Accountants Newsletter Jul/Aug 2020

This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The FCA does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. The newsletter represents our understanding of law and HM Revenue & Customs practice. © Copyright 25 August 2017. All rights reserved Tax deferral for self-assessment Postponing a tax payment could be an attractive option if you are having cash flow problems. All taxpayers using self-assessment can defer their second self-assessment payment on account for the tax year 2019/20 as part of the government’s Covid-19 support. You can take advantage of the option to defer the payment, normally due on 31 July 2020, without incurring any interest or penalties, provided you pay it by 31 January 2021. Paying the deferred amount If you choose to defer, and you normally make your payments on account by direct debit, you should ensure you have cancelled the direct debit so that HMRC doesn’t automatically collect the amount due. You can then pay the deferred amount at any time between 31 July 2020 and 31 January 2021, either: • in full using normal payment methods; or • in instalments by setting up a payment plan with HMRC. However, you cannot use this option if you have any other overdue taxes. Although you do not need to make the deferred payment until 31 January 2021, bear in mind the potential snowball effect of not paying it off by that date: 31 January 2021 is also the deadline for paying any 2019/20 balancing amount, plus the first payment on account for 2020/21. If, as a sole trader, you make your accounts up to 31 March or 5 April, then these amounts will be based on profits for the year ended 31 March/5 April 2020, so they will mainly be based on earnings before the Covid-19 pandemic had an impact. Your payments on account for 2020/21 can be reduced to an estimate of the tax and national insurance contributions that will actually be due for this year. However, after including any Covid-19 grants and amounts received under the self-employment income support scheme, these amounts might be more than you expect. Newsletter Tel: 0208 234 5678 l Fax: 0208 234 5678 l l JUL\AUG 2020 » » The Chancellor’s summer of spending » » To the rescue: insolvency law reforms » » CGT disposals reminder » » Employment support update » » VAT reverse charge delayed » » Defining reasonable excuse under Covid-19 » » Is your business a going concern? » » News round up IN THIS ISSUE: Company Name Street name Town name City name AB1 2CD t: 01234 567 890 e: @yourlogohere Personal Regulatory Footer Insolvency law Reforms to help businesses in distress Employment support Update on Covid-19 jobs measures Reasonable excuse Defining valid reasons for tax payment deferral Credit: BrAt82/ Bear in mind the potential snowball effect of not paying taxes off by 31 January 2021 - it is the first 2020/21 payment on account deadline too. © Copyright 14 July 2020