Many businesses have deferred recent VAT payments under a temporary change put in place to help with the management of cash flow during the coronavirus pandemic. The deferment period has now ended.
Most taxpayers submit quarterly returns with others regularly filing monthly or annual returns. A range of circumstances mean that reporting periods can vary from these three conventional cycles.
Whatever the reporting cycle, all VAT return payments that would otherwise have needed to be paid between 20 March 2020 and 30 June 2020 must be paid by 31 March 2021.
For the majority of businesses on quarterly returns, the temporary change presented the opportunity to defer one payment, being that for the period ending 29 February 2020, 31 March 2020 or 30 April 2020 (depending upon their quarterly reporting cycle). Others might have had the ability to defer more than one payment.
Many taxpayers passed on the opportunity to defer. Most of the others would have deferred the full amount and now need to keep on eye on proceedings. Those that cancelled pre-existing direct debit authorities will need to reinstate such authorities to ensure liabilities for future periods are paid in time. Reinstatement will not ensure that the deferred amount is paid by 31 March 2021. For this to happen, taxpayers will need to take specific action. To forget could result in a penalty being incurred. The deferment period may be over, but the VAT is still due and will need to be paid eventually.
Many taxpayers will continue to have VAT payment concerns even if they have taken advantage of the deferment window. A special HMRC support line (0800 024 1222) exists for taxpayers to call to discuss their specific circumstances. Time to pay arrangements can be agreed in deserving cases. More information regarding the support line can be found here.
If you need specific advice regarding your VAT obligations, please contact Robert Plumbly on 01223 728238 or firstname.lastname@example.org