5 June 2020
As the country went into lockdown in March, the Chancellor announced a deferment of VAT payments for UK VAT registered businesses with a VAT payment due between 20 March 2020 and 30 June 2020. The measure was introduced to help businesses that were worried about meeting their tax payment deadlines during such unprecedented times, allowing the payment to be deferred to 31 March 2021, with no penalties or interest applying.
So for payments due from 1 July 2020 these must be made as normal. This applies to payments in respect of VAT returns and Payments on Account. If you cancelled your direct debit or other payment method this needs to be reinstated. If payment is made late then penalties and interest may apply. If a penalty is charged then this might be removed if HMRC are satisfied there is a reasonable excuse for the default.
There is an option to approach HMRC to reach a Time to Pay agreement if the payment cannot be made. The Government have indicated they will take a sympathetic approach to these discussions. Taxpayers should be prepared to provide reasons and supporting evidence to support their application. HMRC, like all organisations, have had to cope with staff absences and different ways of working. Therefore if a time to pay agreement is required this should be done as soon as possible to allow for delays.
For more information about the various tax payment deferral options announced, including Time to Pay, please see our tax payment deferral FAQ page.
If you need assistance in dealing with HMRC, please do not hesitate to contact your usual UHY advisor or contact us here.