Tax & admin 14 December 2020

Managing your tax liabilities so that it doesn’t kill cashflow

Business man paying taxes
Karen Pearson discusses options available for personal and business taxes.

Karen Pearson, Director of Jackson & Green Accountants, joins Sue Gee, from Prosper², to discuss all things tax for the upcoming months, including VAT post Brexit.

After a difficult year for many SMEs, sole traders and freelancers, Pearson takes viewers through the options available for personal and business taxes.

With useful information about how to handle HMRC to get the outcome you need, this webinar contains invaluable information for anyone with questions about how to make sure they are up to date with their taxes, and stay on the right side of HMRC.

“It’s been a dreadful year, I think we all have to acknowledge that and HMRC do as well and that’s really important. We’ve also got companies and individuals who are heading towards significant tax liabilities over the next couple of months, and it’s knowing what they can do, where they can go to get help.”

Topics Pearson covers include:

Self-Assessment

If you cannot pay your 5th April 2020 tax bill in full by 31st January 2021, either:

  • Call HMRC on their Self-Assessment Payment Helpline: 0300 200 3822
  • Set up a payment plan online

You can set up a payment plan online through your Government Gateway and spread the cost of your latest Self-Assessment bill if:

  • you owe £30,000 or less
  • you do not have any other payment plans or debts with HMRC
  • your tax returns are up to date

You can choose how much to pay straight away and how much you want to pay each month. You will have to pay interest, currently 2.6%.

You do not need to contact HMRC if you set up a payment plan online.

“I can’t stress enough that HMRC want to work with you, what they don’t like is people ignoring them.”

VAT

If you deferred VAT between 20th March and 30th June 2020 and still have payments to make, you can:

  • pay the deferred VAT in full on or before 31st March 2021
  • opt in to the VAT deferral new payment scheme when it launches in 2021

The online opt in process will be available in early 2021. Your accountant cannot do this for you, you must opt in yourself.

Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

The scheme will allow you to:

  • pay your deferred VAT in instalments without adding interest
  • select the number of instalments from 2 to 11 equal monthly payments

To use this scheme, you must:

  • still have deferred VAT to pay
  • be up to date with your VAT returns
  • be able to pay the deferred VAT by Direct Debit

If you opt in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.

Getting ready to leave the EU

When the UK leaves the EU your business must be ready. Take this online survey to find out what you need to do to ensure a smooth transition.

“The crystal ball just isn’t working, we still don’t have a deal. I think the most important thing is make sure that you’re appointing an agent. You don’t want to be trying to navigate, bringing goods into the UK, or exporting until everything settles down and everyone knows what they’re doing.”

HMRC are in the process of writing to all VAT registered businesses highlighting actions that should be taken if they plan to continue trading with the EU after 1st January 2021.

If this affects you, the key actions that you must take are:

  1. Appoint a specialist to deal with import and export declarations. Most businesses use a third party such as a freight forwarder or fast parcel operator to deal with this, and do not do their customs declarations themselves.
  2. Check to see if you will be able to delay your declarations or duty payments.
  3. Register for the free-to-use Trader Support Service if you plan on moving goods into Northern Ireland from 1st January 2021 Trader Support Service (TSS)

About Karen Pearson

Karen is Director at Jackson & Green. Having spent 20 years in retail and industry before moving permanently to practice in 2006, Karen has considerable experience in retail, sales management and marketing. She has worked with companies such as Jaeger, BT and DSG and has assisted many clients with life ‘at the sharp end’.

Karen is responsible for all aspects of accounts preparation, bookkeeping, business tax and client liaison. Karen is also a fully qualified lecturer and teaches accountancy part-time at a local further education college.

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