The Chancellor, Rishi Sunak, set out new measures in response to the continuing economic impact of Coronavirus. Many of these build on announcements made earlier over spring and summer.
Income Tax
Under Mr Sunak’s earlier measures, income tax payments on account due 31 July 2020 could be deferred until 31 January 2021.
Now, these can be deferred further by spreading payments over 12 instalments with final payments due 31 January 2022.
Many small businesses have seen profits dip over the year. Claims should be made to HMRC to reduce payments on account due 31 January 2021 and 31 July 2021.
VAT
VAT that was due for payment to HMRC between 20 March 2020 and 30 June 2020 could be deferred until 31 March 2021.
Now, these payments can be deferred further by spreading over 11 interest free instalments.
Bounce Back Loan
The scheme is open to applications until 30 November 2020 offering loans up to £50,000 and repayment terms of 10 years. Although borrowers are liable for the loan, the government acts as a guarantor. The interest rate is fixed at 2.5%.
In the first year, borrowers make no repayments and the government pays the interest. They can pause repayments for 6 months if they have previously made 6 repayments, with no effect on credit ratings.
A new loan scheme will be launched in January 2021.
Please contact Clayton Accountants for a jargon free approach to tax and accounting.
