VAT Deferral, National Minimum Wage Changes and Self-Assessment Tax Payments

VAT Deferral, National Minimum Wage and Self-Assessment Tax Payments

Please find below updated information on the following points:

Table of Contents

Should you have any queries on any of the points, please call us on 0113 257 4506 and we will be happy to discuss these further with you.

VAT deferral new payment scheme – opt in from 23 February 2021

If you have deferred VAT due from 20 March to 30 June 2020 and still have payments to make, you can opt into the VAT deferral new payment scheme to pay your deferred VAT over a longer period.

The payment scheme is expected to open on 23 February 2021 and close at the end of June 2021. You can make up to 11 smaller monthly instalments, interest free.

You can opt in to the scheme online without the need to call. Go to VAT deferral for more information. Please note that HMRC is unable to provide an agent service for this scheme.

New National Minimum Wage rates and changes to the National Living Wage qualifying age

From 1 April 2021, the National Minimum Wage rates are increasing as follows:

  • Age 23 and above (national living wage rate) – £8.91 an hour
  • Age 21 to 22 inclusive – £8.36 an hour
  • Age 18 to 20 inclusive – £6.56 an hour
  • Aged under 18 (but above compulsory school leaving age) –  £4.62 an hour
  • Apprentices aged under 19 – £4.30 an hour
  • Apprentices aged 19 and over, but in the first year of apprenticeship – £4.30 an hour  

Please note that this rate of pay applies to both hourly paid and salaried employees.

The age from which workers become eligible for the higher National Living Wage will be lowered. This means that from 1 April workers aged 23 and over will now also be entitled to be paid at least the National Living Wage

Self Assessment Tax Payments due by 31 January 2021

We previously provided details of time to pay arrangements which could be made with HMRC in respect of Self Assessment tax payments due by 31 January 2021.
Interest is accruing on any unpaid amounts.
The amount payable on 31 January 2021 could include both your balancing payment for 2019/20 and first payment on account for 2020/21. As well as accruing interest if any of the balancing payment for 2019/2020 remains unpaid after 31 March 2021, a 5% surcharge on the amount unpaid will be imposed.
Whilst entering in to a time to pay arrangement will not stop interest from being charged, it will avoid incurring the 5% surcharge. However, the arrangement must be agreed with HMRC by midnight on 1 April 2021.
If the total amount payable is less than £30,000, the arrangement can be made online via your personal tax account.
If the total amount payable is more than £30,000, the arrangement can only be made by calling HMRC on 0300‌‌ 200‌‌ 3822.

Further Support

We will continue to support our clients throughout these uncertain times and provide further information when we can. Additionally, If you have any queries on any of the information provided above, or if you require any further support, please get in touch by calling us 0113 257 4506.