Businesses that have taken advantage of the temporary VAT deferral scheme will soon need to take action on future VAT payments.
HMRC allowed businesses with VAT liabilities that were due for payment from 20 March to 30 June 2020 to defer those payments until 31 March 2021. This was claimed by simply not making payment, and many businesses will have done this by cancelling the direct debit with their bank.
Businesses will need to take action to reinstate their direct debit instructions for any VAT payments that fall due on or after 1 July 2020.
Businesses with a VAT quarter ending 31 May should move quickly to make sure they set up their direct debit in time for payment to be taken by the 7 July 2020 deadline.
HMRC advise that direct debits should be set up at least three days before payment is due. Failure to get the payment set up in time could result in it being late and penalties being incurred. The instruction can be set up in the online VAT account with HMRC. A link is below.
Internet link: HMRC Deferral of VAT payments due to coronavirus
Internet link: HMRC How to pay VAT by Direct Debit