Businesses urged to reinstate VAT direct debits

Business have been reminded to reinstate their direct debit mandates before the deferral of VAT payments due to the coronavirus (COVID-19) comes to an end on 30 June. The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021. However, businesses need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due…

On 12 June, HMRC updated its guidance for employers who have furloughed employees under the Coronavirus Job Retention Scheme (CJRS). From 1 July, employees will no longer have to be furloughed for a minimum period of three weeks. From this date the CJRS will have more flexibility to allow claims on a pro rata basis. Employers will be able to permit employees to work some of the week and be furloughed for the rest. An employee needs to have been…

HMRC has updated its guidance regarding the eligibility of businesses for the two Self-employment Income Support Scheme (SEISS) grants. The tax authority has published a number of examples that show when a business has been ‘adversely affected’ and meets the criteria for the first and second grants. Those self-employed individuals (including those trading as a partnership) adversely affected in the period up to 13 July 2020 can claim the first grant. If they are adversely affected in the period from…

MPs have urged the government to reduce VAT for firms in the tourism sector in order to help them recover from the coronavirus (COVID-19) lockdown. A report published by the All-Party Parliament Group (APPG) for Hospitality and Tourism has called for a reduction in VAT for businesses in the hospitality sector, alongside an overhaul of the business rates system in England and Wales and the creation of a new autumn Bank Holiday. Just 11% of businesses in the UK hospitality…

The Low Incomes Tax Reform Group (LITRG) has warned self-employed individuals that the government’s coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS) is taxable. The group is concerned that many may wrongly assume that the SEISS funds are exempt from tax, particularly as they are termed ‘grants’ by the government. It is warning that many people may have to pay a third of the grant back in tax and Class 4 national insurance contributions (NICs). The LITRG said that grants made…

The government has extended the Coronavirus Job Retention Scheme (CJRS) for parents on statutory maternity and paternity leave. The Treasury recently announced that parents who are returning to work over the coming months will be eligible for the CJRS despite the scheme closing to new entrants on 30 June. Individuals on adoption leave, shared parental leave and parental bereavement leave will be eligible, but only if they work for a business that has furloughed employees. Commenting on the matter, Chancellor…

Business loans through government-backed coronavirus support schemes have reached almost £35 billion, according to the latest figures published by the Treasury. The figures show that £3.6 billion has been granted to 85,000 businesses in the past week, taking the total to £34.9 billion. The Bounce Back Loan Scheme (BBLS), which allows small businesses adversely affected by the COVID-19 pandemic to apply for up to £50,000 with the government guaranteeing 100% of the advance, continues to be the most popular scheme.…

The Institute of Directors (IoD) has warned that business debt will hinder the economic recovery from the coronavirus (COVID-19) unless steps are taken to make the burden more manageable. The IoD polled 720 company directors and found that 51% believe that debt their company has taken on during the pandemic will have a negative impact on their recovery. 57% said that debt will hold back their investment plans for the next two years. The business group is calling on the…

HMRC has reminded employers who intend to furlough an employee for the first time that the deadline to do so is approaching fast. The Coronavirus Job Retention Scheme (CJRS) will be closed to new entrants from June 30. In order for the minimum three-week furlough period to be completed by then, the final date which an employer can furlough an employee for the first time is June 10. Employers will have then have until 31 July to make any claims…

HMRC has announced a five-month delay to the introduction of the domestic VAT reverse charge for construction services, due to the impact of the coronavirus (COVID-19) pandemic on the sector. The change will now apply from 1 March 2021 and will overhaul the way VAT is payable on building and construction invoices as part of a move to reduce fraud in the sector. Under the domestic reverse charge, the customer receiving the service will have to pay the VAT owed…