We'll keep this dedicated section updated with guidance on Corporate Tax matters affecting your business.
Navigate to the section of most help to you at this time by clicking on the quick links below:
Key areas:
- Concerns about paying your tax bill
- Business rates relief
- JC clients - how we'll work with you now
- JC clients - your corporate tax return, what you need to do
- JC clients - quarterly instalment payments
- Tax compliance deadlines to note
- Cash flow - what you should bear in mind now
Your JC team and what we need our clients to do
Due to the ongoing situation with coronavirus most of our Johnston Carmichael staff are now working remotely. This means our Johnston Carmichael staff are still working fully and are on hand to help with any of your queries.
Update from Johnston Carmichael’s tax team
As noted above our tax team are now working remotely but are working fully and on hand to help our clients. What this means for you:
- We have all our working practices in place to deliver our service to the standard we have always given.
- We ask that each client provides information to us digitally e.g. emails and scans of documents.
- We ask all clients to provide the information and respond to requests quickly to ensure deadlines are met.
- We are here to help – please call or send an email to your usual JC contacts and we will provide you with the help you need.
Tax compliance deadlines
We have noted below the upcoming compliance deadlines which may affect your business. If you wish to discuss these with us, please let us know.
Corporation tax for companies with year end 29 February 2020 – 30 June 2020 – Deadline for submission of the CT return to HMRC is 28 February 2021 – 30 June 2021.
Annual Tax on Enveloped Dwellings (ATED) – any ATED returns covering period 1 April 2021 to 31 March 2022 are due for submission to HMRC by 30 April 2022. Additionally, if a property within the ATED regime is acquired then the company has 30 days following purchase to submit the return for the relevant period.
If your company has a year end falling within these dates, provides benefits to employees to be included on Form P11D or has an employee share scheme in place please provide the information to allow us to meet these deadlines as soon as possible.
In other compliance deadlines Companies House has issued guidance that if, immediately before the filing deadline, it becomes apparent that accounts will not be filed on time due to a company being affected by Coronavirus, the company may make an application to extend the period allowed for filing. If you do not file for an extension and accounts are filed late, an automatic penalty will be imposed. Any appeal will take into consideration the implication of the circumstances on a case by case basis. However, it is advisable to apply for the extension in advance if required.
More guidance
More guidance can be found on the Government’s website.
Corporation tax returns – what you need to do
In the next few weeks you can expect that our correspondence and documentation will be delivered to you digitally.
This means that, for example, companies with a February or March year end that are expecting their tax returns for 29 February 2020 to be submitted to HMRC by 28 February 2021, these will be delivered to you by email by your usual JC contact.
We would appreciate these being sent back to us by email in a timely manner for the submission deadline with HMRC. An email with approval to submit the return to HMRC is acceptable.
Any claims or elections included in the 28 February 2019 amended returns will also need to be submitted by 28 February 2021. We will monitor this closely and be in touch if this affects your tax return, and we would be grateful if you could send this back to us in a timely manner by email.
Quarterly instalment payments
For companies who pay their corporation tax liabilities through quarterly instalment payments and are anticipating business profits being adversely affected by the current coronavirus situation, we advise that you revisit forecasts and quarterly tax instalments and reduce future quarterly payments accordingly for upcoming payments. Should the company be experiencing cash flow problems over the coming months it may be possible to defer payments or agree time to pay arrangements with HMRC.
If you believe that you have now overpaid corporation tax based on future profit levels, and are therefore due a repayment from HMRC, you should phone HMRC to request a repayment for the amount overpaid.
Business cash flow and time to pay arrangements
For any business or self-employed people in financial facing financial distress at the moment, we’ve noted below some immediate steps you could take now:
- Prepare regular updates to trading and cash flow forecasts, ensuring the business can remain on track in the coming weeks.
- Review the cost base and take whatever restructuring and cost action is required to keep the business as viable as possible until trading hopefully recovers.
- Be mindful of Director’s duties with regards to the solvency of the business.
- Proactive discussion with bank and funders regarding the provision / extension of existing facilities.
- Proactive discussions with customers about how to manage changes to Service Level Agreements/contracts.
If you need any support with these please do not hesitate to get in touch with the Johnston Carmichael team, we’re here to help.
Concerns about paying your tax bill – use the Time To Pay service
We would recommend constant dialogue with customers and bank funders to ensure ongoing relationships through this time.
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you are concerned about being able to pay your tax due to coronavirus, please call HMRC’s dedicated helpline now: 0800 024 1222.
More guidance
HMRC’s dedicated helpline aims to support businesses affected by coronavirus and allows access to tailored support and advice. Further details of the helpline can be found on their website.
Business rates relief
Supportive measures were announced in Budget 2020 to support business as we respond as a nation to the global impact of coronavirus.
Of the measures announced, business rates was at the top of the agenda with the following reliefs announced for businesses in England:
- Business Rates retail discount had already been announced back in October 2018, with 33% relief to be given from 2020/21 to those businesses with a rateable value of less than £51,000. The Chancellor announced this would be increased to 50% relief for 2020/21.
- For small businesses affected by coronavirus the business rates retail discount is to be increased to 100% for 2020/21.
- The business rates retail discount has been expanded to the leisure and hospitality sectors, who will be amongst the worst affected during the coronavirus outbreak. Initial exclusions to this, which included estate agents, lettings agencies and bingo halls, have now been removed. Find out more.
- The government had also previously advised they would introduce a £1,000 business rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020, this is now being increased to £5,000.
- Businesses who benefit from Small Business Rate Relief will also be given a cash grant of £3,000 per business.
HMRC’s dedicated helpline aims to support businesses affected by coronavirus and allows access to tailored support and advice. Read the full detail on their website.
In Scotland, the Finance Secretary announced measures for Scottish businesses.
In Scotland, the Economy Secretary, Fiona Hyslop has also significantly improved the package of reliefs and grants available for Scottish business in line with the UK announcements, to include:
- 100% rates relief for all retail, hospitality, leisure and aviation businesses (previously it was only applicable to properties with a rateable value of less than £69,000) from 1 April 2020. Find out more.
- Businesses eligible for small business rates relief or rural rates relief will now be eligible for a £10,000 grant. This now includes self-catering accommodation. Check the Scottish Government’s website for a link to your local council’s application page.
- A £25,000 grant for those leisure, retail and hospitality businesses with a rateable value between £18,000 and £51,000. Each business can only claim for one non-domestic property in their portfolio. Check your local council website for details of how to apply from 24 March.
- 1.6% rates relief for all properties across Scotland, which effectively reverses the planned below inflation uplift in the poundage that is applied as part of the rates calculation from 1 April 2020.
- A fixed rates relief of up to £5,000 for all pubs with a rateable value of less than £100,000 from 1 April 2020.
Positively Kate Forbes, the Finance Secretary, confirmed that the reliefs announced by the Economy Secretary will automatically apply to rates bills from 1st April 2020.
A Scottish specific helpline for business has been set up, open Monday to Friday from 8:30am to 5:30pm to address business queries. Call: 0300 303 0660
Find out more on the Scottish Government's website.
Not sure what your rateable value is? Find out on the Scottish Assessors website.
Next quarterly VAT payment deferred
The next quarterly VAT payment due by businesses is to be deferred. Payments are deferred from now until end of June and companies will have until the end of the financial year to pay any deferred VAT. This is a direct injection of £30bn of cash to employers, equivalent to 1.5% of GDP.
Key points to note:
- VAT returns are still required to be prepared and filed by the normal due date.
- The deferment is applied automatically, there is no requirement for businesses to apply to HMRC.
- If VAT is normally paid by direct debit, a business will need to cancel the direct debit with their bank to ensure a VAT payment is not collected.
- Similarly, payments on account (if applicable) for VAT would need to be cancelled to ensure that payments are not collected.
- This is simply a deferment and the amount of VAT deferred will still be payable to HMRC at a future date. Payment will be due by 31 March 2021 and further guidance is expected from HMRC soon as to how businesses can repay the VAT deferred.
- HMRC will not charge interest or penalties on any amount deferred.
- The deferment is optional and businesses who are in a position to pay their VAT liability as normal can choose to do so.
- VAT payments due following the end of the deferral period need to be paid as normal.
- It is not absolutely clear if the deferral applies to non-resident businesses with a UK VAT registration or only to UK businesses. We are proceeding on the basis that the deferral would also be available to non-resident businesses with a UK VAT liability.
- Deferment is not available for VAT MOSS payments.
- VAT refund returns should be processed and paid by HMRC as normal.
Find out more on the Government's website.
We’re here to help
If your business is affected by coronavirus restriction measures please contact your normal Johnston Carmichael contact if you require any assistance at any time.
We understand that this is a very worrying time for all both personally and professional, but please be assured that we are operating as normal and we’re ready to help.
