As part of the package of actions announced by the Chancellor on 20 March 2020 to support businesses through the period of disruption caused by COVID-19, there were a number of measures relating to new reliefs or deferrals in respect of tax. Some, though not all, are targeted at small and medium enterprises. Some have a specific focus on businesses in the retail, hospitality and leisure sectors which will obviously be immediately impacted following the closure of many such businesses as a result of the Prime Minister's announcement on 20 March.
Below is a summary of the key measures set out so far. This note does not cover all of the other schemes announced (some detail of which may be found using the link below under VAT and Income Tax) but looks only at tax reliefs and deferrals.
It is important to note that all of the measures below will take effect in respect of eligible businesses without the need to apply or take other similar action.
VAT and Income Tax
With effect from 20 March 2020, payment of the next quarter of VAT will be deferred to 30 June 2020. All UK businesses are eligible, with taxpayers having until the end of the 20/21 tax year to pay liabilities accrued during the deferral period.
For Income Tax Self-Assessment (i.e. for the self-employed), payments due on 31 July 2020 will be deferred until 31 January 2021, with no penalties or interest for late payment.
Further information can be found here.
Retail, hospitality and leisure businesses
Business rates holiday: the Government has announced a business rates holiday for retail, hospitality and leisure businesses based in England for the 20/21 tax year. This is a holiday rather than a deferral and will be applied via council tax bills.
Further information is available here.
Cash grants: businesses in the retail, hospitality and leisure sectors (again, based in England) will be provided with a cash grant of up to £25,000 per property. Where the rateable value of businesses in these sectors is under £15,000, they will receive a grant of £10,000, and where the rateable value is between £15,001 and £51,000, a grant of £25,000 will be provided.
Nursery businesses
There will be a business rates holiday for nurseries in England for the 20/21 tax year similar to that offered to retail, hospitality and leisure businesses. This will be available to properties either occupied by providers on Ofsted's Early Years Register, or wholly or mainly used for the provision of the Early Years Foundation Stage.
Business rates - businesses that pay little or nothing
Additional funding will be available through the Small Business Grant Scheme for local authorities to support small businesses that already pay little or nothing by way of business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to businesses based in England who meet these criteria.