VAT payments due between 20st March 2020 and 30th June 2020 will be deferred and businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.
All UK business are eligible, and the offer is automatic with no applications required.
It is important to note that businesses must continue to file their VAT returns on time.
However, if you normally pay your VAT by direct debit, you will ned to cancel the direct debit with your bank if you are unable to pay and you must allow enough time for this to be actioned.
Please remember to set up the direct debit again once the deferral period has passed.
VAT refunds and reclaims will be paid by the government as normal.
Bad Debt Relief
If you are standard accounting for VAT (not cash accounting), it might be a good time to review your outstanding debtors and consider any that might be deemed as bad.
If 6 months have passed since the debt was due and you have paid over the output tax to HMRC already, you could reclaim this VAT back from HMRC on your next return.
Laura Bright, Client Account Manager at Harvey, Telford and Bates advises:
“If the team at Harvey, Telford and Bates prepare your VAT returns on your behalf and you feel this might be applicable, please let us know and we will be able to help guide you.”