Cash flow measures
These measures are time limited, and are intended to alleviate cash flow pressures for UK businesses and the self-employed during the stated time period. In particular, the measures are not intended to provide any permanent exemptions from the relevant taxes as such.
- VAT payments due to HMRC between 20 March 2020 and 30 June 2020 may be deferred by businesses until the end of the 2020/21 tax year. This automatically applies to all UK businesses, and should help ease cash flow. Businesses which wish to defer and pay VAT by direct debit should cancel that mandate for this period. For VAT registered businesses which make significant and regular VAT output tax payments to HMRC, the ‘VAT holiday’ is welcome as it will free up their cash flow position during the ‘holiday’ period. However such businesses may expect their own business customers to request a temporary ‘holiday’, in turn, in respect of the VAT charges which these customers are due to make to these businesses – for example, a business tenant which pays VAT on their rents to a landlord.
- For the self-employed, Income Tax Self-Assessment payments due on 31 July 2020 may be deferred until 31 January 2021. No application is required; no penalties or interest for late payment will be charged if payment is deferred until January 2021.
- Firms and individuals with outstanding tax liabilities in temporary financial distress as a result of the pandemic may be eligible to receive support through HMRC’s Time To Pay service. HMRC’s dedicated helpline is 0800 0159 559. Arrangements with HMRC may be agreed on a case-by-case basis.
Other updates
- The changes to the off-payroll working rules for the private sector which were due to come into force in April 2020 have been postponed to April 2021.
- Proceedings in the First-Tier Tribunal Tax Chamber have been stayed for a period of 28 days from 24 March 2020, by direction of the President of the Tax Chamber. Time limits in current proceedings are extended by the same period. Any party to proceedings may apply for these general directions to be amended, suspended or set aside or for further directions in relation to those proceedings.