After the Chancellor’s announcement on 20 March 2020, if you are a UK VAT registered business and have a payment due between
20 March 2020 and 30 June 2020 (VAT quarters ending February, March and April) you have the option to:
- defer the payment until a later date
- make the VAT payment as normal
The option to defer payments is to help businesses through the COVID-19 pandemic. There will be no interest or penalties on deferring the VAT payment. Businesses must pay the VAT liability on or before 31 March 2021 if they choose to defer their VAT payments.
Deferment is automatically applied; you do not need to apply to HMRC if you are deferring the VAT payment. However, you must continue to submit your VAT returns as normal.
If you currently pay by direct debit, HMRC advises to cancel these allowing enough time for the bank’s cancellation process to take effect, as the HMRC system will continue to try to collect any VAT due. HMRC will continue to process VAT reclaims and refunds as normal, so VAT refunds are not affected and continue to be paid out.
If you defer a VAT payment between 20 March 2020 and 30 June 2020, but the balancing payment is outside of these dates, then the amount you need to pay is the balancing payment without the deferred payments. Deferring payments will not create a repayment.
VAT payments that are due after the end of the deferral period will need to be paid as normal.
Read the full guidance on the deferral of VAT payments of the UK companies here.
If you need some help with annual accounts and/or monthly accounting services, then please contact us sales@1office.co and we will send you a personal offer.[/vc_column_text][/vc_column][/vc_row]
