The UK Government implements a VAT payment delay due to the COVID-19 crisis.
As detailed in our previous article, the UK Government implemented a VAT payment holiday for all VAT payments due in the period from 20 March 2020 to 30 June 2020. The deferral of the VAT due is until the end of the 2020/2021 tax year. HMRC’s Covid-19 helpline confirms that this refers to 5 April 2021; the end of the tax year for income tax purposes. There has been no published confirmation of this date.
The Covid-19 helpline also confirmes that the payment holiday applies to all businesses that are registered for VAT in the UK. Initially, it appeared that the relief did not extend to non-resident businesses. It should be noted that there is no change to the official Government advice on their website. So we recommend that non-resident businesses wishing to benefit from the payment holiday contact HMRC to confirm individual positions. Despite the number of staff committed to the helpline, it is experiencing significant delays due to the demand.
In addition, HMRC confirmed in their published guidance that if a business makes payment of their VAT liability by Direct Debit, they will need to cancel the Direct Debit in order for the payment not to be taken. Businesses need to take this quickly to ensure that HMRC do not process the Direct Debit.
Please contact our Experts if you have any questions about the UK COVID-19 VAT payment delay.
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