Deferral of VAT payments due to coronavirus (COVID-19) – March 2020

3rd April 2020

The Chancellor announced a VAT payments deferral on 20 March to support businesses with cashflow during the COVID-19 pandemic.

This means that all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 30 June 2020. This includes non-established taxable persons. Businesses have until 31 March 2021 to pay any VAT deferred as a result of this announcement. HMRC will not charge any penalties or interest on payments deferred by this announcement.

Businesses do not need to inform HMRC if they wish to defer payments. They can opt in to the deferral simply by not making VAT payments due in this period. Businesses that pay by Direct Debit should cancel their Direct Debit with their bank. This can normally be done online and should be done in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.

Should they wish, businesses can continue to make payments as normal during the deferral period and can continue to make ad hoc payments after the deferral period to repay any deferred VAT up to 31 March 20201. HMRC will also continue to pay repayment claims as normal.

Businesses must continue to submit VAT returns as normal.

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