If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:
- defer the payment until a later date
- pay the VAT due as normal
HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.
VAT payments you can defer
You can only defer:
- quarterly and monthly VAT returns’ payments for the periods ending in February, March and April
- payments on account due between 20 March 2020 and 30 June 2020
- annual accounting advance payments due between 20 March 2020 and 30 June 2020
The deferral does not cover payments for VAT MOSS or import VAT.
VAT repayments and returns
HMRC will continue to process VAT reclaims and refunds as normal and most repayments are paid within 5 working days.
Repayments will not be offset against any deferred VAT, but they will be offset against existing debts.
You can apply online to move to monthly returns to improve your cashflow if you’re in a repayment position.
How deferring VAT affects payments on account
If you defer a payment on account between 20 March 2020 and 30 June 2020 but the balancing payment is outside of these dates, the amount you must pay is the balancing payment less any deferred payments. Deferring payments will not create a repayment.
You will still need to submit your VAT returns to HMRC on time.
If you choose to defer paying your VAT
If you choose to defer your VAT payment as a result of coronavirus, you must pay the VAT due on or before 31 March 2021 – GUIDANCE UPDATED 25th SEPTEMBER 2020
You do not need to tell HMRC that you’re deferring your VAT payment.
Payments made by Direct Debit
If you normally pay by Direct Debit you should cancel your Direct Debit through your bank as soon as possible so that HMRC will not automatically collect any VAT due. You can cancel online if you’re registered for online banking.
After the VAT deferral ends
VAT payments that are due after the end of the deferral period will need to be paid as normal.
How to get help
Time to pay arrangements are available to all businesses and individuals who are in temporary financial distress as a result of coronavirus. Time to pay arrangements that started before 20 March 2020 should still be paid.
If you’re struggling to pay your tax bill on time, or you’re experiencing financial difficulties you can contact HMRC’s Time to Pay service.
Get help online
Use HMRC’s digital assistant to find more information about the coronavirus support schemes.
You can also contact the HMRC coronavirus helpline for help and advice.