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VAT Payment Holidays End on 30th June

VAT

VAT payment holidays have formed an important part of the Government’s support package for businesses during the Coronavirus crisis, providing a short-term solution for companies experiencing cash flow problems due to the virus. The VAT payment holiday window closes on 30th June, and businesses need to pay VAT on the normal due dates from 1st July.

The good news is that HMRC are aware that many businesses are still struggling, and should be sympathetic if you can’t pay on time due to the impact of Coronavirus. So, what should you do if you need additional time to pay?

Payment Support Service (PSS)

If you can’t pay on time, it’s important to contact HMRC’s Payment Support Service (PSS) before the VAT is legally due for payment. If you wait until the payment is overdue, any time to pay agreement will be subject to a default surcharge.

You’ll need your VAT number and bank account details when you call, as well as details of why you can’t pay on time. Your request will often be better received if you’re able to make a partial payment on time, rather than asking for the whole of your liability to be deferred.

You can call the PSS on 0300 200 3835, 08:00 – 16:00 Monday to Friday

How much time will you have to pay the ourstanding VAT?

There is no blanket policy on how much time HMRC will give you to pay. They will expect you to establish how much you can afford to pay and when, and then justify this in your request.

If you’ve missed a payment or filing deadline due to coronavirus

Where you’ve missed a payment or filing deadline, penalties may be waived if you have a “reasonable excuse”. HMRC has amended their guidance to include the impact of Coronavirus in their definition of a reasonable excuse:

“HMRC will consider coronavirus as a reasonable excuse for missing some tax obligations (such as payments or filing dates). Explain how you were affected by coronavirus in your appeal. You must still make the return or payment as soon as you can”.

If you’re notified of any HMRC decision dated February 2020 or later, you now have an additional 3 months to appeal if you think the decision is wrong. This is an acknowledgement that many businesses might have missed appeal deadlines while key staff were working remotely.

If you have deferred VAT during the payment holiday window

If you’ve taken advantage of the VAT payment holiday window, you have until 31st March 2021 to pay the deferred VAT and your cashflow planning should reflect this.

If you usually pay by direct debit, you should make sure your direct debit mandate is reinstated with your bank after 30th June.

If you have any questions or if we can help in any way, please contact our expert team on 0129 468 483 or email info@orangegenie.com.  

 

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