Following the Chancellor’s announcement on 19 March and the further updates the UK Government have released since, please read the important points below, regarding the support for businesses through deferring VAT and Income Tax payments:
• All VAT payments falling due from 20 March to 30 June 2020 will be deferred to the end of the 2020/21 tax year which, for these purposes, we understand HMRC consider to be 31 March 2021.
• All UK-established VAT registered entities are eligible; Non-Established Taxable Persons must still pay as normal.
• Approval is automatic with no applications or notifications required; in fact, businesses are encouraged not to call HMRC for confirmation.
• This measure also applies to any VAT Payments on Account falling due between 20 March and 31 May 2020.
• The provisions do not currently include VAT liabilities arising from previous periods although time to pay arrangements may be available through discussion with the HMRC Debt Management Team.
• VAT returns must continue to be filed by the relevant deadlines; anyone who cannot file in time should call HMRC.
• HMRC advise that direct debits should be cancelled by 31 March 2020 and reinstated later using the online form.
• VAT refunds and reclaims will be repaid by HMRC as normal. As usual, repayment returns should be filed ASAP.
• We continue to await full details and publication of the necessary enabling legislation imminently.
In practice we understand that this is available to anyone that is VAT registered, individuals, not for profit bodies and businesses. This is an automatic offer with no applications required. It means that no VAT payment needs to be made during this period.
Taxpayers have until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. HMRC stated that VAT refunds and reclaims will be paid by the government as normal.
Anyone that is having difficulty paying an earlier VAT liability should contact HMRC and agree an additional Time To Pay arrangement with HMRC.
This is some positive advice in a challenging time for all businesses.
If you have any questions, please contact your usual Campbell Dallas advisor or a member of our VAT team.
The information in this blog should not be regarded as financial advice. This is based on our understanding on 24 March 2020. Laws and tax rules may change in the future.