Covid 19: Winter is coming…

Rishi Sunak, the Chancellor, announced his Winter Economy Plan yesterday which included details of the new Job Support Scheme. The plan also contained other measures including;

• VAT deferral ‘New Payment Scheme’ which will give businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-22. All businesses who deferred their VAT during the initial deferment period will be able to use the payment scheme as opposed to the VAT payments being due in full at the end of March 2021.  Government will be putting in place an opt-in process in early 2021
• The temporary VAT reduced rate for hospitality and tourism will be extended from 12 January 2021 to 31 March 2021
• Access to the variety of finance schemes previously announced will be extended to 30 November for new applications, this includes the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS)
• There will be enhanced time to pay arrangements for Self-Assessment taxpayers. Taxpayers with up to £30,000 of Self-Assessment liabilities due in July 2020 will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months which means tax liabilities which were due in July 2020 will not need to be paid in full until January 2022

Aspire Comment

This is likely to be a huge relief for businesses who are still suffering as a result of the pandemic and with the announcement that restrictions could be in place for up to a further six months, many businesses will be able to protect their businesses with the additional time.

The pandemic has had global effect on business and trade and so many will struggle to recover.  For some businesses, without a dramatic increase in turnover, the new measures are simply delaying the inevitable.