Your questions answered.
Following the Chancellor’s announcement on 20 March 2020 that VAT payments can be deferred due to the impact of Coronavirus, we answer some of your most common queries:
“Do we need to apply to HMRC to defer our payment?”
No, simply don’t pay it.
As HMRC states, “you do not need to tell us that you are deferring your VAT payment.”
“Our quarter end is February 2020; do we still need to submit our return?”
Returns have to be completed by their due date as normal.
The standard payment date for a February return would be 7 April 2020, which falls within the deferment period of 20 March to 30 June 2020. Deferment also applies to VAT periods ending March and April 2020.
At the time of writing, this arrangement allows until 31 March 2021 for payment of liabilities accumulated during the deferral period.
“What if I’m due a VAT refund from HMRC, will this be paid?”
VAT refunds and claims will not be impacted by the deferral arrangements; HMRC will pay refunds as per normal.
“We usually pay our VAT bill by direct debit, does that matter?”
HMRC advises “cancel your Direct Debit as soon as you can” if you are not able to pay, and to do so with sufficient time for the bank’s cancellation process to take effect – i.e. don’t leave it too late.
HMRC’s system will not automatically suspend the collection of payments as it cannot determine who wants to defer payment rather than continue to pay as normal.
More information about deferral of VAT payments is available here on the GOV.UK site.
For general updates and information on the support and guidance available during the COVID-19 pandemic, you can also refer to our general Coronavirus Business Updates page.
This was posted 27 March 2020 and the information above may subsequently have changed; it is written for the general interest of our clients and others it may help. Some of the content was originally produced by Croner Taxwise Limited and is reproduced with their permission. It is not a substitute for consulting the relevant legislation or for taking professional advice (though you can contact us here or on 01932 564098 for that!).