Since the first case of Covid-19 was discovered in the UK, the government have been steadily introducing necessary measures to not only contain the virus, but also to support businesses and individuals during these unprecedented times. Whilst some new legislation and other changes were expected to come into force from the beginning of the new tax year in April, many important financial decisions have now been postponed to ease pressure and difficulties during this challenging moment in time. We’ve chosen the top five things most likely to impact you that have been delayed as a result of the Coronavirus:
- IR35 reform delayed
This will come as a big relief for contractors. Just a week after the IR35 reform was announced, the chief treasury secretary, Steve Barclay, followed with another announcement that the changes would be postponed for one year. The law which aims to clamp down on tax avoidance by targeting employees who operate as disguised contractors to avoid paying income tax and national insurance contributions has been met with much backlash from genuine freelancers as well as from businesses who use contractors and freelancers. Despite controversial opinions on the accuracy and effectiveness of the IR35 reform, it will still be rolled out into the private sector come 1 April 2021. This should allow sufficient time for all businesses to prepare.
- Free TV licence for over 75’s has been extended
A win for pensioners, albeit only a small one. Earlier in the year, the BBC had announced that they were unable to fund free TV licences for the over 75’s without a government contribution and meant that only those who were receiving pension credit would continue to be eligible for a free TV licence. The free TV licences were due to end on 1 June 2020, however, this date has now been moved back to 1 August 2020. Furthermore, they have hinted that they are considering moving it back even further, although this has not yet been confirmed. The change means that over 3 million pensioners do not have to pay the £157 fee until (hopefully!) the period of self-isolation is over.
- Payment on account to be automatically postponed until January 2021
For the self-employed and those that have to complete a personal tax return, the second payment on account is usually due on 31 July. HMRC are now automatically offering people a deferral until 31 January 2021. You do not need to do anything, and you will not receive any penalties or interest for late payment during this period. However, if your finances have not been adversely affected by the pandemic, we would strongly recommend that you pay this as it will have a knock-on effect, resulting with a much larger tax bill come January 2021.
- An extra 6 months extension on MOTs
If your car, van or motorcycle is due a MOT from 30 March onwards, you will now have an additional 6 months until it is due. This has been applied automatically, so whilst you do not have to do anything, you are still liable for your vehicle and must keep it in a safe, roadworthy state, or risk fines and points on your licence. Garages have been declared as an essential business so you may still be able to get your MOT completed or repaired if necessary.
- Banks ordered not to cancel credit cards until October
The Financial Conduct Authority (FCA) introduced rules in September 2018 requiring banks to contact those customers in persistent debt which have not been reduced for 18 months. However, in light of the pandemic, banks have now been ordered not to cancel credit cards of those who are struggling to make re-payments until 1 October at the earliest. From mortgage holidays to allowing customers to access money from savings account that would normally incur a penalty charge, many banks are now offering flexible support for those in financial difficulty.
Despite the delays and extensions mentioned above, one payment that has been confirmed to be going ahead in Oxfordshire is council tax. All 5 district councils in Oxfordshire have confirmed that they have no plans to delay council tax and will not be shifting the two-month break in it. It will also still be rising by 3.99%.
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