By Andrew Mitchell, Tax Advisor, Armstrong Watson LLP By Andrew Mitchell, Tax Advisor, Armstrong Watson LLP
With constraints set to ease over the coming weeks and months, many companies will try to get back on track. However, until they can realistically do so, it will take financial support and careful planning to weather the end of the storm.
At the time of writing, we were eagerly waiting to see what announcements the spring budget might bring, wondering if and how the Chancellor will raise taxes – and how – to make up for the deficit remaining due to the budget’s financial impact on the pandemic.
There is an enormous cost involved in helping businesses and individuals, and the government must at some point make up for that deficit.
Positive pre-budget news that business owners have welcomed is the ability to spread the refunds for VAT deferral.
Last year, the government announced that VAT payments due between March 20 and June 30, 2020 could be deferred in full until March 31, 2021.
It was recently announced that these deferred payments, which would previously have been due at the end of March, can be postponed further and the payments can be spread interest-free over up to 12 months.
HMRC introduced the new system for deferring VAT on February 23, 2021 and applications can now be made until June 21, 2021.
If your company wants to apply for the system, you must have an online government gateway account and be aware of your sales tax returns. You must also correct any errors in the affected returns before submitting an application to the VAT deferral system.
Unfortunately, agents cannot join the system on behalf of a company, so it is up to the companies themselves to join the system.
You can find detailed information on participating in the program at gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19.
The Chancellor’s further announcements this week, along with the government’s new roadmap out of the pandemic, will undoubtedly keep entrepreneurs firmly focused on sustainability, efficiency and survival in the post-pandemic world.
Tax liabilities and contributions will be a major factor in future business decisions, especially with regard to planned changes. For help and assistance with tax planning issues please call me on 01756 620000 or email email@example.com