VAT Deferral - does your business need cash flow??

On the 20th March 2020 the Chancellor announced a VAT payments deferral to support businesses with cash flow during the COVID-19 pandemic.

This means that all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 3‌0‌‌ June.

You therefore have until 3‌1‌‌ March 2021 to pay any VAT deferred as a result of this announcement.

You do not need to inform HMRC if you wish to defer payment. You can opt in to the deferral simply by not making VAT payments due in this period. If you pay by Direct Debit you should cancel this with your bank. You should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.

Should you wish, you can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. You must continue to submit VAT returns as normal.

REMEMBER this is not a grant it is a deferral (or simply put a "loan"). You WILL have to eventually pay your VAT dues for the stated periods but not until March 2021. Dependent on your current trading situation this may or may not be the best course of action for you. If trading is poor due to the current situation then freeing up some cash flow could be what your business needs to survive!

If you wish to discuss your options further please contact us - info@jdkbusiness.co.uk