Winter Economic Plan – Extensions to Government Support Schemes

In response to the continued impacts of covid-19 the government has decided to extend various measures which were initially introduced for the short term and also to extend periods for repayments of loans and taxes falling due.

The temporary VAT reduced rate for hospitality and tourism was due to end on 12 January 2021 but will now continue until 31 March 2021.

Coronavirus Bounce Back Loans (BBLs) were due to be closed to new applications from 4th November, but now applications can be made, both for BBLs and Coronavirus Business interruptions Loans (CBILs) until 30th November 2020 subject to approval by 31 December 2020. The BBL scheme is now rebranded as ‘Pay As You Grow’ to offer more flexible repayment arrangements.

Repayment terms for BBLs (now PAYG) can be extended by the borrower from six to ten years and borrowers are to be allowed to take limited repayment holidays. Businesses will also be able to apply to pay interest only for six months and those in further difficulties may apply for a six-month repayment holiday.

Similarly for CBILS, but with the option for the lender to decide, they can choose to extend the terms of repayment of CBILs to ten years. The government guarantee allows lenders to offer effectively unsecured finance for this term.

Businesses with VAT payments falling due in the period March to June 2020 were allowed to defer the payments until March 2021. Businesses will now be allowed to arrange to repay the deferred amounts over the 2021/22 tax year, paying in 11 instalments, subject to them applying for this.

Earlier in the year, self-assessment taxpayers were allowed to defer the amounts falling due for payment in July 2020 until January 2021. The Chancellor has announced that all amounts now due in January 2021 could be deferred on application online by the taxpayer, including the balancing payment for 2019/20, capital gains tax and the first on-account payment of tax for 2020/21. The amount so due will be spread over a maximum of 12 months under a time-to-pay arrangement. Taxpayers with up to £30,000 of self-assessment liabilities who apply will be automatically accepted for such deferral and those whose liability is over that amount will need to discuss with HMRC.

It should be stressed at this point that all VAT and self-assessment tax returns should be submitted on time – it’s only the payment dates which have been deferred!

No Comments

Leave a comment

We would love to read your feedback on the above post. Required fields are shown with a *. Your email address will not be published

Allowed HTML tags are <a href="">, <p>, <br>, <i>, <em>, <strong>, <b> and <strike>.

Jacobs Allen is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.

Something to shout about

Coronavirus Job Retention Scheme (CJRS) FAQs

The vast majority of questions we have been asked are about the Coronavirus Job Retention Scheme (CJRS). You can view all of our FAQs here.