Now that we’re out of lockdown and most businesses, including the retail and hospitality industry, have started trading again, it’s worth looking forward to plan for the key financial dates during the rest of the year.
You can read on about this below, or we’ve prepared this handy video:
So, let’s go through them in chronological order.
1 August 2020
Businesses need to contribute towards the cost of furloughed staff from this date. You will need to contribute to the Employer’s National Insurance and Employer’s Pension costs for any furloughed staff. The Government think this will only be about 5% of the cost of their wages, but this will be a hit for many businesses to pay for staff who aren’t actually doing any work for them.
1 October 2020
Many UK companies have a 31 December year-end. And, if your year-end was 31 December 2019, the payment date for your Corporation Tax is 1 October 2020.
The other most common year-end date for UK companies is 31 March and their D-Day for Corporation Tax will be 1 January 2021.
In either case, it’s worth planning ahead now to make sure you can pay that Corporation Tax on the due date.
1 November 2020
The furlough scheme fully ends on 31 October, so this is the date when all of your staff need to be fully back on the payroll.
If you think that there isn’t a role for any of your staff going forwards, you will need to plan in advance as there will be a notice period for any redundancies. It’s worth taking HR advice on this.
7 November 2020
Most UK companies have VAT quarters ending 31 March, 30 June, 30 September and 31 December.
We were all allowed to defer the VAT due in April, May or June, which meant the 31 March return for many businesses.
And the next quarter was a smaller VAT payment for most businesses as sales dropped during lockdown.
But the 30 September VAT quarter will probably be the first quarter where many businesses are back fully trading again, and therefore with a good sized VAT bill.
This is payable on 7 November.
Therefore, it’s worth planning to make sure you have enough cash to pay this.
31 January 2021
There’s a potential double whammy on this date.
Firstly, the Government allowed you to defer your 31 July 2021 payment on account. This becomes payable on 31 January 2021
It is then also the due date for income tax for the year ended 5 April 2020. And, because this is the tax on a year that mainly happened in a pre-coronavirus world, you may be paying tax on higher profits and dividends than you’re getting now.
Which might make the bill harder to pay.
31 March 2021
The Government allowed businesses to defer any VAT due in April, May and June 2020.
But it was just a deferral. And it becomes payable on 31 March 2021.
1 May 2021
This will be the anniversary of the CBILS and Bounce Back Loan schemes.
With both of these loan schemes, there is no interest or capital repayments in the first 12 months, which means many repayments will start in May 2021.
So, there’ll be a cash impact on many, many businesses.
It’s worth putting these dates in your diary. If your Corporation Tax and VAT dates are different, make a note of yours.
And then please do start putting cash aside so that you can make the payments.
If you think you can’t make any of the tax payments, HMRC are being very reasonable over negotiating a Time to Pay arrangement, where they will either allow you a slight delay or perhaps a payment in instalments.
But it always makes sense to speak to them before the due date, as they’re more likely to agree to an arrangement then, rather than if you ring when you’re already late.
And, it does bring home the need to have a cashflow forecast. If you need any help preparing a cashflow forecast, please let me know and we can do it for you.
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