On 20 March, the Chancellor announced additional measures to help support those businesses affected by coronavirus. In those announcements included a postponement on all VAT payments from 20 March until the end of June 2020.
To summarise, those announcements are as follows:
– The deferral will apply from 20 March 2020 until 30 June 2020
– All UK businesses are eligible
– This will apply automatically, and businesses will not need to make a VAT payment during this period
– Any liabilities that arise relating to this period do not have to be paid until the end of the 2020/2021 tax year
– Where the business is entitled to a VAT refund, then this will be paid as normal
This will benefit around 2 million VAT payers, some key details to note are outlined below.
Any deferred UK VAT will be due in 2021, however dates vary
For those who pay VAT monthly, VAT will no longer need to be paid during the 20 March – 30 June period, instead it will be due to be paid to HMRC by the end of the 2020/21 financial year which is 31 March 2021.
For those who pay quarterly VAT, most payments will be determined by their VAT filing deadlines and their financial year ends will be:
– 31 March 2021;
– 30 April 2021; or
– 31 May 2021.
Making Tax Digital – returns must still be filed on time
VAT returns must still be filed on time and the new 2020 Making Tax Digital (MTD) rules should be adhered to. There is no special application procedure; it is an automatic measure.
Foreign businesses with UK VAT registration excluded
The deferral is only applicable to UK businesses. Foreign (non-resident) UK VAT registered businesses must still pay their VAT liability by the regular deadline of 7th of the second month following the reporting quarter or month.
HMRC has set up a new telephone ‘time to pay’ helpline to help any businesses concerned about being able to pay tax liabilities due to the coronavirus. You won’t need this for the automatic VAT deferral above, but if you are struggling with other taxes, such as PAYE payments, you may find this useful. The number is 0800 024 1222 and we advise, if you are struggling, that you call the number as possible and make the necessary agreements.
If you would like any further information, please contact a member of the PM+M team on 01254 679131.
This information is correct as of 22 March 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.