In order to support businesses and allow them to function without disruption during the pandemic, the government has made several UK tax changes that will benefit businesses in the coming months.

Many of these changes may be applicable to your business, which is why it is best that you study the changes in UK tax and support provided to businesses with boutique consulting firms. They will be able to give you legal advice and ensure you benefit from the support provided by the government.

VAT

In March, it was announced that temporary changes to VAT payments between 20 March and 30 June were made in order to help businesses manage their cash flows. An update by the HM Revenue and Customs (HMRC) states that a UK VAT registered business with VAT payments due during the period mentioned above can defer the payment until a later date.

The deferral does not cover payments for VAT MOSS or import VAT, but you can defer payment of your quarterly and monthly VAT returns ending in February, March, and April, payment on account due between 20 March and 30 June, and annual accounting advance due between 20 March and 30 June.

Relaxation of rules

If you run a business, your tax lawyer may have given you a detailed explanation of all the different rules and regulations you are required to adhere to. Given the impact of COVID-19 on businesses, the UK government has relaxed several rules, making it easier for businesses to work through the pandemic without disruption.

Since the relaxation of rules covers different sectors and may have various conditions that need to be met, it is best to consult with a tax solicitor or get legal advice UK from an organization like LegalLiaise.

However, some of the rules related to payments and rates include the postponement of business rate revaluation, which will not take place in 2021. A three-month extension from Companies House has also been granted for filing accounts and annual statements and the deadline for gender pay gap reporting has been suspended for a year.

Taxable expenses

The government has also provided information on equipment, services, and supplies that are taxable if employees are working from home due to the pandemic.

Mobile phones and SIM cards provided to an employee without a restriction on private use and is limited to one per employee, laptops, tablets, computers and office supplies used mainly for business purposes and not significant personal use, and a salary advance or loan to help employees below the value of £10,000 in a tax year are non-taxable.

If a broadband connection is needed to work from home but is not already available, the broadband fee will be reimbursed and will not be taxable. However, the broadband connection must be provided for business and any private use must be limited.

Any office equipment purchased for the employee will be non-taxable if there is no significant private use. If, however, the employee is not reimbursed, they may be able to claim tax relief. Additional expenses like electricity, heating, or broadband are not taxable if it is a payment or reimbursement to the employee of up to £6 a week.

An employer can also pay approved mileage allowance payments of 45p per mile up to 10,000 miles and 25p per mile thereafter. This will not be taxable. If the employer does not have such an allowance, the employee can claim tax relief through their Personal Tax Account.

If an employee needs to self-isolate but cannot do so in their own home, the employer can reimburse hotel expenses and subsistence costs. However, these are taxable.

Support during the pandemic

The government is offering various types of support to businesses as well as those who are self-employed during the COVID-19 pandemic and you can benefit from these by studying the various grants as well as the criteria you must meet. The Self-Employment Income Support Scheme and the Coronavirus Job Retention Scheme are two such programmes and a tax lawyer at LegalAllianz can provide useful legal advice UK on these grants.

Published date - June 26, 2020