Knowing when to defer

Knowing when to defer

There is little doubt that COVID-19 is cutting a swathe across UK business. In response, the government has been issuing a number of measures which are designed to assist impacted businesses.

In this article we have chosen to highlight a few of the measures which may impact a broad-spectrum of companies but these should not be considered the only remedies which are available to organisations. With information coming at almost daily, it is important that business leaders take time to acquaint themselves with updates as this will help them to understand what should be prioritised and what can be deferred.

Let’s start with VAT returns. [1] Businesses with a VAT payment due between 20th March and 30 June can choose to defer the payment up to 31 March 2021. Whilst this could give businesses some financial leeway, it is important to note that although the payment is deferred, the return still has to be submitted in the normal time period. That means that wherever possible, day-to-day financial accounting should be prioritised. It is worth noting that this concession does not apply to the VAT MOSS payments which cover supplies of digital services into or out of the EU.

By contrast, companies have been given some leeway with filing their end of year accounts. With effect from 25 March companies will be able to apply for a three-month filing extension [2] via an online system. Companies house say that those using the system and quoting COVID-19 as the reason for the delay will automatically receive an extension. This may particularly help companies who may have difficulty in meeting with accountants or auditors in the light of the current lockdown.

With the P11d return date of 6 July being some way off there has been no extension to the filing date at time of writing. However, with so many employees working from home HMRC have published guidance on certain tax considerations. [3] These include more obvious areas such as the provision of a mobile phone and SIM card, broadband line or computer. But they also look at other considerations such as the provision of loans to employees, and the reimbursement of hotel costs and expenses should employees need to self isolate but cannot do so at home. The guidance also indicates where items should be included on P11ds, and where they can be covered by the annual PAYE settlement agreement.

[1] https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

[2] https://www.gov.uk/government/news/companies-to-receive-3-month-extension-period-to-file-accounts-during-covid-19[3] https://www.gov.uk/guidance/check-which-expenses-are-taxable-if-your-employee-works-from-home-due-to-coronavirus-covid-19

Nick Lindsay
nick.lindsay@gmail.com
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