Deferral of VAT payments

vat

As part of the Government’s support for businesses during COVID-19, HMRC introduced Deferral of VAT payments as an option for businesses 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 still submit your VAT return on time

Please note that this deferral of VAT payments only applies to the payment due and not the actual return.  All VAT returns will be due as normal by the deadline applicable to your business.

You don’t have to tell HMRC If you choose to defer your VAT payment but you will have to pay the VAT due on or before the 31st March 2021.  You can make ad hoc payments or additional payments with your subsequent VAT returns to reduce the amount outstanding, if you wish.

Deferral of VAT payments ending

Please note 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

Direct Debits

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’.

It is quite straightforward to do this online through your Government Gateway account but please get in touch if you need help with this.

Also remember to factor the next VAT payments into your cashflow.

To find out more about see the Government guidance at COVID-19 Deferral of VAT payments