HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

Eligibility
All UK businesses are eligible.

How to access the scheme
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

VAT registered businesses still need to submit their return by the due date as normal. However, as the payment date for the February 2020 VAT return is 7th April 2020, this date falls within the deferment period of 20th March to 30 June 2020.

Deferment also applies to VAT periods ending March and April 2020. As it currently stands, this arrangement allows until the end of the 2020/2021 tax year, 5th April 2021, for payment of liabilities that accumulated during the deferral period.

With regard to those who pay their VAT by direct debit, HMRC advises them to cancel their direct debit with their bank if they are not able to pay and to allow sufficient time for the bank’s cancellation process to take effect.

HMRC’s system will not automatically suspend the collection of payments as it will not be able to identify who intends to make their normal payment and who wishes to take advantage of the deferral.

The deadline for paying the deferred payments is now confirmed as 31st March 2021.