Question submission date: April 2020
Full Question: I am struggling currently due to Covid-19 so wish to defer my VAT payments. What is the process for this? Do I need to notify anyone?
You are not alone in this situation. We are glad that this offering has been provided to contractors and freelancers to help relieve the pressure at this difficult time. Yes, you are able to defer your VAT payments if you have a payment due between 20th March – 20th June 2020. Payment will then need to be paid to HMRC by the 31st March 2021.
You do not need to notify HMRC that you are deferring VAT payments.
A few points. . .
- You can also defer VAT payments if you have payments on account or annual accounting advance payments due between this period.
- We do advise that if you do have any existing arrangements or deferrals in place it is worth speaking to HMRC about this matter before proceeding. You can find more information here: Difficulties paying HMRC.
- VAT deferrals are only applicable between the above dates.
- You will still need to submit your VAT return in the normal manner.
What should you do if you pay by direct debit?
We are recommending all clients cancel their direct debit payments. If you do not cancel your direct debit up to 5 working days before your quarterly payment date, HMRC may still try and request the payment. This sadly is not something we can control. This will not have any impact on your account. You will not have any charges/interest charged to your account as this is simply a deferred payment.
Don’t forget to set back up your direct debit!
This is something we sadly can not do automatically for our clients. You will need to reactivate your direct debit in advance of the next VAT payment.
Answered by Kate Burrows.