Tax Debt Warehousing Scheme - What Every Business Owner Needs to Know
Are you a business owner worrying about how you are going to pay your VAT & PAYE liabilities?
Well, thankfully the Government has responded to your obvious concerns and have announced a new scheme which will warehouse these debts for a period of 12 months.
Here's what you need to know:
❇ The tax debts covered are VAT & PAYE (Employer) debts from the 'COVID19 restricted trading' period. ❇ VAT liabilities for the periods January/February, March/April AND May/June 2020 are covered under this scheme. ❇ PAYE (Employer) liabilities for the months February, March, April, May and June 2020 are covered under this scheme. ❇ You must continue to file returns for these periods, but NO interest will be charged on late payment, and no debt enforcement will take place. ❇ The period covered will also include the 2 months after the business recommences 'normal' trading. ❇ VAT & PAYE (Employer) liabilities incurred while the business was unable to trade or subject to restricted trading, and during the 2 months after, will be 'ring-fenced'. ❇ This ring-fenced tax debt will be 'warehoused' for 12 months. No interest will be charged during this 12 month period. ❇ BUT BUSINESSES MUST PAY CURRENT TAX LIABILITIES ARISING DURING THOSE 12 MONTHS. ❇ After the end of the 12 month 'warehousing' phase, a reduced interest rate of 3% per annum (compared to normal 10% rate) will apply to the warehoused tax debt. ❇ Tax Clearance will be unaffected by these warehoused debts. ❇ Refunds & repayments of tax arising after businesses recommence 'normal' trading will be paid, BUT it will be possible to offset these against the 'warehoused' debt.