The Chancellor yesterday set out a package of temporary measures to support public services, people and businesses through this period of disruption caused by COVID-19.
This includes a package of measures to support businesses including:
- a Coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
All UK businesses are eligible and will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off (furloughed) during this crisis.
HMRC will reimburse 80% of ‘furloughed’ workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
You will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
VAT and Income Tax payments deferral
Valued Added Tax (VAT) payments will be deferred for 3 months and if you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
For VAT, the deferral will apply from 20th March 2020 until 30th June 2020
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
All UK businesses and registered self-employed are eligible and it is an automatic offer with no applications required.
