Following Chancellor, Rishi Sunak’s announcement on 20th March 2020 that VAT payments are set to be deferred to help businesses through the COVID19 pandemic, we have been asked numerous questions regarding VAT. So, we thought it best to the post frequently asked ones so far.
Q) Do you need to apply to HMRC to defer my payments?
A) No, according to gov.uk this will be happening automatically.
Q) If your quarter-end is February 2020; are you still required to submit your return?
A) Yes, you still need to submit your return by the due date as normal. However, as the payment date for this return is 7th April 2020, this date falls within the deferment period of 20th March to 30 June 2020. Deferment also applies to VAT periods ending March and April 2020. As it currently stands, this arrangement allows until the end of the 2020/2021 tax year, 5th April 2021, for payment of liabilities that accumulated during the deferral period.
Q) If you receive regular VAT repayments from HMRC; how will this impact you? Will HMRC delay the repayments?
A) VAT refunds and claims will not be impacted; HMRC will pay these out as normal.
Q) If you pay by direct debit, will your payments automatically cease?
A) HMRC advises businesses who pay by Direct Debit to cancel their direct debit with their bank if they are not able to pay and to allow sufficient time for the bank’s cancellation process to take effect. HMRC’s system will not automatically suspend the collection of payments as it will not be able to identify who intends to make their normal payment and who wishes to take advantage of the deferral.
The guidance can be found here: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses.
HMRC also have a dedicated helpline with an option for VAT. The number is 0800 0159 559. While the deferral measures brought in should reduce the need to call HMRC to discuss a time to pay, you can also use the number if you have difficulty submitting the return on time due to coronavirus related issues.