HMRC has announced they will not be charging the regular initial 5% late payment penalty if you make payment by 1st April 2021, however its not all good news; The regular payment deadline of the 31st of January hasn’t actually changed, and you will be charged interest after this date.

If you are having problems paying your self-assessment tax, and need more time to pay, you qualify for a “Time to Pay” arrangement with HMRC, you can even set this up online here. You can also call HMRC directly on 0300 200 3822 for more information.

So what is a Time to Pay arrangement? In a nutshell it allows you to spread your payments to HMRC in regular monthly instalments, up until January 2022.

If you still have not filed your Self-assessment tax return for 2019-2020, you need to do this before the 28th February to avoid penalties.

The deadline for claiming the third SEISS grant is fast approaching. If you are eligible, you must make your claim on or before 29‌‌‌ ‌January 2021.

As with the first and second SEISS grants, the third grant will be subject to Income Tax and self-employed National Insurance and must also be reported on your 2020-21 Self Assessment tax returns (to be submitted by 31‌‌‌ ‌January 2022).

Confirming a significant reduction in trading profits

Before you make a claim for the third grant, you must decide if the impact on your business will cause a significant reduction in your trading profits for the tax year you report them in.

HMRC cannot make this decision on your behalf because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.

You do not have to consider any other coronavirus scheme support payments you have already received when deciding whether you reasonably believe that you will suffer a significant reduction in trading profits due to reduced activity, capacity, demand or inability to trade due to coronavirus during 1‌‌‌ ‌November 2020 to 29‌‌‌ ‌January 2021 (period covered by the third grant).

HMRC has announced that Self Assessment tax payers will not receive a penalty for filing 2019-20 tax returns late, as long as you file online by 28‌‌ ‌February 2021.  If you have not yet filed, you are encouraged to do so by 31‌‌ ‌January 2021, if possible.

You still need to pay your Self Assessment tax bill by 31‌‌ ‌January 2021! Interest will be charged from 1‌‌ ‌February 2021on any outstanding liabilities. You can pay online, or through your bank, or by post before you file.

If you cannot afford to pay by 31‌‌ ‌January 2021, you may be able to set up an affordable plan and pay in monthly instalments. But you will need to file your 2019-20 tax return before setting up a time to pay arrangement. More information is available on GOV.UK.

A straightforward guide to VAT Domestic Reverse Charge!

From the 1st October 2019 there will be a radical change to the way VAT is collected for some businesses. If you are a business or individual registered for VAT and work in the building and construction industry, this change is likely to affect you. Whether you are an existing client or not, we are happy to discuss if this will affect your business.

The new VAT changes do not affect consumers, only businesses and individuals registered for VAT.

The fundamental change with the VAT Domestic Revers Charge is, the customer receiving the service will be responsible for pay the VAT to HMRC rather than paying the supplier of the service or product.

HMRC states you will need to apply the reverse charge if the following services are supplied :

• constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services
• constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours
• pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence
• installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure
• internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
• painting or decorating the inside or the external surfaces of any building or structure
• services which form an integral part of, or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works

With the following services excluded from the reverse charge :

• drilling for, or extracting, oil or natural gas
• extracting minerals (using underground or surface working) and tunnelling, boring, or construction of underground works, for this purpose
• manufacturing building or engineering components or equipment, materials, plant or machinery, or delivering any of these to site
• manufacturing components for heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems, or delivering any of these to site
• the professional work of architects or surveyors, or of building, engineering, interior or exterior decoration and landscape consultants
• making, installing and repairing art works such as sculptures, murals and other items that are purely artistic
• signwriting and erecting, installing and repairing signboards and advertisements
• installing seating, blinds and shutters
• installing security systems, including burglar alarms, closed circuit television and public address systems

This information was published by HMRC, and is of course subject to change.

You can find the latest updates and more information on the HMRC website

If you have any questions at all concerning VAT Domestic Reverse Charge, or any other taxation issue, please do contact us today