July Jobs Stimulus

Debt warehousing and reduced rate of interest for outstanding 'non-COVID-19' debts

On 23 July 2020, the Government announced the Jobs Stimulus Package in response to COVID-19. The package included some measures to assist businesses in dealing with their tax debts.

Debt warehousing of certain PAYE (Employer) and VAT debts

'Debt Warehousing' is an arrangement whereby VAT and PAYE (Employer) liabilities incurred during the period of restricted trading caused by COVID-19 will be 'parked' on an interest-free basis, subject to certain conditions. Liabilities accrued up to the end of the first bi-monthly VAT period after a business has resumed trading are eligible for warehousing for a period of 12 months.

Reduced interest rate for outstanding 'non-COVID-19' tax debts

The Government has also announced a reduced interest rate of 3% per annum to apply to tax debts not associated with COVID-19, provided the taxpayers concerned enter into a phased payment agreement with the Collector-General before 30 September 2020. The 3% rate represents a significant reduction from standard interest rates on late payment of taxes of 8% and 10% per annum.

Further information and guidance on both measures is outlined in the information booklet:

Next: Temporary acceleration of Corporation Tax loss relief