In the Chancellor’s winter economy plan last week, two major changes to previous COVID-19 related VAT reliefs were announced.
Businesses that took advantage of the VAT payment deferral earlier this year will be given extra time to pay under the so called ‘new payment scheme’.
Rather than paying deferred amounts in full by the end of March 2021, they will be able to choose to make 11 equal, interest-free instalments over the financial year 2021-22 instead. All businesses that took advantage of the VAT deferral will be eligible, though they will have to opt in; an opt-in process is expected to be put in place in early 2021.
In efforts to support the hospitality industry, where business is likely to be quiet through winter months and possible further lockdowns, the temporary reduced rate for certain supplies of hospitality, holiday accommodation and admission to attractions will be extended to 31 March 2021. This was previously due to run until 12 January 2021.
For more information on the VAT measures and how these could help your business, please contact Julian Millinchamp at julian.millinchamp@hazlewoods.co.uk or 01242 237661.