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The Covid-19 pandemic and lockdown have, of course, put a huge strain on the business sector. Many have been in survival mode and some are facing devastation. However, the time has come for some businesses to start focusing on the future and this is an opportunity to make positive changes.
As part of HMRC’s response to the COVID-19 outbreak a range of business support packages were introduced, including an option for businesses to defer any VAT liabilities due for payment between 20 March and 30 June 2020 until 31 March 2021. This will have covered all VAT registered businesses with period end dates from 29 February 2020 up to 30 April 2020 and additionally, those paying by instalments in this time.
Have you considered the risk of a local lockdown on your leisure or tourism business?
With non-essential shops re-opening and a drop in the number of new cases, there is currently an optimistic view that the worst of Covid-19 has now passed. Policy now seems to be to move towards a limited, socially-distanced re-opening of tourism and leisure businesses at the earliest opportunity.
With so much uncertainty around when we might be able to start to enjoy holidays once again, the tourism sector is facing a difficult summer. We do not yet know whether or not it will be possible to have a break away in the traditional months of July or August. Some tourism experts are predicting a later holiday season in 2020. Could we see more visitors coming down to the South West over the October half term, for example, or booking a stay for Christmas and New Year?
With recent announcements on the gradual phasing out of the furlough scheme and no confirmed date for hotels, holiday parks and restaurants to re-open, should we be prepared for job losses in the tourism and leisure sector?
The Charity Commission has recently released supplemental guidance for trustees to help them decide what constitutes a reportable serious incident during the coronavirus pandemic.
HMRC have announced that the implementation of the VAT Domestic Reverse charge for CIS Construction services is to be postponed for a second time to 1 March 2021.
As we have advised in previous blogs, one of the coronavirus reliefs available to businesses to help cash flows was the ability to defer VAT payments falling due between 20 March and 30 June 2020.
Where the business normally settles its VAT liability via direct debit the advice was to cancel the direct debit. If you have failed to cancel your direct debit and as a result a payment has been collected which you intended to defer you have the following options open to recover the liability paid;
- Submit a Direct Debit Indemnity Claim to your bank to request a refund under the Direct Debit Indemnity Scheme. We understand there is no time limit for making such a claim. We also understand that HMRC have indicated this is likely to be the quickest way of getting a refund.
- Request a repayment direct from HMRC. To do so you should ensure your bank details are update on your online account.
Further details of how any deferred VAT will need to be paid is expected to be released after 1 July 2020 by HMRC, but will need to be paid by 31 March 2021.
We would advise those within MTD and who have cancelled their VAT direct debit to defer payment not to reinstate your direct debit until HMRC have issued further guidance. The reason for this is that under MTD HMRC have the right to collect any arrears and we understand that HMRC have not confirmed that this will not happen automatically.
If you would like to discuss this or any other matters relating to the impact of the coronavirus, please contact me or your usual Thomas Westcott contact.
Some 3.5m individuals, according to HMRC’s records, are potentially eligible to receive support from the government under the Self-Employment Income Support Scheme (“SEISS”), but as of 31 May only 2.3m had actually submitted a claim. That means 35% of potential claimants have not yet made a claim. Why is that? There could be a number of reasons:
As previously announced by the government on 1 May, small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme. Under this scheme, businesses could get a grant of up to £25,000.
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Registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales, details about our audit registration can be viewed at www.auditregister.org.uk, under reference number C001091748, and details of all audit regulations can be accessed at www.icaew.com/regulations. A list of members can be found under Legal Notices. Thomas Westcott has offices in Axminster, Barnstaple, Bideford, Bridgwater, Burnham on Sea, Crediton, Exeter, Holsworthy, Honiton, Ilfracombe, Okehampton, Plymouth, Seaton, Somerton, Tiverton, Torquay and Weston super Mare.
© Thomas Westcott 2020
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