If you are a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:
- defer the payment until a later date
- pay the VAT due as normal
HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.
The VAT payment deferral period ends on 30 June 2020. This means you will need to:
- set-up cancelled direct debits in enough time for HMRC to take payment
- submit VAT returns as normal, and on time
- pay the VAT in full on payments due after 30 June
Any VAT payments you have deferred between 20 March and 30 June should be paid in full on or before 31 March 2021. You can make additional payments with subsequent returns.
HMRC will issue guidance on the end of the VAT deferral period very soon but, to be effective, direct debit mandates usually need to be set up three working days before a VAT return is filed.
We cannot set up direct debit mandates on behalf of our clients; the business needs to set up the mandate through their business tax account.
HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in MTD for VAT.
- if you are unable to pay the VAT due and may need time to pay as soon as possible and before the payment is due
- for advice and information on other support available
Go to gov.uk for full information of the deferral of VAT payments.
Please note that the deferral relates to payments only, submission deadlines for VAT returns remain the same.
If you’re concerned about the impact that Coronavirus could have on your business, please don’t hesitate to get in touch with us.
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