To manage the COVID-19 pandemic the government has taken several financial measures and commitments. According to Chancellor Sunak, the commitments are ‘unprecedented measures for unprecedented times’. Mr. Rishi Sunak on March 17 has announced to defer the next quarter of VAT payments for firms in a £30 billion injection into the economy which is equivalent to 1.5% of the GDP. The deferment is adjourned from 20 March to 30 June 2020, where no businesses in the UK are obliged to pay any VAT and no interest will accrue in the meantime. All foreign companies with a UK registration are eligible for the deferment. However, Mini One-Stop-Shop (MOSS) payers are not included in the scheme.

Due date for your VAT payments 

In the Downing Street press conference on March 17, Chancellor Sunak said: ‘To help businesses pay people and keep them in work I’m deferring the next quarter of VAT payments, that means no business will pay any VAT from now until the end of June.

The VAT is then due at the end of the 2020/21 tax year. The deferment will be benefiting 2 million VAT payers in the UK for the next quarter with no interest or penalties. For all the UK monthly payers, the due to be paid to the HMRC  ends on 31 March 2021. Whereas for the quarterly VAT payers, the date will be  provided by their VAT stagger deadlines. 

The non-eligible payers of the scheme

The Mini One-Stop-Shop (MOSS) VAT payers are not eligible for this deferment scheme. They have to continue to pay the VAT payments to the HMRC as the conventional payment method and time. Failure to the payment will include interest and penalties. 

Payment procedures and penalties

The VAT payment count will start shortly after the end of this June and procedure for the payment will be converted to the new MTD automatic measures. Businesses will not be able to follow the manual procedures. 

Initially, the new Making Tax Digital (MTD) method is backed up by the threat of penalties. Payment procedure of the VAT recording and return preparation must be digitised by the taxpayers. Which refers, businesses will face penalties if not complied with the new digital recordkeeping and ‘digital journey’ requirements.

To learn more about the newly adapted procedure, contact Taj Accountants, Accountants in London or Small Business Accountants. 

 

VAT payment for the Foreign Businesses

Non-Established Taxable Persons Unit (NETPU) in HMRC's Aberdeen office has declared that the foreign businesses with a UK registration are entitled for the deferment scheme. 

This global pandemic has rattled the world and left the government to seek new ways to help the wounded economy. Taj Accountants understands your concern and is always there to provide you with all the upcoming  financial news. Read our blogs for more financial benefits provided by the government. 

FAQs: 

1. Who can defer payment?

You can defer payment if you are:

• an importer
• an owner of goods in warehouse or free zone
• an agent (including warehousekeepers) who enters goods for importers or owners
• If you’re a foreign company and UK registered.