COVID-19 tax measures


Time to Pay

HMRC has established a dedicated COVID-19 helpline in order to facilitate businesses agreeing bespoke Time to Pay arrangements, with 2,000 further staff handling calls. The phone number is 0800 0159 559. These arrangements may include agreeing instalment arrangements, suspending debt collection proceedings, and cancelling penalties and interest where administrative difficulties are encountered when attempting to contact or pay HMRC.

Requests are currently being considered on a case by case basis with businesses being required to demonstrate particular hardship as a result of the COVID-19 crisis. We understand that HMRC is agreeing to deferrals of up to three months for payment of taxes including PAYE, VAT, and corporation tax. These deferrals may not be agreed until a payment is overdue and a debt has fallen due to HMRC.

Business Rates

Extending the measures announced in last week’s Budget[1], the Government has now announced a 100% business rates holiday for all retail, hospitality and leisure businesses in England for the next 12 months, regardless of the rateable value of the business. In addition, the grants available to small businesses eligible for Small Business Rate Relief are increased from £3,000 to £10,000 and a further £25,000 grant is available to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.

IR35 Reform Delayed

The extension of IR35 to the private sector is being postponed by a year, to 6 April 2021. The announcement was clear that this is not a cancellation of the reform, but simply a deferral in response to the COVID-19 situation. The delay of the complex and onerous new rules will be welcome news to both businesses and contractors.

Crown Preference Delayed

The reintroduction of the Crown preference was expected to come into force on 6 April 2020. However, the Budget delayed this until 1 December 2020. When it comes into force, the reintroduction of this measure will mean that HMRC becomes a preferential creditor in insolvency for uncapped amounts of VAT and other taxes collected and held by businesses on behalf of taxpayers (eg. PAYE). Businesses in an insolvency situation (and their creditors) will be relieved not to have this additional burden amid the COVID-19 crisis.

Accounts Filing

Although not a tax measure as such, filing accounts is linked to corporation tax obligations. With regard to the annual filing of accounts, reports, and confirmation statements with Companies House, the Government has advised that appropriate measures should be taken to ensure that these are filed on time. However, companies may apply to extend the period for filing if it becomes apparent before the deadline that the accounts will not be filed in time due to the company being affected by COVID-19. If a company does not apply for an extension prior to the deadline, any appeal against late filing penalties will be dealt with under existing policies. It remains to be seen whether HMRC will make any similar statements in relation to tax filing obligations.


Miranda Cass


Julia Cockroft


Rachel Arnison

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