The Chancellor recently announced a VAT payments deferral to support businesses with cashflow during the COVID-19 pandemic. Here's a breakdown of what you need to know, with information received directly from HMRC.
What does this involve?
All businesses with a UK VAT registration have the option to defer VAT payment due between 20th March and 30th June. Businesses have until 31st March 2021 to pay any VAT deferred as a result of this announcement.
What do I need to do?
Businesses do not need to inform HMRC if they wish to defer payment. They can opt
in to the deferral simply by not making VAT payments due in this period.
What if I pay via direct debit? Businesses who normally pay via direct debit should cancel their direct debit with their bank if they are unable to pay. This can be done online if they're registered for online banking. They should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT Return. Can I still pay as normal? Should they wish, businesses can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. Does this affect my VAT Return? Businesses must continue to submit VAT returns as normal.
For more information visit: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19