At the time of writing, we are still awaiting more detail on many of the announced Government reliefs in relation to COVID-19. However, details are available for an essential cashflow lifeline, the vat payment deferral available to you if you cannot pay your upcoming VAT liabilities.
The VAT payment deferral applies to all VAT registered businesses and does not require any application to be claimed. It currently covers the period 20 March 2020 to 30 June 2020, meaning that any VAT payment due for VAT returns covering a period ending 28 February 2020, 31 March 2020 and 30 April 2020 can be deferred, if required.
Crucially this means that if you ordinarily pay your VAT by direct debit, this will need to be cancelled with your bank. This will need be done in sufficient time to stop HMRC trying to collect any payment due on the usual payment date once your VAT return has been submitted. We would therefore advise that you do this as soon as possible.
As it stands any VAT payments deferred during the deferral period will be payable by 5 April 2021, and currently there has not been any mention of late payment interest. If you are due a VAT refund during the deferral period then this should be refunded to you within the normal timeframe.
Please note that the deferral only applies to the VAT payment and so any VAT returns due within this period will still need to be submitted. It will also mean that any VAT payments due after 30 June 2020 (payments for VAT return periods ending 31 May 2020 onwards) will need to be paid by another method, or the direct debit re-instated to avoid late payment. Please see the link included for ways to pay your VAT https://www.gov.uk/pay-vat
If we can be of any help to you or your business during this stressful time, then please do get in contact. Your portfolio partner’s mobile number is on our website, or do email your usual contact for a call back.