Some Major Tax Changes After Covid-19

28/12/2020Tax Issues , Tax Saving Tips

All the VAT payments due between 20th March 2020 and 30 June 2020 will be deferred at the tax payer’s end. This was one of the major tax changes made up by the UK government after the corona implications. In case if the taxpayer chose the deferral option, he must get done with it before 31st March 2021.

Here’s the good part: no late fee or penalties apply if someone’s going for a deferral. Neither do they have to worry about any approvals from HMRC? Apart from the Mini One Stop Shop (MOSS) scheme, the deferral is applicable to all VAT payments.


What Indirect Tax Rates and Reliefs are you Eligible for?

Wondering what other indirect tax changes and tax reliefs are you eligible for? Find out everything here. Apart from the regular rates, HMRC has announced a 5% relief for restaurants, pubs, bars, and cafes all across the UK. This includes all hot takeaway food items and non-alcoholic drinks. Unfortunately, the relief doesn’t apply to alcoholic drinks. But it’s okay since we can’t survive without food. Right?

If we talk about accommodation, the reduced VAT rate applies to accommodation and for visitors willing to explore more of the UK. Unfortunately, this doesn’t include any sports events in the UK. Non-alcoholic drinks also include beverages with low alcohol having an ABV percentage of less than 1.2% alcohol.


What Import Taxes are Waived on Vital Medical Supplies?

As per the UK chancellor announcement, there will be no taxes on import materials of medical supplies including testing kits, ventilators, and other clothing items. This relief is applicable until 31st December 2020. This relief was in need of the hour since coronavirus has impacted big and small cities equally.


What is Income Tax Payment Deferral?

Winter Economy Plan and tax deferral were some of the major steps taken by the government this year. Some of the points included in the Winter Economy Plan clearly mention that those who cannot pay their self-assessment liabilities on time are subject to the payment arrangements made under the winter economy plan. These include including the deferred 31 July 2020 payment, balancing payment for 2019/20, and the first payment on account for 2020/21 – as a result of COVID-19. Subject to meeting certain criteria, the amount due can be paid in monthly installments over a period of up to 12 months using HMRC’s “Time to Pay” facility. The interests will be applied after 1st February 2021 until a final settlement is made.

Deferment, however, is optional. If you can pay all the amount on 31st July 2020, you can do that. HMRC is no way to encourage late payment. That will be tricky at your end, as you might end up burdening yourself with additional payments. Remember that payment on account normally applies to income that’s not been added in through PAYE or didn’t include sufficient tax deduction. This just includes all the taxpayers within the income tax operating regime. These will include people who are not included in the corporate tax structure. These include:


  • Who operates a business on a self-employed basis;
  • Who are partners in a partnership (including LLPs); and with income tax obligations outside of PAYE.
  • Companies subject to income tax.


What Business Rate Relief to Expect?

Non-domestic rates also known as the business rates have been made applicable by England, Scotland, Wales, and Northern Ireland too. All these rates and tax changes are applied to every non-domestic property or business platforms like pubs, shops, warehouses, and factories.  This specifically applies to you when you’re using a building exclusively for business purposes.

Non-domestic rates or business rates are business tax administered by local authorities in England. The business retail discount increased to 100% for the 12 month period after 1st April 2020. The relief exclusively covers retail, leisure, and hospitality. If you’re a property owner, make sure your property is used properly.  If you own a property, it not operational due to COVID 19, but you’re planning to use it in the future, the laws are still applicable to it. The Scottish and Welsh Governments introduced equivalent non-domestic rates for holidays. This typically applies to retail, leisure, and hospitality covering 12 months exclusively. If a property has a value of £500,000, its eligible for retail, leisure, and hospitality rate relief in Wales.


What Businesses will be Rebilled?

If you’re a business owner, and you received the retail discount in 2019-2020, you will be rebilled by the local authority accordingly. If you’ve not claimed any discount, make sure you claim it for 2020/2021. If you’ve still got any inquiries, reach out to the local authority. We’re sure all your queries will be resolved in no time.


What if your Business is Distressed?

There are a large number of reliefs and grants available if your business is not in a good shape.  You can apply for a number of tax exemptions. That’s good news because you don’t have to worry about paying off loans. Even if your business wasn’t impacted by COVID (which is rare in these circumstances) you can still claim the exemptions under the COVID umbrella.


Head Over to HMRC and Request a Relief

Time to pay requests to help you out with deferring tax payments. These might include payments that are due or overdue over a period of time. Make sure you’re justifying the deferral well in front of the authorities. Make your case strong with a customer compliance manager. Make his statement proof of why you need a deferment. HMRC allowed a deferral of 3 months at the start. It may be looking forward to adding in a much more formal footing to the plans. The deferral has been agreed till June 2020.

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