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Suspension of VAT

21 March 2020

COVID-19

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The UK government announced on the 20th March  that VAT return payments are suspended for all registered businesses until the end of June 2020 

  • Businesses on quarterly VAT returns who are due to pay their 02/20 return by 7 April or their 03/20 return by 7 May or their 04/20 return by 7 June do not need to pay.  If a business submits monthly returns and the 02/20, 03/20 or 04/20 return is a payment, again no payment has to be made
  • This deferral applies also to those businesses who make monthly Payments on Account
  • There is no need to contact HMRC to request this deferral, as it a blanket policy
  • The unpaid VAT from this quarterly deferral will need to be paid to HMRC no later than the end of the financial year,  March 2021
  • If businesses pay VAT by direct debit, they should cancel the authorisation, as once VAT is paid to HMRC they cannot repay it
  • Although it was not specifically mentioned by the Chancellor, the non-payment of VAT will not count as a default.