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VAT deferment period is finished

2020
29
JUN

During the current crisis HMRC has allowed VAT registered businesses to defer paying their VAT liability for the period between 20 March and 30 June 2020.  This deferment applied to VAT periods ending 29 February, 31 March and 30 April where payments would be due by 7 April, 7 May and 7 June.

That deferment period is now finished and businesses currently submitting VAT returns for the period to 31 May 2020 are required to pay the VAT due by the due date of 7 July.  

Throughout the deferment period businesses were required to continue submitting VAT returns but could choose not to pay the VAT due by the normal payment date.  However the VAT which has been deferred during that period will have to be paid by 31 March 2021.

This has given some much needed breathing space to businesses during the first 3 months of the pandemic allowing them time to see how the situation affected their cash flow.  Although businesses are still not fully up and running the deferment period is now over and businesses will have to make their VAT payment on time.

For many businesses their next VAT payment is likely to be small if they have not been able to trade for many weeks which will be helpful.  Some businesses may even find themselves in a VAT refund situation if they have had no or very little income but have still had to pay bills and have used the time to spend on repairs, maintenance, updating their website, advertising, etc.  It makes sense, therefore, to prepare and submit your VAT return as early as possible in the month so that your VAT refund can help cash flow in your business.

Set up direct debit

If you are a business which normally pays VAT by direct debit but cancelled the direct debit in order to defer your last payment you will need to set up the direct debit mandate again.  This must be done 3 working days before you submit your VAT return so that it will take effect for the VAT return you are about to submit.  If you leave it too late you will need to make a payment by BACS by 7 July and set up the direct debit mandate at a later date.

The direct debit will need to be set up by logging into your Government Gateway VAT account.

 

Related Tags:  HMRC |  VAT |  VAT Deferment | 
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Old Sarum, Salisbury
Salisbury
Wiltshire
SP4 6QX

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