR35

Usually, people work as either a self-employed individual or an employee for a business. Nevertheless, there...

April 18, 2024
Criminal Tax Investigations

It is HMRC’s aim to ensure that taxpayers comply with the regulations and law, but HMRC...

View Our latest insights »
Get the latest UK tax & business news and guidance delivered straight to your inbox
Newsletter Form (#2)
We care about the protection of your data. No spam. Unsubscribe anytime.
Copyright © 2022 Key Business Consultants LLP. Reg: E&W OC389322
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram