Updated: VAT payment deferral to cancel or not to cancel?

Updated as at 3 April 2020.

 

HMRC has provided more guidance re the COVID-19 VAT payment deferral scheme. The details of the scheme are:

 

  • If you are a VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you can pay the VAT as normal or defer it under this temporary scheme.
  • In order to use this deferral scheme, your direct debit must be cancelled. You can do it by using your HMRC VAT portal or by contacting your bank.
  • The VAT deferred due to COVID -19, must be paid to HMRC or before 31 March 2021.
  • You will still need to submit your VAT returns to HMRC on time.
  • The deferment scheme does not apply to VAT Mini One Stop Shop (MOSS) payments.
  • The deferral scheme does not apply to import VAT. Therefore if a business is importing anything from outside the EU, VAT must continue to be paid on import. Subject to the normal VAT rules, this can be recovered in the next VAT return as long as the business has received form C79 form to support the import VAT.
  • HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.
  • HMRC will continue to process VAT reclaims and refunds as normal during this time.
  • VAT payments due following the end of the deferral period will have to be paid as normal subject to any further deferral announcements by the Chancellor.

 

If you are having difficulties paying any other VAT or tax payments to HMRC, you can contact HMRC’s new COVID-19 “Time to Pay” helpline on 0800 024 1222.

 

For more information or if you have any queries regarding the VAT deferral, please contact Naveen Sahney, VAT + Custom Duties Advisor at nsahney@garbutt-elliott.co.uk.

As things unfold, Garbutt + Elliott want to support you through these unprecedented times. If you have any queries or concerns about any of the Government announcements and how they might affect you and your business please don’t hesitate to contact our teams.

 

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19