Tax news in brief

9 December 2020: Highlights from the broader tax news this week includes: deadline for businesses to join VAT deferral new payment scheme and an extension for overseas firms to provide the certificate necessary to make a VAT refund claim.

Statutory payment rates confirmed for 2021/22

The government has published weekly rates for statutory sick pay and statutory parental pay from the start of the 2021/22 tax year in a policy paper detailing benefit and pension rates. Statutory sick pay rates increase to £96.35 from £95.85, and rates for maternity, paternity, shared parental and adoption pay increase to £151.97 to £151.20. The lower earnings limit rate to qualify for these pay rates has not yet been confirmed.

Deadline to join VAT deferral new payment scheme

Businesses impacted by COVID-19 that want to pay deferred VAT in instalments throughout 2021/22 must opt-in to the government’s new scheme by 31 March 2021. HMRC confirmed the deadline in an update to its guidance on the scheme which enables businesses to defer payment of VAT that had been due between 20 March and 30 June 2020 due to the impact of coronavirus. The online opt-in process is not yet available but is due in ‘early 2021’.

Extended deadline for certificates needed for overseas VAT refund

Businesses established outside the EU can reclaim VAT incurred in the UK for their business purpose by applying through the overseas VAT refund scheme. For the year 1 July 2019 to 30 June 2020 applications must be made by 31 December 2020. However, HMRC has acknowledged that due to COVID-19 businesses are facing difficulties in obtaining the required certificate of status from their official issuing authorities. As such it is allowing applicants an additional six months to provide their certificate of status, ie by 30 June 2021. The rest of the application and documentary evidence must still be submitted by 31 December 2020. Find out more.