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Winter economic plan

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The UK government has cancelled the Autumn 2020 Budget, freeing the Treasury up to deal with the immediate economic fallout from the coronavirus crisis. The chancellor’s winter economy plan includes the following principal announcements:

  • Self-assessment enhanced time to pay: Self-assessment taxpayers will be able to access time to pay in relation to their tax payment that falls due on 31 January 2021. Taxpayers with up to £30,000 of self-assessment liabilities will be able to use HMRC’s self-service time to pay facility, in order to agree a plan to spread their payment over 12 months. This means that self-assessment liabilities due in July 2020 will not need to be paid in full until 31 January 2022. Taxpayers not able to pay their tax bill on time, including those who are not able to use the online service, can continue to use HMRC’s time to pay self-assessment helpline to agree a payment plan.
  • VAT deferral ‘new payment scheme’: Businesses which deferred VAT due in the period March–June 2020 will be able to spread their payments over the financial year 2021–22 in 11 equal instalments. All businesses which took advantage of the VAT deferral can use the new payment scheme, although they will need to opt in (HMRC expects to set up the opt-in process in ‘early 2021’).
  • VAT reduced rate for hospitality and tourism: The temporary 5% reduced rate is extended to 31 March 2021.
  • Self-employment income support scheme: The scheme will be extended for six months in total and will be available to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. A first lump-sum payment will cover the three months from November to the end of January 2021 and will be worth 20% of average monthly profits up to a total of £1,875. A second grant will be available for the period from February to April 2021; the government is to set the level of the second grant in due course.
  • Job Support Scheme: with the coronavirus job retention scheme (CJRS) ending on 31 October 2020, the Chancellor announced its successor – the job support scheme – which is designed to protect ‘viable jobs’ in businesses which are facing lower demand over the winter months due to coronavirus. Under the scheme, the employer will continue to pay its employee for time worked, with part of the payment for hours not worked being split between the employer and the government in the form of a grant. The scheme will run for six months from 1 November 2020.
  • Business loan schemes: Ihe following temporary business loan schemes are extended to cover new applications up to 30 November 2020: bounce back loan scheme (BBLS); coronavirus business interruption loan scheme (CBILS); coronavirus large business interruption loan scheme (CLBILS); and future fund. The government will also give businesses which borrowed under BBLS and CBILS greater flexibility, including up to ten years to repay the loans.
Issue: 1503
Categories: News