VAT deferral for businesses
If you’re running a VAT registered business of any type, you’ll be aware that the government is allowing you to defer paying any VAT payment that was due between 20 March and 30 June 2020.
Here is a link to the scheme description on gov.uk:
I have a couple of thoughts which might be helpful:
- This is a deferral, but you still have to pay the deferred VAT by the end of March 2021.
- It might help with your cashflow, but you will still owe it.
- Therefore probably it’s a measure to look into if you really have a cashflow problem in the next few months, but otherwise handle carefully.
- You still have to submit quarterly VAT returns in the normal way.
- If you pay VAT by direct debit you MUST cancel the direct debit arrangement with your bank if you think you might defer, and do it NOW! If you don’t, the VAT computer will just take the payment automatically.
- You don’t have to tell HMRC that you’re doing any of this.
Posted on 28 March 2020