The next quarter of VAT payments have been deferred from now until the end of June, with businesses permitted until the end of the financial year to repay the accumulated amount due; a direct injection of over £30 billion of cash to businesses, equivalent to 1.5% of GDP.
HMRC have already announced a more sympathetic approach to time to pay arrangements where businesses can agree a payment timetable with HMRC on a case by case basis. This new offer is far more comprehensive and will greatly help businesses in the short term.
The Government’s statement:
“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. 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.
For payments due outside this timeframe businesses can apply for a time to pay arrangement. We have set out HMRC guidance below:
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.
HMRC may grant businesses an additional amount of time to pay their bill without charging statutory penalties on the late payment. To be eligible, you would have to demonstrate that your business is in genuine difficulty, that you are unable to pay your tax on time, and that you would be likely to be able to pay if HMRC allowed you 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.”
VAT returns should continue to be submitted on time wherever possible.
If you have any concerns around your VAT position, please speak to your usual UHY contact or speak directly to Sean Glancy, London VAT partner.