COVID-19: Deferral of VAT payments – action required
The Government announced temporary changes to the VAT payments due between 20 March 2020 and 30 June 2020 as part of its COVID-19 rescue package to help businesses manage their cashflow.
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you can choose to:
- Defer the payment until a later date, or
- Pay the VAT due as normal
Interest will not be charged or penalties imposed on any amount deferred as a result of the Chancellor’s announcement.
VAT returns will still need to be returned to HMRC on time.
Important – cancellation of direct debit
If you wish to defer your VAT and payments are normally made by Direct Debit, you should contact your bank to cancel your Direct Debit as soon as you can. Alternatively, you usually can cancel online, if you are registered for online banking. This needs to be done before the payment is taken.
If you choose to defer your VAT payment as a result of Coronavirus (COVID-19), the VAT will then be due on or before 31 March 2021.
There is no need to inform HMRC that you are deferring your VAT payment. All VAT payments that will be due following the end of this deferral period will need to be paid as normal.
More information on this can found at gov.uk here
Should you require any clarification on this matter or require advice on the wider Government support package for those businesses impacted by COVID-19, please contact us.
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