Tax Cuts & Deferred Tax Bills
The Winter Economy Plan provides flexibility overpayment of VAT, personal tax bills and introduced a new Pay-as-you-grow scheme. There will be an enhanced time to pay arrangements for self-assessment tax bills due in January 2021. Taxpayers will be able to use HMRC’s online self-service application process to extend payments over a 12-month period.
1 – VAT
The temporary reduced 5% VAT rate will be extended until 31 March 2021
- As part of the Government’s plan to support businesses this Winter, the Chancellor has announced extensions to the VAT submission dates
- Between 20 March and 30 June 2020, businesses were given the opportunity of deferring their VAT liabilities.
- The Winter Economy Plan includes a new Payment Scheme, which allows the deferred VAT to be spread over 11 instalments.
2 – Self-Assessment Tax
Self-assessment tax is due on 31 January 2021 and can be spread over 12 interest-free payments.
*Please note, unlike the original deferments, instalment plans are not automatic and must be applied for.
3 – Pay-as-you-Grow Scheme
- This new scheme gives more time and flexibility to repay bounce back loans for over a million businesses until the end of November.
- Now, a new pay-as-you-grow scheme will allow businesses to extend the term of the loan from 6 to 10 years, almost halving repayments.
- Businesses facing astute cash flow challenges can opt to repay just the interest or defer payment altogether for up to 6 months.
- A new pay-as-you-grow scheme will allow businesses with bounce back loans to extend the term of the loan from 6 to 10 years, almost halving repayments.
- Interest-only payments can be made, and firms in “real trouble” can suspend their payouts.
More information on Tax Cuts & Deferred Tax Bills can be found here.