COVID-19: Updates to UK Rate Relief, Tax & VAT Payments and Rent

COVID-19: Updates to UK Rate Relief, Tax & VAT Payments and Rent

6
minute read
COVID-19

With the ongoing Coronavirus pandemic, the ability for most businesses to maintain revenue and a sustainable income has become a real challenge.

Businesses are now focusing on finding a way to remain afloat and retain staff even when trading isn't possible, but bills, rents and payments are still a concern. With that in mind, the British government, HMRC and other governing bodies have introduced a number of reliefs and deferrals to assist companies during this unprecedented crisis. Below we talk through these supports and the ways in which businesses can access them.

Disclaimer: Occupop is not a governing body or financial institution, this information has been collated from gov.uk, HMRC and various financial experts as at date of publication and is subject to change. Any information provided here is intended to inform rather than advise.

Updates to rate relief, Tax & VAT payments and rent during COVID-19

There have been a number of delays and rate freezes put in place to alleviate financial pressures to businesses during Coronavirus. We have listed these below:

  • The Business Rate Relief announcements in Budget 2020 have been extended as a result of the coronavirus pandemic. This will mean that the Business Rates Retail Discount will now be available for all businesses occupying retail, leisure and hospitality properties for 2020/21, in most cases reducing the Business Rates bill for 2020/21 to nil. This has subsequently been extended to nurseries due to the current circumstances. This is managed by Local Authorities who will contact you directly. You can estimate your business using this business rates calculator.
  • A Tax payment support service has been established by the HMRC, Time-To-Pay service. This is available to any business or self-employed individuals who have been negatively affected by COVID-19 and are currently unable to pay their tax payment or are concerned about their next payment. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. A dedicated helpline has been established to deal with queries, 0800 024 1222.
  • VAT payments have now been deferred for a 3 month period from 20 March 2020 to 30 June 2020, no interest or penalties will be charged. All VAT-registered UK businesses are eligible. It’s important to note that you should still file your VAT returns as normal during this period, but no payments will need to be made. Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. This is an automated process and there is no need to contact the HMRC regarding this delay, however you should contact your bank to cancel direct debit payments. 

  • Through the U.K. government ‘Coronavirus emergency bill’, Commercial tenants will be protected from eviction for the next 3 months until the 30th June 2020. The government also has the option to extend this period if they wish. The bill states that no commercial tenants can be evicted during this period but notes that this is not a rental holiday and that tenants will still be liable for rent payments once this period is over. This bill applies to England, Wales and Northern Ireland, while the government works with Scotland on a similar bill.
  • Further deferrals that may impact business include; a deferral of the self-assessment payment from 31st July 2020 to January 2021, this is automatic and no actions are required. While the controversial IR35, which were new rules affecting contractors working for the private sector, directly or through an agency, have been delayed by a year until 6th April 2021. Full details on IR35 can be found here. Finally, Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) have suspended the Gender Pay Gap Reporting enforcement for 2019/20. This means that there will be no investigations and potential fines imposed on companies who do not meet gender pay gap reporting deadlines until 2021. 

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Summary Points

There have been a number of delays and rate freezes put in place to alleviate financial pressures to businesses during Coronavirus. We have listed these below:

  • The Business Rate Relief announcements in Budget 2020 have been extended as a result of the coronavirus pandemic. This will mean that the Business Rates Retail Discount will now be available for all businesses occupying retail, leisure and hospitality properties for 2020/21. This has been extended to nurseries.
  • A Tax payment support service has been established by the HMRC, Time-To-Pay service. This is available to any business or self-employed individuals who have been negatively affected by COVID-19 and are currently unable to pay their tax payment or are concerned about their next payment.
  • VAT payments have now been deferred for a 3 month period from 20 March 2020 to 30 June 2020, no interest or penalties will be charged. All VAT-registered UK businesses are eligible.
  • Through the U.K. government ‘Coronavirus emergency bill’, Commercial tenants will be protected from eviction for the next 3 months until the 30th June 2020.
  • A deferral of the self-assessment payment from 31st July 2020 to January 2021, this is automatic and no actions are required.
  • IR35, which were new rules affecting contractors working for the private sector, directly or through an agency, have been delayed by a year until 6th April 2021.
  • Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) have suspended the Gender Pay Gap Reporting enforcement for 2019/20. This means that there will be no investigations and potential fines imposed on companies who do not meet gender pay gap reporting deadlines until 2021. 
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