HK BUSINESS FORWARD UPDATE - 22 February 2021

This update is written and posted on 22^nd February 2021 and is likely to quickly become out of date. We will endeavour to update information as it becomes available.

Previous updates and other useful information can be found at our WEBSITE.

We are all still in lockdown, waiting on the Governments opening up plan, so this is a short update and more of a reminder of key actions and dates.  At the moment, a few of the Government support schemes are due to end shortly, together with action to be taken if you haven’t paid your personal tax liability or agreed a payment plan with HMRC before the end of March.

The Budget is 3^rd March and we should learn more about what/if Government Covid-19 business support measures are to be extended or any new support to be given as part of the Government opening up planning.  Rumours are circulating in the press that corporation tax will be increased gradually, the stamp duty holiday will be extended etc. However, our advice is that if you need support or feel you will in the future, we advise taking action now, and not “banking” on extensions.

With the continued lockdown period it is important that businesses continue to make use of the grants and funding supporting available, details of which can be found on our WEBSITE. 

SELF-ASSESSMENT TAX PAYMENTS

Tax payments were due 31^st January, and currently an interest charge of 2.6% is being applied by HMRC.  If you haven’t paid your personal tax liability, and you can’t by the end of March, then you need to get a payment plan agreed with HMRC. HMRC announced on 19^th February that Self Assessment customers will not be charged the initial 5% late payment surcharge penalty if they pay their tax or make a Time to Pay arrangement by 1‌‌ April.

Payments of less than £30k can be dealt with online, above this amount you have to call HMRC and get an agreement with HMRC.  The phone line is less busy than it was at the end of January and we have found it much easier to get through.  HMRC will only deal with the taxpayer, not the agent, when it comes to agreeing tax payments.  Details can be found below:

Details of how to agree a payment 

If you haven’t filed your self-assessment tax return, following the 31^st January extension, this also has to be completed by the end of February, otherwise a late filing penalty will be incurred.

Be aware of copycat HMRC websites and phishing scams. Please search ‘self assessment’ on GOV.UK to get the correct link for your Self Assessment tax return online securely.

GOVERNMENT BACKED LOANS

The Coronavirus business interruption loan scheme (known as CBILS) and the Bounce Back Loan scheme are due to close to applications on  31^st March . We would advise that if borrowing is required, in particular to help with opening up, then applications should be made now, in case the schemes are not extended in the Budget.

Remember, if you have previously taken a bounce back loan, it can be rolled into a CBILS, as it is not possible to have two separate loans.

VAT DEFERMENT

We have reported previously, that HMRC are enabling an extension of the period to pay the VAT that businesses deferred between 20^th March 2020 and 30^th June 2020, under the Deferred VAT Payment Scheme. Businesses have to opt into the scheme which will allow for the deferred VAT to be paid between 2 to 11 equal monthly instalments by 31^st March 2022. No interest will be added to these deferred payments.

Businesses wishing to use this scheme must:

• be up to date with their VAT returns;
• opt into the scheme before the end of March 2021;
• pay the first instalment before the end of March 2021;
• be able to pay the deferred VAT by Direct Debit.

The application scheme opens on 23^rd February.

If businesses do not opt into the scheme, the deferred VAT will still be due to be paid to HMRC in full by 31^st March 2021.

For more guidance see our Business Forward Support page on our website by clicking on this link.