Support for Businesses
Details on tax deferment inlcuding Business Rates, VAT and Time to Pay Schemes (TTP)
Business Rates Holiday and Grant (Retail, Hospitality and Leisure)
- No rates charged for 12 months from April 2020.
- Cash grant of up to £25,000 per property depending on the rateable valuable of the property
- Only retail, hospitalityand leisure business are currently eligible.
- Bill changes should be applied automatically depending on your property classification.
There is also some additional relief available for smaller businesses with low or nil rates obligations due to existing reliefs.
The Government has extended the protection for commercial tenants by preventing landlords from forfeiting leases until 31 December 2020. The temporary Commercial Rent Arrears Recovery (“CRAR”) changes have also been extended and will prevent landlords using CRAR to enforce unpaid rent on commercial leases until the end of the year.
While this may not be good news for many commercial landlords, this will be welcome news to many tenants who would have otherwise struggled to pay c. 3 quarters of rent that would have fallen due on 1 October 2020. Many businesses will now rely on a strong final quarter of 2020 to generate sufficient cashflow to ensure they are able to repay all arrears from 1 January 2021.
Restrictions on Stat Demands and Winding Up Petitions
Similar to the forfeiture moratorium, companies have been protected from their creditors issuing stat demands or winding up petitions until 31 December 2020. Companies are only eligible for this relief where the debt is unpaid for reasons relating to the financial impact of Coronavirus.
HMRC have agreed to allow all UK businesses to defer VAT payments due between 20th March to 30th June and they will have until 31 March 2022 to clear these liabilities via smaller, interest free payments.
VAT Emergency Cut
The 15% emergency VAT cut for the tourism and hospitality industries has been extended to 31 March 2021 in an attempt to boost spending in these industries.
Time to Pay Scheme (TTP)
HMRC has indicated that it will accommodate more requests to defer existing tax liabilities over a longer period, which would include PAYE/NI, CIS and Corporation Tax liabilities as well as VAT. The TTP scheme is available to all UK businesses with existing liabilities.
Businesses should be aware that the VAT Deferment Scheme is only available for VAT due in the March 2020 – June 2020 period. If additional support is needed for VAT or other taxes we have helped many clients negotiate time to pay or other arrangements with HMRC or raise the necessary capital, often where they have recently failed themselves.
Moorfields has experience of assisting businesses with their cash flow at times of stress and has successfully negotiated many TTP arrangements with HMRC. If our assistance could be of benefit to your business, please do not hesitate to get in touch with our Advisory team.