The VAT Payment Deferral Period is Ending

The option to defer VAT payments was brought in by HM Revenue & Customs to support businesses who were unable to make their VAT payments on time, without incurring any penalties.  This meant that any payment of VAT falling due between 20 March and 30 June 2020 could be deferred until 31 March 2021.  With 30 June 2020 fast approaching, this deferral period will be ending and any VAT returns with a payment due date after 30 June 2020 must be paid in full and on time.

If you historically made your VAT payments by Direct Debit, then in order to defer any payments, you had to cancel your Direct Debit.  From 1 July 2020, in order to make your VAT payments you must reinstate the DD. HMRC advise that you do this at least 3 working days before submitting your VAT return in order for HMRC to take payment.  You can reinstate your direct debit by following the link below:

https://www.gov.uk/pay-tax-direct-debit

Please note that if we complete your bookkeeping for you, we will not be able to use our Government Gateway account to reinstate this Direct Debit. If you have your own Government Gateway account, you should use this.  However, if you do not have an account then you will have to create one in order to reinstate the Direct Debit.

If you do not pay by Direct Debit then any payments due after 30 June 2020 should be paid on time as usual via your normal payment method e.g. Online BACS payments.

Any payments that you have deferred between 20 March and 30 June 2020 will need to be paid in full by 31 March 2021 in order to avoid any penalties.  If you prefer, you could pay any outstanding liabilities in stages between now and 31 March 2021 by making additional payments along with your subsequent VAT returns.

If you are still unable to pay your VAT liabilities after 30 June 2020, then you may be able to come to an arrangement with HMRC under the ‘Time to Pay’ scheme. HM Revenue and Customs ‘Payment Support Service’ can be contacted on 0300 200 3835.