Have you missed out on the COVID-19 VAT deferral?  There may be a lifeline.

Due to COVID-19, HMRC allowed businesses to defer their VAT payments due between 20 March 2020 and 30 June 2020. In order to do that, businesses were asked to cancel their VAT Direct Debit. However, if you did not manage to cancel your Direct Debit in time, HMRC have now confirmed there is a route to claim a refund.

As per HMRC, the easiest way will be to submit a Direct Debit Indemnity Claim to your bank. Please make sure that you state you want to claim a refund under the Direct Debit Indemnity Scheme (DDI). HMRC confirms that there is no time limit in making this request.  Due to COVID-19 restriction, HMRC is not issuing repayments through Payable Orders.

Please make sure that your bank details with HMRC are up to date so that HMRC can make the repayment. You can check your bank account details by logging into your HMRC portal.

So far HMRC has not provided any guidance re payment of the deferred VAT. We understand that at the end of the deferral period (30th June 2020), HMRC will provide some guidance re payment of the deferred VAT which must be paid between 1 July 2020 and 31 March 2021. Businesses will also need to make arrangement for their regular VAT payments.

For businesses who deferred their VAT under the COVID-19 deferral and cancelled their direct debit, HMRC will also need to confirm that reinstating a Direct Debit will not result in the deferred VAT being collected immediately.

For more information please contact Naveen Sahney, VAT + Custom Duties Advisor nsahney@garbutt-elliott.co.uk. or Alex Millar, Senior VAT Consultant amillar@garbutt-elliott.co.uk