Business_ Advice_ to_ Self_ Employed_ Barristers
Below we set out the key Government announcements that affect you and further tips drawing on our knowledge of the BAR.
- You are able to defer payment of your VAT liabilities for VAT Quarters ended 29th February 2020 through to 30th April 2020. The VAT returns need to be filed as normal. Payment will have to be made by the latest 5th April 2021.
- You do not need to contact HMRC to do this – you do have to cancel your VAT direct debit payment.
- No penalties or interest will be charged during the deferral period.
- You are able to defer payment of the second payment on account due on the 31st July 2020 to the 31st January 2021. You do not have to contact HMRC to do this. No penalties or interest will be charged.
- The 31st July 2020 liability can also be reduced if your profits that are included within your 2020 Tax Return are lower than the previous year. (For many of our clients the example would be that the year ended 30th April 2019 profits are lower than the 30th April 2018 profits).
- We would recommend having your accounts prepared as soon as possible to be able to reduce liabilities where applicable.
CASH FLOW IS KING
- Contacting your clerking team at Chambers to assist your cashflow by collecting in as much of your aged debt as quickly as possible.
- All unbilled work should be billed where possible.
- Reducing monthly outgoing – for example applying to defer mortgage payments for up to three months.
PAYMENTS TO HMRC
- The government has announced extra resources to assist those struggling to pay their tax liabilities and in financial distress. This includes a dedicated HMRC coronavirus helpline (t) 0800 0159 559. Hours: Monday to Friday 8am to 8pm and Saturday 8am to 4pm.
- Support will include agreeing a bespoke Time to Pay arrangement with HMRC. This will help those struggling with cash flow and allow those who enter into arrangements to spread liabilities owed over a pre-agreed period. In addition, HMRC will waive late payment penalties and interest where businesses experience administrative difficulties contacting HMRC or paying taxes due to the coronavirus.
- As always, it is important to get an upfront agreement from HMRC before a payment deadline.
UNABLE TO WORK BECAUSE OF ILLNESS FROM CORONAVIRUS OR SELF ISOLATING
- Those not able to work as a result of the coronavirus crisis can claim state benefits. For those who are sick or required to self-isolate, the Employment Support Allowance will be paid from Day 1 of the sickness period. In addition, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating in line with official guidance. This means that all self-employed individuals should be able to make a claim.