Deferrals and Tax Planning Post-Covid

Deferrals and Tax Planning Post-Covid

Sponsored content by Andrew Mitchell, Tax Consultant, Armstrong Watson LLP

WITH restrictions set to ease over the coming weeks and months, many businesses will be looking at getting back on track, but until they realistically can, financial support and careful planning will be needed to weather the end of the storm.

At the time of writing we were waiting with anticipation to hear what announcements might be afforded by the Spring Budget and wondering whether the Chancellor will choose to increase taxes – and how – in order to make up for the deficit left by the financial impact of the pandemic.

The support provided to businesses and individuals has come at a huge cost and the Government will need to fill this deficit at some point.

Pre-budget positive news that business owners will have welcomed is the ability to spread VAT deferral repayments.

Last year the government announced that any VAT payments due between 20th March and 30th June 2020 could be deferred in full until 31st March 2021.

It has now been recently announced that these deferred payments, which would have been previously due at the end of March, can be further postponed and the payments spread over up to 12 months interest free.

HMRC launched the new VAT deferral payment scheme on the 23rd February 2021 and it is now open for applications until 21st June 2021.

If your business would like to apply for the scheme you must have an online government gateway account and be up to date with your VAT returns. You must also correct any errors on the affected returns before you make an application for the VAT deferral payment scheme.

Unfortunately agents cannot join the scheme on a business’ behalf so it is up to businesses themselves to join the scheme.

For full details on how to join the scheme please visit https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

The Chancellor’s further announcements this week, alongside the government’s new roadmap out of the pandemic, will no doubt have business owners firmly focused on sustainability, efficiencies and survival in the, dare we say it, post-pandemic world. Tax liabilities and contributions will be a major factor in future business decisions, particularly in light of any planned changes.

For help and assistance with any tax planning issues, please give me a call on 01756 620000 or email andrew.mitchell@armstrongwatson.co.uk