One of the government’s schemes to assist VAT registered businesses with their cashflow during the current COVID disruption was the deferral of VAT payments.
The VAT payments that could be deferred cover payments due between 20 March 2020 and 30 June 2020.
VAT traders that have taken advantage of this support will have likely deferred just one VAT payment.
The following terms and conditions of this deferral option are set out below:
- You have a choice; you can pay the VAT that comes due or defer the payment.
- HMRC have said that they will not charge interest or penalties on any VAT you do defer.
- The deferral does not include payments for VAT MOSS or import VAT.
- HMRC will continue to process repayments as usual.
- You will need to plan to pay any VAT deferred in this way by 31 March 2021.
In all circumstances you must file all returns by the due date even if you defer payment
However, deferral does not mean cancellation and as we have reminded readers above any VAT deferred will need to be paid by 31 March 2021.
This means that you would have nine or more months to save for the VAT deferred.
Readers are advised to make sure that they plan accordingly, otherwise the apparent relief in being able to skip a VAT payment will return to haunt you next year.
This is not an ongoing offer. The deferral option ceases for any VAT payments due after 30 June 2020.
Readers who suffer significant set-backs during the current disruption have one further option. There is a formal “Time to Pay” arrangement that you may be able to use when the VAT becomes due and cash funds are restricted.
Source: New feed