VAT AND INCOME TAX DEFERMENT

Support for businesses through deferring VAT and Income Tax payments


***Urgent update 26.3.20

Businesses that wish to defer their VAT payments need to take urgent action to cancel any direct debit mandate that is in place.

HMRC has now confirmed that it will not automatically cancel collection of VAT payments by direct debit. Businesses that have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank to cancel that mandate. This needs to be done before the direct debit is due to be collected.

Businesses will also need to remember to reinstate their direct debit mandate once the deferral is over and to make arrangements to pay the accumulated VAT by the end of the 2020/21 tax year.

Agents cannot set up direct debit mandates on behalf of clients.

More information on paying a VAT bill is available on gov.uk.


HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.


VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.


Eligibility

All UK businesses are eligible.


How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.


Income Tax

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

 

Eligibility

If you are self-employed you are eligible.


How to access the scheme

This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period.
HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.