CORONAVIRUS: FURTHER SUPPORT ANNOUNCED
On 5 January 2021, further coronavirus support was announced for some businesses. What are the details?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
Although many businesses deemed “non-essential” were already closed due to being in Tier 3 or 4 areas over the new year, the Prime Minister’s announcement on 4 January that the whole of England was being placed into a full stay-at-home lockdown (including closing schools to almost all children) still came as a huge blow. The new lockdown is set to last until at least the February half-term, and will be reviewed on an ongoing basis.
Perhaps unsurprisingly, this was quickly followed by an announcement of further support for affected businesses, namely those operating in retail, hospitality and leisure. Scotland had already announced similar national restrictions.
These businesses will be eligible to apply for a new one-off grant. The amount will be determined by the business property’s rateable value as follows:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
Business support of this type is a devolved matter, so it is likely that applications for the new grants will need to be made to local councils - as was the case with the funding made available in November 2020. Businesses should therefore check with their local authority over the coming days as more information is made available.
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