Delay to MTD for Self-Assessment announced

March 1, 2023

HMRC has announced a postponement to MTD for ITSA until 2026

After much anticipation, HMRC recently announced a delay to the introduction of MTD for Income Tax Self-Assessment (MTD for ITSA). HMRC announced the delay for a further two years, with an anticipated start date of April 2026. 

Aside from the delay, HMRC also announced a new staggered approach whereas previously all sole traders and landlords with a turnover of more than £10,000 were required to record keep digitally and submit quarterly summaries of income and expenditure to HMRC. The main requirement was to submit quarterly via compliant software from April 2024. 

However, with the implementation now due to take place from April 2026, HMRC also announced a phased implementation: 

  1. From April 2026, all self employed and landlords with income over £50,000 will be mandated to join the MTD for ITSA scheme first.
  2. From April 2027, all with income over £30,000 will be mandated to join MTD for ITSA 

HMRC also announced that the MTD for ITSA requirements for Partnerships have been postponed until further notice. 

The changes come as the UK government understand the challenges facing businesses and self-employed individuals and therefore realise that the transition to MTD for ITSA is a significant change for all parties involved, meaning more time is required to ensure a smoother transition. 

So, what does this mean for you? 

We would still encourage you to implement digital accounting software now to allow for real time reporting and allow you to make more informed business decisions. Having access to your records digitally will allow you to have a full picture of how your business is performing and where efficiencies could be made. Digital accounting software is cost effective and will allow you to be familiar with the software ahead of the scheduled implementation of MTD for ITSA. Not only this, but the software can be accessed remotely, meaning our team can assist you in setting up the software and provide you with training so that you are familiar with how to use the software ahead of the new changes. 

If you would like to explore the options available to you, please contact us and we can help you with the next steps. 

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Autumn Budget 2021 – key points

October 29, 2021

On 27 October, the Chancellor set out his plan for government tax and spending for the year ahead in his Autumn Budget 2021

The forecast for the UK economy is one of strong growth that takes the country back to pre-covid levels by 2022 but that inflation is set to rise to 4% next year.  Below is a summary of the key points from the Statement:

Public Finance and State of the Economy 

  • According to Office for Budget Responsibility (OBR), Inflation is due to rise to an average of 4% next year 
  • UK economy forecast to return to pre-Covid levels by 2022 
  • Annual growth set to rebound by 6.5% this year, followed by 6% in 2022 
  • Unemployment expected to peak at 5.2% next year, lower than 11.9% previously predicted 
  • Wages have grown in real terms by 3.4% since February 2020 
  • Borrowing as a percentage of GDP is forecast to fall from 7.9% this year to 3.3% next year 
  • Borrowing as a percentage of GDP will then fall in the following four years to 1.5% 
  • UK Government projects Foreign aid spending to return to 0.7% of GDP by 2024-25 

Government Spending 

  • Funding will rise by an average of £4.6bn for Scottish Government, £2.5bn for Welsh Government, and £1.6bn for Northern Ireland Executive 
  • Levelling Up Fund will mean £1.7bn invested in local areas across the UK 
  • Government backing projects in Aberdeen, Bury, Burnley, Lewes, Clwyd South, Stoke-on-Trent, Ashton under Lyne, Doncaster, South Leicester, Sunderland and West Leeds 
  • Extra £2.2bn for courts, prisons and probation services, including funding to clear the courts backlog 
  • Tax relief for museums and galleries will be extended for two years, to March 2024 which means tax credits doubling for the Creative Industry 
  • Core science funding to rise to £5.9bn a year by 2024-25 
  • £6bn of funding to help tackle NHS backlogs 

Taxation and Wages 

  • Universal Credit taper rate will be cut by 8% no later than 1 December, bringing it down from 63% to 55% – allowing claimants to keep more of the payment 
  • Confirmation business rates to be retained and reformed 
  • A 50% business rates discount for the retail, hospitality, and leisure sectors in England in 2022-23, up to a maximum of £110,000 
  • Planned rise in fuel duty to be cancelled amid the highest pump prices in eight years 
  • Consultation on an online sales tax 
  • National Living Wage to increase next year by 6.6%, to £9.50 an hour 

Children and Education 

  • Schools to get an extra £4.7bn by 2024-25 
  • There will be nearly £2bn of new funding to help schools and colleges to recover from the pandemic 
  • Schools funding to return to 2010 levels in real terms – an equivalent per pupil cash increase of more than £1,500 
  • £300m will be spent on a “Start for Life” parenting programmes, with an additional £170m by 2024-25 promised for childcare 
  • A UK-wide numeracy programme will be set-up to help improve basic maths skills among adults 

  Air Travel 

  • Flights between airports in the UK nations will be subject to a new lower rate of Air Passenger Duty from April 2023 
  • Financial support for English airports to be extended for a further six months 
  • From April 2023, new ultra long haul band in Air Passenger Duty for flights of over 5,500 miles introduced 

Alcohol 

  • Planned rise in the duty on spirits, wine, cider and beer cancelled 
  • Simplification of alcohol duties will see the number of rates drop from 15 to six 
  • Stronger red wines, fortified wines, and high-strength ciders will see a small increase in their rates 
  • Rates on many lower alcohol drinks including rose wine, fruit ciders, liqueurs, lower strength beers and wines to fall 
  • All sparkling wines to pay same duty as still wines of equivalent strength 
  • Lower duty on draught beer and cider from containers over 40 litres will cut the rate by 5% 

Housing 

  • £24bn earmarked for housing: £11.5bn for up to 180,000 affordable homes, with brownfield sites targeted for development 
  • 4% levy will be placed on property developers with profits over £25m rate to help create a £5bn fund to remove unsafe cladding 
  • £640m a year to address rough sleeping and homelessness 

 

If you would like to discuss any of the points above, please contact us. 

 

 

 

 

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Making Tax Digital

March 22, 2021

From 1 April, VAT registered organisations will face further obligations from HMRC’s drive towards Making Tax Digital

Making Tax Digital – What happens next? 

For many years HMRC have had high ambitions of becoming the world’s ‘most digitally advanced tax administration’ and in doing so they are shaking up the way in which individuals and businesses record their tax affairs. By implementing the Making Tax Digital (MTD) scheme, HMRC plan on initially mandating digital record keeping to reduce the UK tax gap, which lies at c.£31 billion of which £9 billion is attributable to ‘errors and failure to take reasonable care’. So where are we now and what happens next? 

Well, since April 2019 most UK VAT Registered businesses with taxable turnover above the VAT threshold of £85,000 were mandated to maintain digital VAT records. This also meant they were required to submit their VAT returns using Making Tax Digital (MTD) compatible software. For businesses to ensure they could apply these new processes, HMRC implemented a one-year soft landing period, which was later extended a further year, due to the COVID-19 pandemic. 

However, from 1 April 2021, UK VAT registered businesses will face further MTD obligations which were initially meant to be implemented from April 2020 but also delayed due to the COVID-19 pandemic. These new obligations centre around the requirement for a ‘digital link’. According to HMRC this essentially means there is a need ‘to use a compatible software package or other software that connect to HMRC systems’. 

Regardless of your current situation, from 1 April 2022 all UK VAT registered businesses must sign up to be MTD registered, regardless of whether they have exceeded the VAT threshold. So, are you prepared? If not, why not make the move to using MTD compliant software in advance of the new changes? 

How will this affect my business? 

If you have not already done so, you will be required to keep your VAT records in digital form. We recommend using cloud accounting software that is MTD compliant, such as Xero. In doing so you will be adhering to HMRC’s policies by utilising a ‘digital link’. 

What is a digital link? 

For example, if you use multiple software packages to keep records or submit VAT returns you will need to essentially link them, without any manual input. The most common example for businesses is the use of spreadsheets where figures are then copied and pasted into another system for the VAT return to be submitted – this is will no longer be allowed. 

HMRC confirmed ways in which you could link software:  

  • using formulae to link cells in spreadsheet’s 
  • emailing records 
  • putting records on a portable device to give to your agent 
  • importing and exporting XML and CSV files 
  • downloading and uploading files 

There are however some exceptions to the above obligations. HMRC has granted exemptions for manual calculations for VAT schemes such as partial exemption, flat rate or the capital goods scheme. The digital links between the software packages used, need to be in place before the business’s first VAT period after the 1st of April 2021. 

What if I can’t implement the ‘digital link’ in time for April 2021? 

HMRC has offered an option for businesses to apply for an extension to the 1 April 2021 deadline if it can be proven that there is no reasonable fix to their legacy systems. The extension would involve notifying HMRC as soon as possible and providing a comprehensive plan to resolve the issues. We would advise you contact HMRC as soon as possible if you require extension. 

How can we help 

We have been assisting clients for some time now to ensure they are using MTD compliant software. As well as adhering to HMRC MTD rules, businesses have benefitted from the additional benefits of using Cloud Accounting software such as Xero. MTD for VAT was the first of many areas which HMRC will target, there are already plans for digitising Income Tax in 2023 and Corporation Tax in 2026.  

So, are you confident you are using the right software? You may not be VAT registered, but knowing HMRC’s plan for the years ahead, we would encourage you to review your financial systems at this stage and plan ahead. Why not get in touch and let us help ensure you are ready for the changes ahead. We have a range of Cloud Consultancy services which can help ensure your business in not only MTD ready but ensure accessibility robust real time financial data. 

Please contact us to learn more. 

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2021 Budget

March 4, 2021

The Chancellor announced a range of measures in his 2021 Budget on 3 March 2021 with upcoming changes to corporation tax a key feature.

The Chancellor has pledged to do ‘whatever it takes’ during the pandemic to support business and key announcements in the 2021 Budget, delivered on 3 March 2021, were as follows:

An extension to the furlough scheme until the end of September 2021;

An extension to the SEISS scheme to support the self-employed;

The reduced 5% VAT rate for the hospitality sector will remain in place until September 2021 with a transition rate of 12.5% from then until March 2022;

Corporation Tax rates will rise to 25% from April 2023, though a Small Profits Rate of 19% will be retained for companies reporting smaller profits;

A super-deduction, available from 1 April 2021 to 31 March 2023, for tax purposes of 130% on qualifying capital expenditure;

The Personal Allowance threshold will be frozen for five years once it increases in April 2021.

For further details, please click below to read our 2021 Budget Summary:

2021 Budget Summary

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VAT Payment Deferral Options

February 23, 2021

VAT payments that were deferred from last year can be spread over the next 11 months.

COVID-19 – VAT payment deferral options 

It has almost been one year since the UK Government announced that certain VAT payments could be deferred to support businesses during the COVID -19 pandemic. The VAT deferral was available to all UK VAT registered businesses with payments due between 20 March 2020 and 30 June 2020, except for the VAT MOSS payments. In addition to this announcement, HMRC stated they would not charge any interest or penalties, but instead requested all VAT returns during this period be filed as normal with all filing deadlines still fully applicable. As the VAT payment deferral was automatic with no application or notification required to HMRC, we outline below the options currently available to you.

When do I need to pay my deferred VAT payment? 

Initially, when the deferral was announced, businesses were given a deadline of 31 March 2021 to pay any VAT liabilities. However, a further announcement was made on 24 September 2020 in the Chancellor’s Winter Economy Plan, stating that instead of a hard deadline of 31 March 2021, businesses will also have the choice of making up to eleven equal instalments via the VAT deferral new payment scheme.  

What are my payment options? 

If you have deferred VAT payments due between 20 March 2020 and 30 June 2020 and have yet to make the payment, you can choose from the following to avoid any interest or penalties being charged: 

  • Pay the deferred VAT in full on or before 31 March 2021.  
  • Join the VAT deferral new payment scheme via the online service within your Government Gateway account which opens between 23 February 2021 and 21 June 2021 
  • Speak to HMRC by 30 June 2021 if you need extra help to pay. 

How do I join the VAT deferral new payment scheme? 

The VAT deferral new payment scheme will commence via an online service within your Government Gateway account from 23 February 2021 to 21 June 2021 and will allow you to pay your deferred VAT in equal instalments, interest–free. You have the option to choose the number of instalments you wish to pay, depending on when you join the scheme.  

The number of instalments available to you is determined by the month in which you join the scheme. As the scheme is available to join until 21 June 2021, this is the last date you can join to qualify for paying in instalments, with all instalments needing paid by the end of March 2022. 

The table below extracted from HMRC guidance, outlines the cut–off dates for joining the scheme as well as the maximum number of instalments available, including the first payment. 

If you join by:  Number of instalments available to you: 
19 March 2021  11 
21 April 2021  10 
19 May 2021  9 
21 June 2021  8 

Monthly joining deadline (HMRC 2021) 

 

Please note that if you are on the VAT Annual Accounting Scheme or the VAT Payment on Account scheme you will not be able to join from 23 February 2021, instead, you will be invited to join towards the end of March 2021. 

Can anyone join the VAT payment new deferral scheme? 

To use the online service, you must join the scheme yourself, your agent cannot complete this for you. You must also meet the following criteria: 

  • Have deferred VAT to pay 
  • Pay your first instalment when you join 
  • Ensure all of your VAT returns have been submitted from the past 4 years 
  • Pay by direct debit but if this is not possible speak to an advisor on the COVID-19 helpline on 0800 024 1222 
  • Have access to your own Government Gateway account to join the scheme 
  • Know exactly how much you owe HMRC  

If any businesses would like to join the new payment scheme but do not have access to a UK bank account, are unable to pay by direct debit, or have dual signatories on their bank account, we would encourage you to contact the COVID-19 helpline on 0800 024 1222. 

For further information please see HMRC’s guidance here 

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Furlough Scheme extended to March 2020, SEISS support increased

November 5, 2020

Government agrees to extend furlough to March

Key Points from the surprise announcement today:

  • The Job Retention Scheme has been extended to 31 March 2021
  • Employees made redundant after 23 September 2020 can be re-employed and furloughed.
  • Usual Wage calculated by reference to salary at 30 October 2020 but only for newly employed employees.
  • The Job Support Scheme is postponed.
  • The Job Retention Bonus (due to be paid in February 2021) has been cancelled.
  • Self Employed Income Support Scheme (SEISS) 3rd grant increased to 80% of trading profits for 3 months.

The furlough scheme (or Job Retention Scheme) has now been extended to the end of March 2021, it was announced at lunchtime today (5 November), and will apply throughout the UK.    The scheme will pay up to 80% of an employee’s wages up to a cap of £2,500 a month.  The extension of the scheme into November was confirmed last Friday,  but this extends the scheme for a further four months and at the same rates and conditions.  The Government will issue full guidance on 10 November.

https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme

As noted when the extension into November was confirmed last week, the furlough scheme will operate in a similar way to the JRS in August 2020 (ie, employer can claim for 80% of usual wages for hours not worked but must contribute fully towards employer’s national insurance and employer’s pension contributions).

The Government has also confirmed that anyone made  redundant after 23 September 2020 (when the replacement Job Support Scheme was first announced) could be re-hired, at the employer’s discretion, and be furloughed.  This was a similar situation to what happened when the JRS was originally announced back in March.

The guidance states that the basis of the claim (the ‘usual wages’) for employees that were employed on or before 19 March 2020 remains their pay at that date.   For new employees hired between 20 March and 30 October , the calculations of their furlough rate will be based on thei pay period immediately prior to 30 October or, for staff on variable hours, average earnings from start of employment to start date of furlough.

The government has also confirmed that the Job Support Scheme has been further postponed and that the Job Retention Bonus (JRB) will now not be paid in February 2021 and has been cancelled.

The Self-Employed Income Support Scheme (SEISS) will also be increased and the claim for November 2020 to January 2021 will now cover 80% of prior average trading profits.  This level of support is similar to the first grant claim that was claimable in June 2020.  This had been increased last Friday to cover the equivalent of 55% of three months trading profits but, in line with the extension of the furlough scheme, this has now increased to a full 80%.   This is expected to be claimable from early December.

 

 

Alexander Sloan

 

 

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Furlough extended to November

October 31, 2020

Job Retention Scheme will be extended for another month

The announcement by the Prime Minister yesterday evening (31 October) of a second lockdown in England contained confirmation that the Coronavirus Job Retention Scheme (CJRS) (the ‘furlough scheme’) would be extended until 30 November.

What this means is that the commencement of the Job Support Scheme, due to start 1 November, has been delayed until the CJRS ends.    The UK Government has confirmed that the Furlough scheme extension will apply to all UK nations,  so whether your Scottish business is legally required to close or whether your staff are able to work at least 20% of their usual hours is not relevant for November.

https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced

Key Features of CJRS Extended:

 Employees eligible to 80% of usual wages up to a maximum of £2,500 per month;

  • The Government will cover 80% of the usual wages  (in September this had reduced to 70%, October to 60%);
  • The employer must pay employer’s national insurance and pension contributions, these are not claimable;
  • Flexible furlough will be allowed as well as full furlough;
  • Employers can top up employee wages if they wish.
  • Employee must have been on the payroll on 30 October 2020

The rules seem similar to those that were in place for August 2020 with the one key difference being that the employee could have been on the payroll at 30 October (not just on 19 March).  There is no mention in the (currently limited) guidance that the employee need to have been previously furloughed (a key condition for being flexibly furloughed before).   The methodology of calculating hours and wages will remain the same but it’s not yet clear whether usual wage is now based on that at 30 October and not February 2020.  Further detail will be issued shortly by HMRC.

In summary, the Furlough Scheme is being extended for another month and the JSS Open / JSS Closed schemes are not starting until at least December.  This change in Government support may impact on decisions on whether to keep open or temporarily close parts of your business.

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Working from Home Allowance and JSS changes

October 23, 2020

Staff can claim a tax free allowance for home working

Working from Home Allowance

 Staff that are working from home may be able to make a tax relief claim. From 6th April 2020 they can claim £6 per week without having provide any evidence of costs incurred. Alternatively, the employee can claim the exact amount of costs incurred in working from home. This would include additional  costs such as heating, new broadband connection and business calls, but not costs that would have been incurred irrespective of whether the employee was working from home, for example rent or mortgage interest.  Staff may also be able to claim relief for equipment or furniture they have purchased for home working.

The following conditions apply:

  • The staff member must not be working from home through choice
  • The employer can’t have already compensated the staff member for any costs they are incurring by working from home.

Job Support Scheme Changes

The UK Government has updated its plan for jobs to increase support for business in the winter period.

The Job Support Scheme will come into effect on 1 November 2020 and will replace the initial Furlough scheme. The government has made the following changes to its initial proposals:

  • The minimum hours required for employees to work has dropped from 33% to 20% and
  • the employer contribution for non-worked hours has dropped from 1/3 to 5%.

The Government will pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer contributing 5% of non-worked hours up to a cap of £125 per month. These caps are based on a monthly reference salary of £3,125. This will ensure employees earn a minimum of at least 73% of their normal wages, where their usual wages do not exceed the reference salary. The employee will have to work a minimum of 20% of their normal hours.

 To give an example of the impact of these changes. An employee is normally paid £1200 per month (ignoring tax / NIC for simplicity):

Initial Proposal

Hours Worked Employer Pays(Gross) Government Pays Employee Receives (Gross) Percentage of Normal Pay employee receives
33% (400+267)=667 267 934 77.8%
50% (600+200) =800 200 1000 83.3%
75% (900+100)=1000 100 1100 91.6%

This has now been changed to:

Hours Worked Employer Pays(Gross) Government Pays Employee Receives (Gross) Percentage of Normal Pay employee receives
20% (240+48)=288 592 880 73.3%
33% (400+40)=440 493 933 77.8%
50% (600+30) =630 370 1000 83.3%
75% (900+15)=915 185 1100 91.6%

There is no change in the amount received by the employee, but the employer’s contribution is substantially reduced.

Full details can be found at:

 https://www.gov.uk/government/news/plan-for-jobs-chancellor-increases-financial-support-for-businesses-and-workers

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Job Support Scheme – Expansion

October 10, 2020

The government’s replacement for furlough – Job Support Scheme – has been expanded

The Government announced today (9 October 2020) an expansion to the Job Support Scheme, which was itself only announced two weeks ago.

UPDATE – the Job Support Scheme has been postponed and is NOT available until at least April 2021

The Job Support Scheme, which will commence on 1 November, is open to employers who will be able to claim a grant from HMRC in respect of their employees who are working reduced hours, though a key condition is that the employee works at least 33% of their usual hours.   Following recent announcements in Scotland and parts of England and in anticipation of more businesses being forced to close due to government restrictions, the Chancellor today announced an expansion of the Job Support Scheme specifically for these businesses.   According to the initial information, this Expansion applies only to businesses legally required to close as a result of coronavirus restrictions.

The JSS Expansion will also start from 1 November and run for six months, though a review will take place in January.  This means that those businesses temporarily shutting from this evening will remain eligible only for the Job Retention Scheme (the ‘furlough’ scheme), and of course be bound by the rules specific to that scheme.  Namely, that eligible employees will have to be have been furloughed previously and that the employee had to have been on the payroll on or before 19 March 2020.

With the new JSS and JSS Expansion, eligibility will be based on the employee being on the payroll as at 23 September 2020 and that employee need not have been previously furlioughed.

Under the JSS Expansion – so for those businesses legally forced to close due to coronavirus restrictions –  employees may receive up to 2/3rd of their usual wages up to a maximum of £2,100 per month.    Employers are responsible for paying the employees but can then reclaim this via a grant from HMRC from early December.    There is no obligation on employers to make additional top-up payments, though all employer’s national insurance contributions and employer’s pension contributions must be covered by the employer and will not be reimbursed by HMRC.

There is currently no official Government web page giving specific details of the Expansion but this will be forthcoming in the next few days, but a search for ‘Job Support Scheme’ on HMRC’s website will show updates when they appear.

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Winter Economy Plan Support for Jobs and Businesses

September 24, 2020

Chancellor announces support for businesses during winter

The Chancellor, Rishi Sunak, announced his Winter Economy Plan to support businesses and jobs on 24 September 2020.

UPDATE: THE GOVERNMENT’S ANNOUCEMENTS ON 22 OCTOBER 2020 HAVE MADE CHANGES TO THIS SCHEME. PLEASE SEE OUR LATEST NEWS FOR MORE INFORMATION 

Job Support Scheme

The new Job Support Scheme will begin on 1 November and replace the “furlough” scheme.  To be eligible for the scheme employees must work a minimum of 33% of their hours. The government and the employer will then each pay a 1/3rd of the hours not worked. So an employee working 33% of their hours would receive 77% of their pay with the government contributing 22% of their pay and their employer the remaining 55%.

It should be noted that 22% is the maximum amount that the government will pay and the percentage will depend on the percentage of an employees hours that are worked.  For example if the employee works 50% of their hours then the level of government support is reduced to only 17%.  The level of Government contribution is capped at £697.92 a month.

It should also be noted that the Government contribution will also not cover class 1 employer’s national insurance or employer’s pension contribution but these amounts will continue to be payable by the employer.

Employees will be able to “cycle on and off” the scheme and they do not need to work the same pattern each month. Any short time working arrangement, however, must cover a period of at least 7 days.

The new scheme will run for 6 months but the government have said that they will review in 3 months time the threshold of 33% of hours. The grants like the “furlough” grants will be paid in arrears.

There are a number of criteria to the scheme. To be eligible for the scheme, employers must have a UK bank account and operate a UK PAYE scheme. Larger businesses will also need to meet a financial assessment test. The scheme is designed for viable jobs and therefore employees can not be made redundant or put on redundancy notice during the period within which the employer is claiming the grant for that employee.

Similar to the furlough scheme, employers using this scheme should agree short-time working arrangements with staff, make any contract changes by agreement and notify the employee in writing. HMRC have said that they will carry out checks on claims and agreements with staff will require to be available to HMRC on request.

 

Self Employed

To assist the self employed, the Self Employment Income Support Scheme Grant (SEISS) will also be extended for 6 months. A grant will be payable, in arrears, for the period 1 November 2020 to 31 January 2021 for those currently eligible for SEISS and who are continuing to trade but face reduced demand due to Covid-19.

This grant will cover 20% of the average monthly profits of the individual but will be capped at £1,875. There will be a second grant for the period February to April but the level of this grant still has to be announced. As with the previous scheme, the grants will be subject to tax and national insurance.

Self assessed taxpayers will also be given more time to pay, with deferred payments from July 2020 and those due in January 2021, not now being due until January 2022.

Loans

The Chancellor announced that he will be extending applications for the Government’s Coronavirus Business Interruption Loan scheme, the Coronavirus Large Business Interruption Loan scheme, the Bounce Back Loan scheme and the Future Fund.

Sunak also announced a “pay as you grow” scheme for business which will allow them to extend their bounce back loans from 6 to 10 years. The extension should significantly cut loan repayments and help cashflow. There will also be interest only periods of up to 6 months and payment holiday measures available for these loans.

The Government guarantee on Coronavirus Business Interruption Loans will also be extended to 10 years. There will also be a new successor loan guarantee programme to be announced in January 2021.

VAT

The temporary cut in VAT to 5% for the tourism and hospitality sectors will now remain in place until 31 March 2021. There will also be  a new scheme to allow businesses who deferred their VAT bills until March 2021 to make 11 smaller interest free payments during 2021/22 instead of having to make the full payment in March.

Further Information

More details can be found at https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan but it should be noted that there are still further details to be announced.

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