Coronavirus - VAT and Income Tax payments - updated guidance 23/3/20

COVID Virus

The government have recently announced additional support for businesses and the self-employed through deferring Value Added Tax (VAT) and Income Tax payments.

The government have recently announced additional support for businesses and the self-employed through deferring Value Added Tax (VAT) and Income Tax payments.

  • VAT payments will be deferred for 3 months
  • If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

1) VAT

  • All UK businesses are eligible for this support
  • The deferral period is; 20 March 2020 until 30 June 2020
  • Businesses will not need to make a VAT payment during this period
  • Taxpayers have until the end of the tax year 2020/21 to pay any liabilities that accumulate during the deferral period
  • This is an automatic offer, no applications are required
  • VAT refunds and reclaims will be paid as normal.

2) Income Tax – Self-Assessment

  • All self-employed individuals paying Income Tax under Self-Assessment are eligible
  • Payments due on 31 July 2020 under Self-Assessment will be deferred until 31 January 2021
  • There will be no penalties or interest for late payments within the deferral period
  • This is an automatic offer, no applications are required
  • HMRC have also scaled up their ‘Time to Pay’ offer to all firms and individuals temporarily in financial difficulty due to COVID-19.

Key Information for our clients

  • It is only the VAT payment that is deferred, you are still required to file a VAT return on time to ensure a liability exits with HMRC.
  • Therefore, please ensure all VAT information is sent to us electronically where possible, in time for your deadlines.
  • We advise that any clients who have direct debits set up with HMRC cancel these during the deferral period.

Please get in touch with us if you would like to discuss further.

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