CV19 VAT Payment Deferral Scheme

00:00 -  So if you are VAT registered, what are the rules now under this covid19 special announcements of the chancellor has been making? So the first thing is,  the chancellor has made an announcement 20th March to support businesses affected by this Covid 19 pandemic. We all know it's really serious.

00:22 -  We're all taking it seriously. We are all self isolating and, that will hopefully stop the spread and will hopefully reduce the height of the curve and help the NHS Cope and save NHS and other people's lives and, it'll reduce the pressure on the economy and the people who are helping us on the front line.

00:47 -  So that's really good. So, let's look at VAT for small businesses. in fact, all businesses that are, that registered, you have the option now to defer the VAT payments

01:00 -  that are due from, 20th March to 30th June. So is there any back payments due? Probably for the, for the February quarter, because that would be due in the end of March.

01:11 -  So for, VAT due between 20th March and 30th June. So those are the periods. So June will be the May quarter. So you go up the February quarter, the March quarter, and the April quarter, and the May quarter that are covered by this announcement. Okay. So that's in the next few months, only at the moment and may be extended, but right now it's only for those months.

01:43 -  So for those months, you have until March, 2021 to make the VAT payment. Okay. So you can defer the VAT from now until March, 2021. There's going to be no interest in, no penalties. You do not 02:00 -  have to inform HMRC if you want to defer the payment. You did not need to do that, we thought you had to call them and agree that, but you don't have to do that.

02:10 -  You can opt into the deferal system by simply not making the payment due for the period. However, you must submit the VAT return. Now, some of you have a who've got good cashflow, which is a good thing. We like good cashflow. Cashflow is a lifeline of business. For those of you who have got good cashflow, you've probably set up a direct debit to make sure that as you submit your VAT return, HMRC can take the money.

02:38 -  So you must cancel this with your bank. So sometimes you can go into online banking, sometimes you need to contact your bank. You should also write to HMRC to ask them to cancel the direct debit. So just cover all the bases. There's no point you could call HMRC as well, but it's very difficult to get an answer from HMRC within an hour or two because they're just so overwhelmed with people calling them.

03:04 -  So,  you don't just don't make the payment. Please stop the payment from your bank to HMRC if it's going by direct debit as you submit the return and,  you should make sure you do that in sufficient time. So now's a good time. Now's a good time to make sure that you don't make an automatic payment because it's coming to the end of the month.

03:25 -  You're going to be submitting your VAT returns. Just make sure you don't submit your VAT Return. It doesn't matter if you've been doing your VATreturns on time every time there's going to be no penalty anyway. So do not submit your VAT returns unless you have you canceled. your  direct debit and you are comfortable that the instruction to cancel the direct debit has reached your bank in time, and please do that.

03:49 -  Because otherwise as you submit your VAT return, that HMRC will try to collect it. And so you wanted, you wanted a, you want to stop that. If you want to make payments as normal than you can during this period and know that the revenue's commoner turned down your money. And, if you all do a repayment, HMRC will pay the repayments claims as normal, as normal.

04:12 -  Maybe you slept wait a couple of months while they, I'll show you some questions. If it's an unusual repayment. There was a usual, um, we payment for you because you off the top of business, it gets repayments on a regular basis because of the type of trade you are in. Then, then you, you will be fine.

04:30 -  But you must submit VAT returns as normal. Remember, you're allowed two Late returns a year. Know, and, and if you have to Late return, then you have to have a full, year, four quarters on time to clear or record. So this one, if you're on time, you can get this one late when you cancel your direct debit.

04:51 -  But in the meantime, just submit them on time. There's no point. Delaying submitting a VAT return. Because if you 05:00 -  do delay the submitting the VAT return, you will end up with penalties. They're not, they're not giving you any scope of mat, are helping your cashflow, not your administration. Okay. So hopefully that helps.

05:12 -  This is Gordon D'Silva from Gordons Knight wishing you well, keep healthy, keep strong, and just keep on top of the paperwork. For now. The paperwork may reduce a little bit in the coming months as trade diminishes for awhile. So just bear in mind that we still need to keep the paperwork up to date.

05:32 -  So I look forward to helping you and advising you on in the coming weeks and months. just look out for some more blogs on different topics. This one was on VAT, so please follow the steps. There is a checklist you can download from our sites. please feel free to do that. All right. The, the, the link will be on our useful links.

05:54 -  Gordonsknights.co.uk/usefullinks. And on that, just look for the codvid19 links. Okay. Take care. All the best. Goodbye