Deferred VAT and Income Tax payments
Good news from the Chancellor on tax payments should help soften the blow of the Covid-19 outbreak writes James Haywood from the Page Kirk audit department.
As part of the Government's ongoing help through the coronavirus crisis, the Prime Minister Boris Johnson and Chancellor Rishi Sunak announced on Friday 20th March at their daily press conference that all businesses in the UK are able to defer any VAT return payments due from 20/03/2020 to 30/06/2020.
This new initiative will require no application, is automatic and is available to any business that is VAT registered, as well as individuals and not-for-profit organisations.
Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any VAT owed during the deferral period. Any VAT refunds incurred during the deferral period will be paid by the government as normal.
It is important to note however that you are still required to submit your VAT returns on time during this period. Also if you normally pay by direct debit should cancel this with your bank if you are unable to pay. Please ensure that this is done in sufficient time, ideally before the VAT return submission, so HMRC do not attempt to automatically collect any VAT to be paid over on receipt of your VAT return.
If you are self-employed, income tax payments due in July 2020 under the self-assessment system will be deferred to January 2021. Once again if you normally pay this by direct debit then you should cancel this with your bank if you are unable to pay. Please ensure that this is done in sufficient time so HMRC do not attempt to automatically collect any income tax instalments.
These are challenging times. We expect more government announcements in the coming days. We will add more details to our website as they become available.
If you need any more information, please contact us 0115 955 5500 or email enquiries@pagekirk.co.uk.