COVID-19 – Update 5

Dear Clients,

There is still no information from government regarding funding for the self-employed. An announcement is expected in the next couple of days.

Income tax payments due under self-assessment will be deferred to January 2021.

We have also been advised that although directors of owner managed companies who take minimal salaries and dividends can furlough themselves the government funding will be based on the salary only. This information has yet to be confirmed.

It is becoming apparent that the mechanics of the job retention scheme are unlikely to be operational until late April. Government expects companies to borrow in the short term to fund the wage package.

The main source of funds for this will be the deferral of value added tax payments for the quarter until June 2020 which do not have to be paid until March 2021. Further information is sparse, but the Financial Times reported that government officials advised that there will be no interest or late payment charges on these vat deferrals.

However, businesses with direct debits to pay VAT to HMRC will need to cancel these immediately or the money will be deducted automatically. The Treasury has said that it could not cancel them unilaterally.

The latest information on the UK and Welsh Government support is available here: –

https://www.gov.uk/guidance/coronavirus-covid-19-information-for-individuals-and-businesses-in-wales#businesses

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