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Last updated: 25/03/2020

We appreciate these are very challenging and uncertain times for individuals and businesses and are really hoping that the situation improves sooner rather than later. Rest assured that we are here to help as much as we can.

As such, in light of recent government measures introduced to help support businesses through the Coronavirus outbreak, VAT payments due between 20/03/2020 and 30/06/2020 are being deferred. This means the deferral of one quarter’s VAT, applicable as follows:

 

  • The payment due on 7 April 2020 for VAT returns ending 29th February 2020
  • The payment due on 7 May 2020 for VAT returns ending 31st March 2020
  • The payment due on 7 June 2020 for VAT returns ending 30th April 2020

 

This is an automatic offer with no applications required and means that businesses will not need to make a VAT payment during this period. The government’s advice is that taxpayers will be given until the end of the 2020 to 2021 tax year to pay VAT liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

If you have a direct debit in place with HMRC in respect of your VAT payments, our advice is that you should cancel this with your bank as soon as possible if you are unable to pay your VAT liability. If you do wish to cancel your direct debit, please do so as soon as possible so that HMRC do not attempt to automatically collect the payment on receipt of your VAT return. This will allow them sufficient time to process the direct debit cancellation.

Please note that this is merely a deferment and the liability will still be due. Therefore, if you have sufficient funds available to make the payment, and doing so would not have a significant impact on your cash flow in that you are able to fulfil other important business expenses (such as staff wages), our advice would be that you make your payment as normal. If you usually pay by Direct Debit, our advice would be to keep the direct debit in place to pay the liability as normal.

It is also important to note that once you’ve cancelled your direct debit with HMRC, you will need to set this up again after 30th June 2020, if you would like the payments to be collected automatically for future quarters.

Should you have any queries relating to the above, please do not hesitate to contact us.