Changes to Tax Due to Covid-19

There is no doubt about it, the unprecedented COVID-19 pandemic will have a lasting impact on society. There is no industry that has seemingly been untouched by the pandemic and the government has had to make quick, radical changes to help support the UK economy. Here are some of the changes to UK tax that have been introduced due to the COVID-19 pandemic:

Deferral of VAT payments

VAT payments that were due between March 2020 and June 2020 have been deferred if a taxpayer chooses them to be. Taxpayers can choose to either continue their VAT payments as scheduled or choose a deferral payment plan which will defer VAT payments for on or before the 31st March 2021. Some VAT payments are excluded from the scheme, such as the Mini One-Stop Shop scheme.

Indirect tax relief

A temporary zero tax rate has come into effect in the UK from May 1st until the 31st October 2020 for personal protective equipment (PPE). The zero tax rate is eligible for businesses and individuals alike, providing the PPE is recommended by Public Health England for the use against COVID-19 mitigation. The temporary tax relief is also available on PPE that has been imported from outside of the UK. Another form of indirect tax relief that has been granted to the UK is a temporary VAT rate of 5% for the hospitality and tourism sector. This reduced VAT rate includes food, non-alcoholic beverages and takeaway food from pubs, cafes and bars in the UK. Tickets to attractions in the UK will also benefit from the reduced VAT rate but sporting events are not included.

Import tax waiver

For the vital medical supplies that are helping to fight the coronavirus, such as testing kits, ventilators and protective clothing, import tax will be waived.

Income tax deferral

Income tax payments that were due on the 31st July 2020, have been deferred to January 31st 2021. No late penalties or interest will be added to deferred payments, though it should be noted that the deferral is optional. UK residents are only recommended to delay taking the income tax deferral if they are finding it difficult to complete the payment due to COVID-19 related impacts. If you are unsure whether you would benefit from the referral, contact Reading accountants today for further advice.

Contact Reading accountants you can trust today

Strivex are Reading accountants you can rely on to navigate the changes to tax caused by the COVID-19 pandemic. Whether you manage your own personal finances or the finances of a business, trying to stay on top of changes to tax and COVID-19 guidelines can be incredibly time-consuming and overwhelming. Strivex can offer clear and reliable financial guidance, helping you remain in a strong financial position during the COVID-19 pandemic.