COVID19 financial support for the payment of tax

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Simon Misiewicz

22nd October 2020

Delay payment of income tax, VAT and corporation tax

You may be interested to know how Coronavirus also is known as COVID19 affects other aspects of the economy be it self employment, property or other aspects of employment.

COVID19 economic downturn clearly has a knock on the effect on the available amount of money for UK taxpayers both individuals and business owners.

Rishi Sunak was quick to provide financial support because of the financial crisis caused by COVID19.

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VAT deferment due to Coronavirus

HMRC is allowing taxpayers to defer the VAT payments that were due to be made between 26th March and 30th June 2020.

You do not need to inform HMRC if you wish to defer payment. You can opt into the deferral simply by not making VAT payments due in this period. If you pay by Direct Debit, you should cancel this with your bank.

You should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.

Any VAT deferred payments need to be paid by 31st March 2021.

Income tax - Payments on account 31st July 2020

Government guidance about tax liabilities and payment options due to coronavirus

If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline

– Self Assessments tax on 0300 200 3822

– Nominated partners in business partnerships can negotiate time to pay with HMRC on behalf of the partnership or individual partners.

– Other personal taxes on 0800 0159 559.

Ordinarily, you would be expected to make a second payment on account for your 2020/21 income tax liability on 31st July 2020, if you made a payment on account on 31st January 2020.

However, HMRC has deferred this payment automatically. You do not need to contact HMRC. You simply do not pay the second payment on account. You will need to pay your overall tax liability by 31st January 2021.

Delay of IR35 for one year.

The onus remains the liability of the employee/contractor. The delay does not mean that HMRC will not enforce the tightening of tax legislation to determine if individuals are an employee or a supplier. If you are deemed to be an employee, you will still be personally liable for the income tax and employee national insurance.

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