UK: HMRC defers VAT and Income Tax payments

last updated on 3 June 2020 | reading time approx. 2 minutes

As part of their business support package HMRC have announced on Friday, 20 March 2020, the following measures on their web site. This is automatic and no application is required.

Support for businesses through deferring VAT and Income Tax payments

HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

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. You do not need to tell HMRC that you’re deferring your VAT payment.

Eligibility

All UK businesses are eligible.

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

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.

More information can be found on the following link and contact the government department anytime.

Time to Pay (TTP) Arrangement extended to COVID-19 circumstances

HMRC has a set up a phone helpline to support businesses concerned about not being able to pay their tax due to coronavirus (COVID-19). The helpline number is 0800 0159 559. Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.

What Is a Time to Pay (TTP) Arrangement?

A TTP Arrangement allows for a business’ debt to HMRC to be paid back in monthly instalments, typically over a period of up to 12 months. Although depending on the business circumstances and affordability, some arrangements can be agreed over longer periods. The business should contact HMRC as early as possible – preferably before the tax is due.

There is already a “Time To Pay” (TTP) scheme which is operated by HMRC, and as part of a support package announced during the March 2020 budget, it was confirmed this will be “extended” to give more companies assistance with their tax affairs. Time to pay arrangements that started before 20 March 2020 should still be paid.

For more information regarding the existing TTP scheme or if you’re struggling to pay your tax bill on time please contact the HMRC Time to Pay service.