It’s been a while since anything important has been announced that was worth a blog post, but in the last week a couple of announcements have been made – though not well publicised, so I thought I would do a blog to summarise them. I expect there will be more updates after the budget on March 3rd, 2021.
Bounce Back Loans
Last week the government announced that those who took out bounce back loans will have the option to delay all repayments for a further 6 months. The new option is being called “Pay as you Grow” and allows borrowers the flexibility to tailor their repayment schedule to suit their circumstances. They will also be allowed to extend the length of their loans from 6 to 10 years (therefore reducing the monthly repayments by almost half), make interest-only repayments for 6 months (this option can be used up to 3 times throughout the loan), or even pause repayments for up to 6 months (this option can only be used once). The option to pause repayments has been changed so that it will now be available to everyone from their first repayment, instead of after the first 6 repayments have been made. These new options are in addition to the government paying the interest for the first year of the loan. Lenders should reach out to borrowers to provide information on the repayment schedules and how to access the new flexible repayment options – this should be done 3 months before the first repayment is due. You can read the full news article here: https://www.gov.uk/government/news/chancellor-eases-burden-on-more-than-a-million-businesses-through-pay-as-you-grow-flexible-repayment-options
VAT Deferral Scheme
The new VAT deferral scheme opening date has now been announced. People will be able to join the new scheme between 23/02/2021 and 21/06/2021. The purpose of this scheme is to allow those have already deferred their VAT payments through the earlier deferral scheme, to extend the length of time they have to make that payment. There are 3 options available to those businesses who have deferred their VAT payments:
1) Pay the deferred VAT in full by 31/03/2021;
2) Joint the new payment scheme before 21/06/2021; or
3) agree extra help to pay HMRC by 30/06/2021.
If one of the options isn’t taking, interest or penalties may be charged on the deferred VAT that is owed. Anyone who is on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme will be invited to join the new payment scheme later in March 2021.
Businesses will be able to use the online services to join the new deferral scheme. However, there are certain eligibility criteria that must be followed:
– you must join the scheme yourself; your agent or accountant cannot do this for you
– you must still have deferred VAT to pay
– you must be up to date with the rest of your VAT returns
– you must join by 21/06/2021
– you must pay the first instalment due on the deferred VAT when you join
– you must pay instalments by direct debit
You will still be able to have a Time to Pay agreement for other HMRC debts and outstanding tax, even if you join this scheme.
The number of instalments you will pay will depend on the date that you join the scheme. You can read the full article published by the Government which goes into further details about the new VAT deferral scheme here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
I am continually monitoring the updates that the government and other business-related departments release and will continue to share that information for as long as I feel that it is beneficial to all businesses in the UK.
The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.
Northern Ireland: https://www.nibusinessinfo.co.uk/
I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/