Whitley Stimpson warns that direct debits should be cancelled due to the VAT deferral

25th March 2020

VAT Deferral

HMRC are supporting businesses through these unprecedented circumstances by deferring Valued Added Tax (VAT) payments for 3 months.

This is automatically offered to all VAT-registered UK businesses with no applications necessary. VAT payments normally due with VAT returns will no longer need to be made throughout this period. Taxpayers will have until the end of the 2020-21 tax year to pay any liabilities accrued during this extension. VAT refunds and reclaims will however be paid by the government as usual.

Those who usually pay by direct debit should cancel this with their bank if they wish to defer VAT payments. This must be done in sufficient time so that HMRC do not attempt to automatically collect on receipt of VAT returns. This deferral will apply from 20 March 2020 until 30 June 2020 and any direct debits should be reinstated at the end of this period.

If you have any concerns about how this may affect your business, please get in touch to discuss your specific needs.