If you pay your VAT by Direct Debit (DD) and want to take advantage of the current deferral opportunity there is action you must take.
The Government announced recently that any VAT payments from businesses that are due for payment from 20 March through to 30 June can be deferred until the end of March 2021.
Although HMRC said that his is automatic, businesses that pay their VAT liability via Direct Debit must cancel the DD instruction with their bank in order to take advantage of the deferral.
If the DD instruction is not cancelled HMRC will continue to take payment following submission of the VAT return – which must still be filed according to the usual deadlines!
Businesses that pay by other means won’t need to do anything except file their return, and HMRC will automatically ensure that payment for the relevant period is not pursued for the time being.
You will need to make sure that the direct debit cancellation is notified to the bank before it is next due. Banks typically need at least one day’s notice, but may be difficult to get hold of so if you do want to defer payment of your VAT please act now and get the direct debit cancelled.
It is also recommended that you cancel the direct debit instruction on your HMRC account, this can be done as follows:
Finally, the direct debit will need setting up again in the future.