Update from Team Sibbalds 18 February 2021

New VAT Deferral Payment Scheme Opens 23rd February

If you deferred VAT payments due between 20 March and 30 June 2020 and still have payments to make, you can:

• pay the deferred VAT in full, on or before 31 March 2021
• join the VAT deferral new payment scheme – the online service is open between 23 February and 21 June 2021
• contact HMRC on Telephone: 0800 024 1222 by 30 June if you need extra help to pay

The new VAT deferral payment scheme will open from 23 February up to and including 21 June 2021. The new scheme lets you:

• pay your deferred VAT in equal instalments, interest free
• choose the number of instalments, from 2 to 11 (depending on when you join). If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.  If you join in June you’ll be able to pay your deferred VAT in 8 instalments or fewer.

To use the online service, you must:

• join the scheme yourself.  As your agents we cannot do this for you
• still have deferred VAT to pay
• be up to date with your VAT returns
• join by 21 June 2021
• pay the first instalment when you join
• pay your instalments by Direct Debit (if want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)

If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax. Before your join the scheme you must:

• create your own Government Gateway account (if you do not already have one)
• submit any outstanding VAT returns from the last 4 years – otherwise you’ll not be able to join the scheme
• correct errors on your VAT returns as soon as possible
• make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

Please be aware that you may be charged interest of a penalty if you do not:

• pay the deferred VAT in full by 31 March 2021
• opt into the new payment scheme by 21 June 2021
• agree extra help to pay with HMRC by 30 June 2021

 

Construction Industry Domestic Reverse Charge – Are you ready for the changes?

The Construction Industry Scheme VAT Domestic Reverse Charge (CISDRC) is being introduced to reduce VAT fraud in the construction sector.  It applies to business-to-business supplies of construction services where the recipient of the supply intends to make an ongoing supply to another party of construction services.  It comes into force on 1 March 2021.
Where the CISDRC applies:

• the customer will account for the supplier’s output VAT
• a reclaim can be made on the same return if the customer is entitled to recover the VAT
• the supplier does not charge or collect VAT on its sales

The CISDRC will require a significant change of approach in many CIS businesses and due to the affect it will have on cashflow, it may benefit many businesses to file monthly as opposed to quarterly VAT returns.
We are currently preparing a detailed guide which we will be sharing with all affected businesses next week.

 

Grants for Business Impacted by COVID-19

Grant schemes can still be accessed to provide financial support to businesses.  The options are:

• The Local Restrictions Support Grant (LRSG) for Closed Businesses – for businesses that are required to be closed. These grants are being automatically processed and if you received a payment during the November lockdown you do no t need to reapply.
• Additional Restrictions Grant – for businesses who do not meet the criteria for the ‘Local Restrictions Support Grant for Closed Businesses’ but are being severely affected by the impact of COVID-19.
• Christmas Support Payment – for pubs that receive less than 50% of its income from sales of food. The deadline for applications is 28 February 2021.
• One-off grant for self-employed drivers – for licensed hackney carriage and private minicab drivers

Head to your local council website and search for COVID-19 grants to apply online.

 

Self Employed Income Support Scheme

Details about the fourth grant will be announced on 3 March 2021.  We will be sharing this information just as soon as it becomes available.

 

Kickstart Scheme – Now Available to Employers Offering Less Than 30 Placements

The Kickstart Scheme provides funding to create new job placements for 16 to 24 year olds on Universal Credit who are at risk of long term unemployment. Employers of all sizes can apply for funding which covers:

• 100% of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of 6 months
• associated employer National Insurance contributions
• employer minimum automatic enrolment contributions

Employers can spread the start date of the job placements up until the end of December 2021.
To find a scheme relevant to the sector and locality in which you are based you can use the government’s Find a Kickstart gateway service: Welcome – Find a Kickstart gateway – GOV.UK (dwp.gov.uk)

Alternatively you can apply directly for a grant by going to: Apply for a Kickstart Scheme grant – GOV.UK (www.gov.uk)