It can be a bit tricky to keep on top of all the updates when it comes to financial support for businesses at the moment. But fear not, we’ve been catching up with the financial experts at LDP Luckmans to give you the lowdown on everything you need to know and how to get your hands on the funding available for small businesses.
VAT Deferral Extension
This is an extension to the previous initiative that allowed businesses to defer their VAT payments until 31 March 2021. Now businesses that are struggling to meet their payment schedule will have until the end of March 2022 to payback any VAT payments that they deferred from 20 March to 30 June 2020 – completely interest free! This will give business owners the opportunity to opt for smaller payments over a longer period and hopefully make your cash flow a bit healthier in the long run.
If you think your business could benefit from this, then you’ll need to opt in to the scheme. However, if you are able to or would like to clear the payments by the original deadline of 31 March 2021, that’s ok.
Don’t forget, if you’re struggling to pay your VAT and need more time or further guidance, get in touch with your accountant or contact HMRC by phoning 0300 200 3835.
Self-Employment Income Support Scheme (SEISS)
The help provided by the Self-Employment Income Support Scheme has also been extended until 30th April 2021.
This new extension will provide self-employed people with two grants paid in two lump sums and will last for six months from November 2020 until April 2021. For the first payment, HMRC will offer a taxable grant for the sum of 20% of three months of your trading profits up to £1,875. The details of the second grant are yet to be decided.
So, who can claim? Firstly, you need to be eligible for the original Self-Employment Income Support Scheme. As a quick reminder, to qualify you have to be able to show that your business has been adversely affected due to coronavirus. All of the following must also apply:
• you traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
• you traded in the tax year 2019 to 2020
• you intend to continue to trade in the tax year 2020 to 2021
On top of that, you’ll also need to declare that you are currently actively trading and intend to continue to trade.
HMRC will be releasing full details on how to claim this second instalment shortly, so keep an eye on www.gov.uk for further updates.