Additional VAT Deferral Scheme measures introduced on 24th Sept 2020
The Government has brought in further measures allowing business to defer certain VAT payments.
What is the VAT deferral scheme?
Earlier this year, the UK Government introduced the VAT deferral scheme, which meant that traders with VAT payable between 20th March 2020 and 30th June 2020 could defer their VAT payments until 31st March 2021, at which point any outstanding VAT would need to be paid in full.
The scheme was one of a number of measures introduced by the UK Government, in order to help traders facing hardship during the COVID-19 pandemic.
Which VAT return periods were covered by the VAT Deferral Scheme?
VAT returns periods starting from Feb 2020 (due 7th April 2020) through to April 2020 (due 7th June 2020) were covered by the Scheme.
What are the new measures introduced on 24th Sept 2020?
The UK Government has now brought in further measures, which will effectively extend the deadline for the payment of the deferred VAT (only) beyond 31st March 2021 and will also allow traders to break down their deferred VAT payment into 11 smaller payments, which can then be paid over the course of the 2021-22 tax year (1st April 2021 to 31st March 2022).
How should VAT payments outside of the Feb 2020 to April 2020 VAT periods be dealt with?
Unfortunately, VAT payments due before 1st March 2020 or after 30th June 2020, must be paid by their normal due dates (1 month and 7 calendar days after the VAT period end) e.g. May 2020 VAT return would be due by 7th July 2020 and so would not be covered by the VAT Deferral Scheme.
Verfides will continue to keep you updated with any developments. In the meantime, please do not hesitate to speak to your usual Verfides advisor for further assistance, or email or call the Tax Team: tax_team@verfides.com; call +44 20 7930 7111.
This document has been prepared as a general guide and is based on the latest legislation and guidelines. Whilst every care has been taken in its preparation, Verfides cannot accept any responsibility for any person relying on this publication.