Deferring VAT and other tax payments
Covid 19 – Business support
Cashflow management is a major factor for the survival of many businesses during this difficult time. The government have announced a number of measures to defer tax payments due to HMRC to help you manage your business and personal tax. For full guidance click here.
1. VAT
The deferral will apply for VAT quarters from 20 March 2020 until 30 June 2020.
Eligibility
All UK VAT registered businesses are eligible.
How to access the scheme
The deferral 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.
If you usually pay your VAT liability via direct debit, no payments should be taken during this period. We advise that you cancel any direct debits to be sure. These can be reinstated once the business is in a better cash position.
2. Income Tax – Payments on account delayed until 31 January 2021
For Income Tax Self-Assessment, payments on account usually due on the 31 July 2020 will be deferred until the 31 January 2021.
No penalties or interest for late payment will be charged in the deferral period.
Eligibility
If you are self-employed you are eligible.
How to access the scheme
This is an automatic offer with no applications required.
3. Time to pay arrangements
Time to pay arrangements are available to spread the payment of outstanding tax liabilities when a business is in financial difficulty.
HMRC have relaxed their Time to Pay offer to all businesses and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
Time to pay arrangements can be used in addition to the deferrals noted above and you should contact HMRC at the end of the deferral period if you are still unable to pay.
Eligibility
You are eligible if your or your business:
- pays any taxes to the UK government including VAT, corporation tax , income tax and PAYE
- has outstanding tax liabilities that it will be unable to meet by the normal deadline
How to access the scheme
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.
If you’re worried about a future payment, please call us nearer the time.
