Is your cashflow taking a hit due to Coronavirus? There are ways to help! Read the next installment to our specialist COVID-19 articles to find out more..
Deferral of VAT payments
The Government have also announced the deferral of VAT payments for 3 months from 20th March 2020 until 30th June 2020 to assist cash flow. All VAT registered traders are eligible. This will generally mean the deferral of one quarter’s VAT, the payments due on 7th April, 7th May or 7th June 2020 or the monthly payments due on each of these dates. This deferral will be automatic, however it is unclear whether HMRC will automatically suspend collection of direct debit payments of VAT during this period so we suggest that you cancel your direct debit mandate but remember to set it up again in due course. Businesses have until the end of the 2020/21 tax year to pay any VAT liabilities that accumulate.
VAT refunds and reclaims will be paid by the government as normal. Businesses should continue to file their VAT returns by the due date to avoid penalties.
Deferral of 31st July payments on account
Self-employed taxpayers will not be required to make the payments on account of their 2019/20 tax that are normally due on 31st July 2020. The tax deferred will still be due on 31st January 2021 together with the balancing payment for 2019/20.
No application is required and those affected will not incur penalties or interest on those payments.
Extra time to pay your tax liabilities
In addition to the deferral of VAT and income tax payment on account, businesses and self-employed taxpayers in financial distress as a result of Coronavirus, may be able to negotiate additional time to pay their taxes.
There is a dedicated HMRC helpline number 0800 0159 559 for you to ring, or we can contact them on your behalf. Before phoning HMRC it is advisable to have financial forecasts and a statement of assets and liabilities available. We can again assist you with this.
HMRC will usually expect to set up a regular monthly payment plan with collection by direct debit. Most HMRC debt management contact centre staff have authority to agree time to pay over a period of up to 12 months. Longer periods can be arranged but usually need to be escalated to senior HMRC staff.
Questions? We can help!
Get in touch with us today and let us help you and your business during these difficult times. Contact our Director, Nick Bonnello, directly on 0115 964 8860 or email him at firstname.lastname@example.org to utilise your free, 30 minute consultation and find out how we can help you across all areas of your business.
The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.