Deferring VAT payments
The government is offering a deferral of VAT payments due between 20 March 2020 until 30 June 2020. HMRC has now confirmed that it will not automatically cancel collection of VAT payments by direct debit. Businesses that have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank to cancel that mandate. This needs to be done before the direct debit is due to be collected.
Businesses will also need to remember to reinstate their direct debit mandate once the deferral is over and to make arrangements to pay the accumulated VAT by the end of the 2020/21 tax year.
Remember that if you have cancelled your VAT Direct Debit you are still required to submit returns in line with your normal deadline. If you think you will struggle to complete the return due to a reduced workforce and require assistance with this, please contact us immediately to ensure you are not penalised.