COVID-19 and the effects on VAT Funding
The global pandemic has caused major social and economic disruptions. As such, the government has announced a large and wide-ranging package of financial measures to try and cushion the effects on both people and businesses at large.
As you will already be aware, one of the measures put in place was the VAT payment deferral measures. Deferral of VAT payments were rolled out by the government to support businesses with cash flow during the pandemic between 20th March 2020 – 30th June 2020.
Consequently, If you’re a UK VAT-registered business that uses the government deferrals of VAT, you have until 31st March 2021 to make the payments. Until then, HMRC will not make any penalty charges or interest on pending VAT payments that you have payments you have deferred between 20th March and 30th deferred.
However, any VAT payment should be paid in full on or before 31st March 2021. In order to do this you must;
- set-up cancelled Direct Debits in enough time for HMRC to take payment
- continue to submit VAT returns as normal, and on time
- pay the VAT in full on payments due after 30 June
What you need to do to get VAT funding
If you have cancelled your Direct Debit to HMRC to take advantage of the deferral, you will need to set up a new Direct Debit arrangement in time for the first payment after 30th June.
Payments due after 30th June must be paid in full as normal and you must continue to file your VAT return on time.
Paying the tax that you have deferred
If you choose to defer your VAT payment as a result of coronavirus, you must pay the VAT on or before 31st March 2021.
Businesses can start to make payments towards your deferred VAT now or on an ad-hoc basis any time now and then.
How to get help
If you need more help to pay your VAT, you may be eligible to get support with your tax affairs through HMRC’s Time To Pay (TTP) service. This allows you to pay off your debt by instalments over a period of time.
Getting back into the swings of VAT payment may be confusing and hard to maintain, particularly after a period of deferral. At JPM capital, we can advise you on your VAT payments and our specialist VAT funding facility can effectively help turn a quarterly payment into a monthly payment in arrears. Our team can deal with all the necessary red tape and information required to process applications, saving you time to focus on your business needs!
With a dedicated account manager who can handle your VAT applications from start to finish, you can rest assured knowing your VAT payments are dealt with on time and on a regular basis.
For more information, sign in our contact form or give one of our friendly staff a call today. You won’t regret it!