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COVID-19 Response: Deferral of VAT Payments (last updated 25 March 2020)

Announced on 20 March, VAT registered businesses will not be required to make payments towards VAT liabilities arising from 20 March 2020 until 30 June 2020.

This is an automatic offer with no applications required.

This will cover payments due on VAT quarters ending on 29 February 2020 (due by 7 April), 31 March 2020 (due by 7 May), and 30 April 2020 (due by 7 June). It will also cover monthly returns for periods ending on those same dates and will also cover any non-standard VAT periods with due dates falling within the prescribed date range.

It should be noted that this is a deferral; the VAT will still be due, and will have to be caught up by the end of the financial year on 31 March 2021. The returns should also still be submitted on time to avoid any potential surcharges.

If you have set up a direct debit for your VAT returns and wish to take advantage of the deferral, please note that you will need to cancel the direct debit instruction with your bank. If you do not, the direct debit will be requested as normal and if there are sufficient funds in your account to settle the liability they will be taken. If you intend taking advantage of this deferral we would recommend that you cancel the instruction now; at the very latest this should be done 3 days before the normal direct debit date.

Please note that the instruction will need to be set up again should you wish to pay by direct debit in the future.

If you wish to pay your VAT as normal you can do so.

If you have arrears from prior periods and wish to defer payment on these we would urge you to contact HMRC on their special coronavirus related 'Time to Pay' service on 0800 0159 559.

HMRC will undertake to continue to process refunds and reclaims during this period as normal.

These are unprecedented times and businesses will understandably be looking for any relief or cash flow advantage they can obtain, including taking advantage of this deferral. We would however recommend that every business undertake a cash flow planning/forecasting exercise, both for the short term (the next few weeks) and the medium term (into next year to cover repayment of deferred liabilities). Cash flows can be difficult to predict at the best of times but, aside from the health of your team, is the single most important issue for your business at the moment and such an exercise is vital to help to plan the way forward and ensure your business's future.

March 23, 2020

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