Update 17 March 2020
Clients can contact HMRC, who have been very understanding and have offered to defer all tax payments (including VAT) for 2 months. In effect this is free credit to help with potential cash flow issues. If you need this then I’d encourage you to phone them.
The simple principle here is – once you’ve paid it, you won’t get it back! HMRC are likely to have to give further concessions if the effect of coronavirus is as severe as expected.
More information is set to be announced in the coming weeks and further details on how to apply. In the meantime, businesses with immediate concerns are advised to contact HMRC’s Business Support Helpline
Update 28 March 2020
The Chancellor announced a VAT payments deferral on 20 March to support businesses with cash flow during the COVID-19 pandemic.
This means that all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 30 June.
You therefore have until 31 March 2021 to pay any VAT deferred as a result of this announcement.
You do not need to inform HMRC if you wish to defer payment. You can opt in to the deferral simply by not making VAT payments due in this period. If you pay by Direct Debit you should cancel this with your bank. You should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.
Should you wish, you can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. You must continue to submit VAT returns as normal.
A helpline has also been set up to help businesses and self-employed individuals with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke ‘time to pay’ arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s helpline on 0800 0159 559.
Update 22 June 2020
As part of the government’s support for businesses during COVID-19, HMRC gave businesses the option of deferring their VAT payments if they were unable to pay on time, without incurring late payment interest or penalties. Payment of VAT falling due between 20 March and 30 June 2020 can be deferred until 31 March 2021.
You must continue to file your VAT return on time, even if you defer payment.
Just a reminder that the option to defer paying VAT ends on 30 June 2020. This means that VAT returns with a payment due date after 30 June must be paid in full, on time.
If you haven’t deferred any VAT payments, you don’t need to take any further action.
If you have deferred paying your VAT and normally pay by Direct Debit you should now reinstate it. You should do this at least three working days before submitting your VAT return in order for HMRC to take payment. For further details go to GOV.UK and search for ‘Pay your VAT bill’.
Remember, any VAT payments you have deferred during this period should be paid in full on or before 31 March 2021. You can make ad hoc payments or additional payments with your subsequent VAT returns to reduce the amount outstanding, if you wish.
If you’re unable to pay the VAT due and need additional time to pay, HMRC will need to be informed. If I do your VAT returns then this is something we will need to discuss.
For help go to GOV.UK and search for ‘If you cannot pay your tax bill on time’, or call 0300 200 3835.
Finally if you need to have a chat with me please contact me. I can do zoom calls, FaceTime or just the normal phone call. Don’t bury your head in the sand, talk to me, and stay safe.