VAT Payments Update - Cancel your direct debit with the bank
As part of the government's overall support for business, VAT payments due before 30 June 2020 will not now need to be made until end of the tax year 2020/2021, i.e. 5th April 2021.
The payment for the quarters ending February 2020, March 2020 and April 2020 all falls within this time frame and therefore you do not have to make the payments if you choose not to so.
All UK business are eligible. This is an automatic offer and no application is required.
Your VAT Returns need to be submitted as per usual and you will be familiar that once the VAT Return is submitted, HMRC will attempt to collect the liability via direct debit if you have this in place. Therefore, it is our recommendation that you cancel the direct debit and conserve the cash.
Businesses that have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank directly and give instructions. 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. Agents cannot set up direct debit mandates on behalf of taxpayers.
Of course, the VAT liability will have be paid in a year’s time but at least it buys you time to plan.
Myers Clark can assist you in completing a cash-flow forecast to give you some idea of what your overall position is looking like.
Please call us and speak to your normal relationship director/manager if you would like to discuss any of the above or any other matter. We are here to help you through these tough times.
Above all - Stay Safe