As part of the Government’s package of COVID-19 support, all UK VAT registered businesses have been able to defer VAT payments due between March 20 and June 30, 2020 until March 31, 2021 at the latest.
Those businesses that usually pay their VAT by direct debits were required to cancel their direct debit mandates in order to benefit from this deferral.
Michael Steed from the Association of Taxation Technicians (ATT) said: “The VAT deferral ceases to apply from July 1, meaning that from that date businesses will have to pay their VAT bills on the normal due date.
“If a business has previously cancelled their direct debit mandate in order to defer a VAT payment, they need to set up a new one in plenty of time to ensure that their next, non-deferred, VAT payment can be taken in time.”
HMRC recommends that new direct debit mandates be set up at least three working days before submitting a VAT return in order to ensure the amount is taken in time.
Michael Steed said: “Businesses with a VAT quarter ending May 31 need to move quickly to make sure they set up their direct debit in time for payment to be taken by the July 7, 2020 deadline.
“Failure to get a direct debit set up in time could result in the business paying their VAT bill late, and ultimately result in them being charged a penalty.”
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Susie Hughes © Shout99 2020