HMRC have announced temporary changes to the VAT payments due between 20 March 2020 and 30 June 2020 to help businesses manage their cash flow. Perhaps key to the advice is the recommendation that if you usually pay your VAT by direct debit then HMRC are recommending you CANCEL the direct debit to avoid the payment being taken in error.
The advice from the HMRC website reads as follows:
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:
- defer the payment until a later date
- pay the VAT due as normal
It does not cover VAT MOSS payments.
HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.
You will still need to submit your VAT returns to HMRC on time.
HMRC will continue to process VAT reclaims and refunds as normal during this time.
If you choose to defer paying your VAT
If you choose to defer your VAT payment as a result of coronavirus (COVID-19), you must pay the VAT due on or before 31 March 2021.
You do not need to tell HMRC that you are deferring your VAT payment.
Payments made by Direct Debit
If you normally pay by Direct Debit you should contact your bank to cancel your Direct Debit as soon as you can, or you can cancel online if you’re registered for online banking.
After the VAT deferral ends
VAT payments due following the end of the deferral period will have to be paid as normal. Further information about how to repay the VAT you’ve deferred will be available soon.
If you’re in temporary financial distress because of COVID-19
If you are experiencing financial difficulties more help is available from HMRC’s Time to Pay scheme.
We’re here to help
With all the legislative changes and updates over recent days in these ever changing and uncertain times, our teams are briefed and here to help you and your business.
Whilst our physical offices are closed following the ‘lock down’ advice, the team at NR Barton are working remotely from home. If you have any questions you should not hesitate to contact your engagement partner or manager who will be happy to assist; our contact details can be found here.
For anyone unsure of who to contact, we are still answering phones (01942 242245) and we are answering emails to accounts@nrbarton.co.uk.
We’re here to help.
All the best
The NR Barton team
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