The Government has announced that there is to be a temporary change to the VAT payments due between 20 March and 30 June 2020.
If you’re 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 – you do not need to tell HMRC that you have chosen to defer the payment, it is automatic, or
- Pay the VAT due, as normal
If you pay by direct debit you must cancel the direct debit as soon as possible or the money will be taken
HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.
You must still submit your VAT returns on time, and any reclaims or refunds will still be processed as usual.
This is only a deferral of the VAT due and you will be given until the end of the 2020/2021 tax year to pay any liabilities that have accumulated during the deferral period. Further information about how to repay the VAT you’ve deferred will be available soon.
We would therefore advise clients that if you do choose to defer payment:
- To keep the money to one side if you can possibly afford it;
- Be wary that you could face significant self-assessment/corporation tax/VAT/PAYE bills in close succession in the winter and spring.
The Scheme does not cover VAT MOSS payments.
After the VAT deferral ends
At the moment, this only covers VAT payments due until 30 June 2020 and VAT payments due after that will have to be paid as normal.
If you’re in temporary financial distress because of COVID-19
If you are experiencing financial difficulties more help is available from HMRC’s Time to Pay scheme.