Deferral of VAT payments as a result of COVID-19

As part of the government’s support for businesses during COVID-19, HMRC gave businesses the option of deferring their VAT payments if they were unable to pay on time, without incurring penalties. Payment of VAT falling due between 20‌‌ March and 30‌‌ June 2020 can be deferred until 31‌‌ March 2021.

Businesses must continue to file their VAT return on time, even if they defer payment.

We want to remind businesses that the option to defer paying VAT ends on 30‌‌ June 2020. This means that VAT returns and Payments on Account with a payment due date after 30‌‌ June must be paid in full, on time.  For those businesses who submit quarterly returns, the first return requiring full payment will be either 05/20, 06/20 or 07/20 depending upon the VAT stagger in use.

If a business hasn't deferred any VAT payments, they do not need to take any further action. If they have deferred paying their VAT and normally pay by Direct Debit they should now reinstate the DD with their bank.

This should be actioned at least three working days before the submission of the next VAT return in order for HMRC to take payment. For further details go to GOV‌‌.UK and search for 'Pay your VAT bill'.

Remember, any VAT payments deferred during this period should be paid in full on or before 31‌‌ March 2021. The business can make ad hoc payments or additional payments at any time before April 2021 to reduce the amount outstanding.

If a business is unable to pay the VAT due and requires additional time to pay, they should contact HMRC before the payment is due. For help go to GOV‌‌.UK and search for 'If you cannot pay your tax bill on time', or call 0300 200 3835 and please quote 'V1'.

If you have any questions, please contact the VAT team.