The Chancellor yesterday evening announced further measures to help businesses with their cashflow to bridge the gap during this extended period of reduced income. Now the gym is closed make sure you 'work out' which the best ones for you.

Income Tax and VAT Deferrals

The self employed July 2020 income tax payment on account for the 2019/20 tax year, will be automatically deferred until January 2021 with no interest or penalties accruing. This appears to be for sole traders and partnerships only, and not include directors or employees also due to make payments on account. [EDIT: This has been amended and now seems to include anyone making payments on account under self assessment including directors or employee].

Similarly, VAT due between 20 March and 30 June 2020 won't be collected by HMRC. [EDIT: HMRC have amended their guidance and now state that if you pay by Direct Debit you need to cancel it in good time and reinstate it later]. You will have until 5 April 2021 to catch up with this deferral. VAT refunds will be made as usual. If you're on an annual VAT scheme to end of March, any VAT due will be deferred and if you're due a refund, that will be paid. You're still required to prepare your VAT return so you'll receive a refund as normal if one is due. 

There is much to be happy about in today's Budget, where the magic money trees are well and truly thriving!

Businesses will benefit from many announcements, particularly those who trade from a property, have one or two employees, and need a new car!

Business rates are abolished for a year for rateable values of less than £51k and these same businesses will receive a £3k grant, as a response to the Coronavirus but it's also part of the overall picture of dealing with competition from Amazon and other online retailers.

Continung this series of Jargon Busting explanations, we turn to SPV which has been used for many years in the business world and also by HMRC VAT.

You may know that exports are zero rated and think that there's nothing else to worry about. You're expecting to recover VAT on your costs so you're in a net recovery position each month. You might even be thinking of submitting monthly VAT returns to optimise your cashflow.

However, to be correct, you need to be able to agree with the following statement.

All my EU customers are VAT registered.