VAT Deferral – Supporting Businesses Affected By COVID-19
The UK government is supporting those affected by the COVID-19 pandemic by deferring VAT for all businesses and self assessment payments for six months.
This is an automatic offer with no applications required meaning UK Registered businesses will not need to make VAT payments normally due with VAT returns during this period. Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal. You find all the details listed on the ‘COVID-19: Support for Businesses’ page here.
For those who normally pay by direct debit, and are wanted to defer, they must cancel their direct debit with their bank. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.
This will also mean that HMRC will no longer be able to take payments by direct debit until a new one is set up, so you will need to remember to do this when normal VAT payments resume.
Update: HMRC have since updated their guidance so that the Income Tax deferral now applies to all individuals with payments due by 31/7/2020, not just self-employed individuals. The link above provides further information.
If you would like more information on the VAT Deferral Scheme, please contact our VAT Taxperts.