The government has announced a series of tax cuts and deferrals as part of its Winter Economy Plan. All aimed to reduce pressure on businesses and the self-employed who are financially challenged by the economic hurdles presented by COVID-19. These include a
Temporary 15% Vat cut extension
As part of the government’s Winter Economy Plan, the government is extending the temporary 15% VAT cut for the tourism and hospitality sectors through to the end of March next year. This will give businesses in this sector, so severely impacted by COVID-19, confidence to retain staff as they adapt to a new trading environment.
New VAT Payment Scheme
Up to half a million business who deferred their VAT bills will be given more breathing space through the government’s New Payment Scheme. This gives them the option to pay VAT back in smaller instalments.
Instead of paying a lump sum in full at the end of March next year, they will be able to make 11 smaller interest-free payments spread over the 2021-22 financial year.
Time to Pay
Around 11 million self-assessment taxpayers can take advantage of a separate 12-month extension from HMRC on the “Time to Pay” self-service facility. This means that self-assessment payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
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