20 March 2020
During these unprecedented times many businesses are worried about meeting their tax payment deadlines. Penalties can be significant if there is a failure to meet a payment date. However HMRC have indicated they will look at individual circumstances sympathetically during this difficult economic period.
Immediate deferral of payments
HMRC have announced a deferral of tax payments. HMRC have stated:
HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.All UK businesses are eligible.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
Additional support
For any payments falling outside this timeframe businesses can apply for a time to pay arrangement. You will need to explain why you cannot make the payment and when payment might be made. You must agree this arrangement in advance.
We have set out HM Government guidance below:
HMRC Time to Pay
HMRC has set up a dedicated COVID-19 helpline for advice and support. The helpline number is 0800 0159 559. Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm. The helpline will not be available on Bank Holidays.
Scaling up HMRC Time To Pay service, allowing businesses and the self-employed to defer tax payments over an agreed period of time. This service was introduced in response to the 2008 economic crisis.
HMRC may grant a business an additional amount of time to pay their bill without charging statutory penalties on the late payment. To be eligible businesses would have to demonstrate that they were in genuine difficulty, unable to pay their tax on time, and were likely to be able to pay if HMRC allowed them more time.
The Treasury underlines that Time to Pay arrangements are agreed “on a case-by-case basis and are tailored to individual circumstances and liabilities.”
The Budget report states that “HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19.”
If you need assistance in dealing with HMRC, please do not hesitate to contact your usual UHY advisor or contact us here.
