COVID-19 – Business Support – VAT Deferral Update

As part of the basket of measure the Chancellor announced to support businesses impacted by COVID-19, there is the opportunity to defer VAT payments as an aid to business cash flow.

All UK VAT-registered businesses have the option to defer VAT payments due between 20th March and 30th June.  In practical terms, for businesses making quarterly returns, this means the VAT due on the February, March and April VAT returns.

During this period, businesses must continue to submit their VAT returns as normal.

If you opt to defer your VAT payment, the payment deadline is 31st March 2021.

There is no requirement to notify HMRC of your decision to defer the VAT.  This will effectively be done by not making VAT payment or payments due in this period. 

However, if you pay by Direct Debit, you should cancel this with your bank as soon as is possible.  HMRC cannot guarantee that their collection protocol will not try to automatically collect on receipt of your VAT return.

You can continue to make VAT payments during the deferral period and if you would prefer to pay by BACS rather than Direct Debit to control the timing of the payments, the HMRC bank details are as follows:

Account Name:              HMRC VAT
Sort Code:                     08-32-00
Account Number:          11963155    
Payment Reference:     Business VAT Number

HMRC will be continuing to process and pay any repayment claims in the usual manner.