A guide to tax relief in the United Kingdom

Through various announcements and updates made during the daily Coronavirus briefings, the UK government, under the financial leadership of Chancellor Rishi Sunak, have put into place a variety of tax reliefs to support not just businesses but also individuals during the Coronavirus pandemic.

Tax relief for individuals

On 24th March 2020, the government announced that people of working age, who already receive council tax support, would be given extra support during the Coronavirus crisis to help cover their council tax bills.

Termed the Council Tax Hardship Fund, the support was worth a total of £500 million and was expected to support some 2.3 million British citizens.

In addition, around 30% of councils across the UK were offering payment holidays to struggling citizens. Further still, some councils extended the payment across 12 months rather than the usual 10, thus reducing the amount due each month.

Tax relief for businesses

As of 19th March 2020, the government announced that they would be increasing the Business Rates Retail discount to 100% for one year, ensuring that an estimated 900,000 business properties would benefit from reduced business fees in 2020/2021.

This relief covers most non-domestic business properties, including:

  • Shops
  • Offices
  • Pubs
  • Warehouses
  • Factories
  • Holiday rental homes / guest houses

To receive the relief, eligible businesses were asked to apply via their local authority, who would then reimburse any business rates already paid.

The government also pledged an additional £2.2 billion of funding to local authorities to enable them to support small businesses which already pay little or no business rates due to Small Business Rate Relief (SBBR). It was acknowledged that even those businesses paying no tax would still be struggling to cover their business costs with minimal income, and so one-off grants of £3,000 were set up to support around 700,000 small businesses.

HMRC’s Support

HMRC – the UK tax body – set up a helpline to support those struggling to meet their tax payments, stating that businesses may be able to delay VAT payments to 31st March 2021, and self-employed individuals may be able to delay Self-Assessment payments to 31st January 2021.

These situations and tax reliefs are determined on a case-by-case basis to offer tailored support to those who need it. Read more here.

Other tax relief in the United Kingdom

Import taxes on all medical equipment have been waived, including the import duty and VAT payments. This relief, as set out by the government at the end of March 2020, could be claimed by any individual importing eligible goods into the UK, including:

  • Protective equipment
  • Medical devices
  • Equipment for the Coronavirus outbreak

The goods eligible for relief must be related to an organisation based in the UK, which is either a state organisation or an approved charity organisation. Read more here.

On 6th April 2020 the government also increased the Universal Credit allowance for those struggling with living costs – rising from a standard £317.82 per person to £409.89 per person, per month. Monitored by individual accounts, the Universal Credit allowance is adjusted in line with earnings, with the government promising to adjust the credit further if an individual is unable to work due to the Coronavirus.

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