Coronavirus and business Mar20

18/03/2020

Chancellor Rishi Sunak has unveiled £330bn in loans to help businesses pay for supplies, rent and salaries in the wake of the Coronavirus.

Plus a further £20bn for other aid such as business rates holidays and grants for retailers and pubs.

The move is recognition of the ‘economic emergency’ that the pandemic is creating and is designed to give hard-hit businesses some breathing space.

A couple of other changes that might have dropped below the radar are leniency for businesses who, due to COVID-19, might be unable to file their accounts on time, and a one-year delay for IR35 reforms.

All companies must send their accounts to Companies House annually with late filing triggering an automatic penalty.

However, given the current situation, the Government has announced that if Coronavirus has affected a company, making it impossible for them to meet their filing deadline, they can apply to extend the period allowed for filing.

But take note, if you fail to apply for an extension and you miss your deadline, you will still be subject to the automatic penalty. Remember, filing can be done online.

In terms of the IR35 tax reforms, introduction of these controversial measures will be deferred until April 2021 instead of being introduced next month as had originally been planned in the March budget.

IR35 is a measure to combat tax avoidance when it comes to contractors and freelancers who cannot technically be defined as self-employed and are operating as employees in all but name.

The reform would make medium and large private sector businesses in the UK responsible for setting the tax status of any contract worker that they use.

In the public sector this would mean placing the contractor onto the organisation’s payroll, so that income tax and National Insurance is deducted before the contractor is paid. In the private sector, the ‘intermediary’ would make an extra payment to compensate for the additional tax and NI that HMRC would have received on an equivalent employee’s wages.

The Government has stressed that IR35 is not being scrapped, merely delayed in a bid to alleviate pressure on businesses and individuals amid the Coronavirus pandemic.

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