Deferring your VAT liability payment
Following the government’s announcement to defer the payment of VAT liabilities from 20 March to 30 June 2020, we have received a number of enquiries as to how this deferral works in practice.
VAT payers on Direct Debits (DDs) must stop them in their Gateway login account or cancel their VAT DDs with their banks; if you do not do this, the VAT will be collected by HMRC as normal on the usual dates as HMRC will not automatically adjust the DDs.
Coronavirus Job Retention Scheme
We have received a number of enquiries from clients about how this scheme operates in practice. We do not have the answers at the moment but we understand that HMRC are having to build their systems from scratch to deal with the scheme; they are working night and day to get the scheme up and running and they expect the first grants to be paid within weeks. We will give you updates as soon as we know.
We draw your attention to the need to designate affected employees as ‘furloughed workers’ and notify your employees of the change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. We suggest that you contact an employment lawyer for advice on the legal position before designating the employees.
In addition, please note that the government will retain the right to retrospectively audit all aspects of the scheme with scope to claw back fraudulent or erroneous claims. We will be happy to help you through this process.
Support for the self employed
A package of measures to help self-employed workers during the coronavirus lockdown will be unveiled by the chancellor on Thursday.
Currently, a self-employed person could be entitled to a combination of Universal Credit, new style Employment and Support Allowance, Local Housing Allowance, Child Benefits to see them through the next few months depending on their circumstances.
The minimum income floor has now been removed which means benefits will no longer assume that you earn a minimum amount and will take into account your actual earnings – meaning it will properly catch those who have seen their income fall to nothing.
In addition the following measures already introduced by the government should help reduce the fixed outgoings of self-employed people.
- Rent deferral
- Mortgage deferral
- Energy Bill deferral
- Tax Bill deferral
- Business VAT deferral
- IR35 deferral
Companies House – filing extension
Businesses will be able to apply for a 3-month extension for filing their accounts from today.
As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system at:
- the company number
- an email address
- information about your extension reasons
- any documents that support your application (optional)
The Pensions Regulator has advised Trustees of both defined benefit (DB) and defined contribution (DC) schemes, employers and administrators to focus their activities on the key risks to pension savers:
- benefits need to be paid
- the risk of scams needs to be minimised
- employers need to continue contributing
- savers need support to make good decisions in these challenging circumstances
- some administrative breaches of the law may occur and we will maintain a proportionate and fair approach to any action we may take
Pension administrators are also advised to prioritise payments of benefits, retirement processing and bereavement services, as well as any administrative functions required to support these. They are also advised to focus on the processes needed to ensure accurate benefits (e.g. investment of contributions).
Please contact The Pensions Regulator if you believe you will be unable to pay members’ benefits. Please report everything else to The Pensions Regulator as normal and they have indicated that they will take a pragmatic approach in their response.
The Charities SORP-making body has issued a COVID-19 related advice; the SORP-making body’s advice makes suggestions regarding the trustees’ annual report, looks at the implications for going concern and sets out some suggested solutions where the going concern basis of accounts preparation may not be appropriate. Detailed guidance is available from https://www.charitysorp.org/media/648486/sorp-covid-19.pdf.
Also, the Charity Commission has assured charities that their approach to regulation during this period will be as flexible and supportive as possible. They encourage charities to prioritise looking after the public and the communities that they serve. Charities can feel confident that the Charity Commission will, where possible, act in a pragmatic way by taking account of the wider public interest during this unprecedented period.
Any charity that needs an extension to their annual return deadline can contact the Charity Commission to ask for one.