HMRC have announced that a deferral will apply to VAT payments due from 20 March 2020 until 30 June 2020. All UK businesses are eligible, and no applications required to the relief - businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year (i.e VAT quarters ending on or after 31 March 2021) to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
The deferral relates only to the payment of the return, and therefore the return should be filed on time as usual. This is subject to the normal rules – if a business has a reasonable excuse for not filing the return on time then HMRC would accept this (such as illness, bereavement and so on).
HMRC has confirmed that businesses will need to cancel their direct debits. Businesses that have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank to cancel that mandate. This needs to be done before the direct debit is due to be collected.
Taxpayers have until the end of the 2020/21 tax year to pay any liabilities that accumulate during the deferral period. VAT refunds and reclaims will be paid by the government as normal. Businesses will also need to remember to reinstate their direct debit mandate once the deferral is over and to make arrangements to pay the accumulated VAT by the end of the 2020/21 tax year.
Businesses should continue to file their VAT returns by the due date.