The Chancellor has announced a VAT payments deferral scheme to support businesses during the COVID-19 pandemic.
This means that all businesses with a UK VAT registration have the option to delay / defer VAT payments due between 20 March and 30 June. The VAT not paid during the period is then due to be paid to HMRC by the end of the 2020/21 financial year, which ends on 31 March 2021.
Businesses do not need to inform HMRC if they wish to defer payment. They can opt in to the deferral simply by not making VAT payments due in this period.
Businesses who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. They should do so in sufficient time so that HMRC does not attempt to automatically collect any VAT due for the period.
No interest or penalties will be due on any deferred VAT.
Should they wish, businesses can continue to make payments as normal during the deferral period.
HMRC will also continue to process VAT reclaims and to make repayments as normal.
VAT returns must still be filed on time.