Businesses reminded about VAT help as deadline approaches

by Susie Hughes at 12:26 30/04/20 (News on Business)

Businesses that wish to defer VAT return payments must ensure that they cancel their direct debit in good time for VAT returns that are due on Thursday, May 7, 2020.

The deferral is one of the measures introduced by the Government to help businesses manage during the COVID-19 crisis, when many businesses have been closed or otherwise severely restricted. The Government announced on March 20, 2020 that taxpayers could defer VAT return payments arising in the period up to June 30, 2020, and only have to pay those deferred amounts by March 31, 2021. Businesses wishing to take advantage of the deferral should cancel any direct debits as soon as possible, and ideally five working days before the filing date of the return. The next due date for monthly and quarterly VAT returns is May 7 2020, which is not far away, warns the Chartered Institute of Taxation (CIOT), and represents the filing deadline for the most ‘popular’ VAT return quarterly stagger within the deferral period (quarter ended March 31 2020). Advertisement If businesses do not cancel the direct debit, HMRC will collect any VAT due as usual. The VAT deferral easement also includes interim and balancing payments for the payments on account scheme and VAT payments for annual accounting where these payments would normally be due in the period from March 20 to June 30 2020. John Cullinane from the CIOT, said: “Hundreds of thousands of businesses will be getting their Coronavirus Job Retention Scheme grants this week – but they should not forget about the other Government help which can assist cash flow in a time when financial pressures are high.” If businesses do not want to defer VAT payments, they should be paid on time as usual. HMRC will continue to process VAT reclaims and refunds as normal and most repayments are paid within 5 working days. Direct debits should be reinstated to collect VAT payments due from July 1 2020 onwards. The VAT easement does not apply to import VAT or VAT due under the mini-one-stop-shop scheme (‘MOSS’). It does not apply to other indirect taxes such as customs duty, excise duty, insurance premium tax, environmental taxes and machine games duty. For those businesses that require additional financial assistance, HMRC has enhanced its ‘Time to Pay’ system and has opened a dedicated helpline for those experiencing financial distress as a result of the COVID-19 measures and find themselves unable to pay their tax on time or have other existing tax liabilities: 0800 024 1222. Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2020

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