Stopfords
Stopfords

Reinstate VAT Direct Debits

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The deferral of VAT payments due to COVID-19 is coming to an end on 30 June and action will need to be taken to reinstate your VAT direct debit.

The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021.

We are reminding businesses that they need to take steps to reinstate their VAT direct debit so this is in place in time for payments due in July 2020 onwards.

We believe HMRC will issue guidance at the end of the VAT deferral period. Any outstanding returns should be filed and the direct debit will usually need to be set up three working days before a VAT return is filed.

Please note we cannot set up the VAT direct debit on behalf of our clients therefore the business needs to set up the direct debit through their business tax account.

HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit is reinstated. HMRC has made the necessary changes to avoid this happening for businesses in MTD for VAT.

Arrangements will also need to be made to pay the deferred VAT by 31 March 2021; we are currently waiting further guidance from HMRC.

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