COVID-19 support schemes – this week’s update, 15 February 2021

Feb 15, 2021

This week’s update covers the latest VAT deferral guidance, key deadlines for the CJRS and a change to CJRS calculations which takes effect next month for some employees.

VAT deferral guidance

HMRC has updated the guidance on how to register for the online service to further defer VAT due between 20 March 2020 and 30 June 2020. If a business wants to join the new deferral scheme, this will be open from 23 February 2021 to 21 June 2021 inclusive. If your business is on either the VAT Annual Accounting Scheme or the Payment on Account Scheme, an invite to join the new payment scheme will be issued in late March 2021.

The new deferral scheme lets you:

  • pay your deferred VAT in equal instalments, interest free; and
  • choose the number of instalments, from 2 to 11 (depending on when you join).

To use the online service, you must:

  • join the scheme yourself, your agent cannot do this for you (we understand this is due to banking regulations as the scheme requires direct debits to be set up);
  • still have deferred VAT to pay;
  • be up to date with your VAT returns;
  • join by 21 June 2021;
  • pay the first instalment when you join; and
  • pay your instalments by Direct Debit (if want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you).

If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.

The month of joining the scheme will determine the maximum number of instalments that are available. If you join the scheme in March 2021, you’ll be able to pay your deferred VAT in 11 instalments or fewer (if you so choose).

The table below sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

If you join by:

Maximum number of instalments available to you:

   

19 March 2021

11

21 April 2021

10

19 May 2021

9

21 June 2021

8

CJRS forthcoming deadlines

The deadline for claims under the CJRS for January 2021 is today Monday 15 February 2021, unless a reasonable excuse applies. 1 March 2021 is the deadline to amend any claims for this month.

Change to calculations from 1 March for some employees

The most recent CJRS Treasury Direction, laid late last month, formally extends the scheme until 30 April 2021. However, employers are advised that it also changes how some employees’ reference salary and usual hours calculations must be performed for March and April 2021 claim periods.

It is important therefore that employers check now if the change will impact on the calculations for any of their employees and ensure they pull together the necessary information required to calculate on the new basis. The change applies to variable rate and/or variable hour employees. More details are laid out in the Direction.