Since HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19) last week, SME businesses have started getting support to delay payment of their VAT and PAYE liabilities. Some have reported that HMRC is not asking for or only requiring minimal evidence and extending their payment deadlines for the foreseeable future.

VAT Deferral
All UK VAT registered businesses, including charities, can defer VAT payments due with their VAT returns between 20 March 2020 until 30 June 2020. No UK VAT registered business will have to make a VAT payment alongside their VAT return to HMRC in that period. Normal VAT payment due during this period are 7 April, 7 May or 7 June 2020 or the monthly payments due on each of these dates.

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.

The deferral is only for the VAT payment, businesses are supposed to file the VAT returns by normal due dates. Smaller companies with direct debits to pay VAT to HMRC will also need to cancel these immediately otherwise the money will be deducted automatically. The Treasury said it
could not cancel them unilaterally.

Smaller companies with direct debits to pay VAT to HMRC will also need to cancel these immediately otherwise the money will be deducted automatically. The Treasury has said it could not cancel unilaterally or cancel direct debits. Instead HMRC must not be collecting the direct debit on the normal VAT due date when the business submits the VAT return.

Businesses will be receiving all VAT refunds as normal.

Currently VAT payments are deferred until 30 June 2020. Guidance indicates that 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, i.e. 5 March 2021 (unincorporated businesses) or 31 March 2021 (companies). It is very much likely to get further extension if the cash flow and the effect on business is unable to support these payments.

The non-payment of VAT will be ignored for any VAT default surcharges and interest calculation.

Businesses making monthly payments for annual accounting scheme do not need to make any payments until 30 June 2020. As the monthly payments does not start until the end of month 4, businesses will eventually be catching up payments after June 2020.

You must make advance payments towards your VAT bill (either monthly or quarterly) during your accounting period and a final payment when you submit your VAT Return.

The helpline allows any business or self-employed individual who is concerned about paying their tax due to coronavirus to get practical help and advice.

If you run a business or are self-employed and are concerned about paying your tax due to coronavirus, you can call HMRC’s helpline for help and advice: 0800 0159 559

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

• agreeing an instalment arrangement

• suspending debt collection proceedings

• cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately The helpline number is 0800 0159 559 – and is an addition to other HMRC phone contact numbers.

The helpline is open from Monday to Friday 8am to 8pm, and Saturday 8am to 4pm (excluding bank holidays).

Other HMRC business payment support contact details can be found here.