COVID-19 VAT Deferral
The Government’s VAT deferral scheme was very welcome and likely needed for many businesses.
In brief, the scheme allows for a temporary change to the VAT payments due between 20 March 2020 and 30 June 2020. 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 31 March 2021. Remember that it is the payment being deferred and not the VAT Return filing – you will still need to file your April 2020 Return as normal.
You may stage your repayments to HMRC on an adhoc basis, although you will want to ensure consideration is given to the staging of payments and the business’ cash flow requirements to avoid leaving the full repayment until the deadline.
If you pay your VAT via direct debit, HMRC advise that you contact your bank and cancel this to avoid the payment being taken following the submission of your VAT Return.
Important: HMRC kindly agrees not to charge interest or penalties on any amount deferred as a result of the above measures, so don’t permit HMRC to charge you late payment penalties and interest on your next VAT quarter – Remember to reactivate your Direct Debit!
If you still have any questions about how the VAT deferral works or would like further guidance on what other COVID-19 support there is available to you, you can call us on 01243 782 423 or head to our contact form and a member of our team will be in touch!