ICAEW.com works better with JavaScript enabled.

Covid-19: UK practical business advice using existing tax rules

Paula Tomlinson, an ICAEW member, sets out some advice based on existing income tax and corporation tax rules.

  • As we near the end of the tax year, get your income tax return in as soon as possible after 6 April 2020, for a potential refund of part of your January 2020 tax payment. Then know the exact amount due in July.
  • If you make a sole trader or partnership tax loss to 5 April 2020, generate a tax refund by carrying the loss back to 2019.
  • If you're a start-up sole trader or partnership, this loss can be carried back three years to generate a tax refund from your previous PAYE job or even from rental income.
  • If you're a limited company and make a loss in your current year end, carry it back by a year to generate a tax refund.
  • If you're working from home more than usual, claim more costs against your taxable income for your home office.
  • The sooner you get tax returns sent in, the sooner you can benefit from the above.
  • Getting your return in early doesn't bring forward any tax payment dates, but it does bring forward tax refunds.
  • An increase in Time-to-pay arrangements from HMRC, where you phone HMRC to agree a delay in paying your tax. Have a realistic proposal ready that you expect to adhere to.

Off-payroll working (IR35) deferral

Freelancers and consultants worried about getting taxed as an employee from 6 April 2020 have a year's reprieve until 6 April 2021.

Talk to your ICAEW Chartered Accountant for more trusted business advice.

Paula Tomlinson is an ICAEW Chartered Accountant in practice and owner of On the Spot Tax: onthespottax.co.uk. She is a member of the ICAEW Practitioner Business Advisers’ Community, free to join for all members in practice.