Coronavirus Update 20/03/2020 – VAT

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A VAT holiday until June and government grants to help pay workers’ wages have been announced by the chancellor as part of an additional package of measures to help the UK through the coronavirus crisis.

He said: “To help businesses keep people in work, I’m deferring the next quarter of VAT payments. No business will pay VAT from now to mid-June. You’ll have until the end of the financial year to repay those bills.

Encouraging firms not to lay off workers, he announced a grant scheme to cover 80 per cent of the salary of retained workers, up to a total of £2,500 a month.

“The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March and will be open before the end of April for at least three months. There’s no limit on the funding available for the scheme, we will pay to support as many jobs as needed.” Full details on how to apply are expected to be announced soon.

Self-assessment tax payments have also been deferred until January 2021, while the self-employed will be allowed to access Universal Credit at a rate equivalent to Statutory Sick Pay for employees, should they need to.

The previously announced Coronavirus Business Interruption Loan scheme will now give interest-free loans for a year rather than 12 months, it was announced. Full details of the scheme and who will be eligible will be released on Monday when it opens for applications.

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