HMRC’s announcement will be a great help to many but you need to act now to Defer Q1 UK VAT Payments due to Covid-19 before this will be of real help.
HMRC have amended their initial guidance regarding the deferral of VAT liabilities. The latest information is that taxpayers should cancel any Direct Debits (DD) with HMRC for VAT payments and more details are available at https://www.businesssupport.gov.uk/vat-deferral/.
The problem
Given that cash is king there seems to be a real risk that if you do not cancel your DDs the system will still go ahead as usual and collect any VAT liabilities falling due on the Q1 returns. So although HMRC have allowed the deferral we still need to act now to Defer Q1 UK VAT Payments. It seems they can’t close down the payment collection machinery at their end.
The timing of all of this is awful given that we were all getting organised for MTD and having payments via DD is a sweet solution. To achieve this happy situation of not having to worry about making payments on time we know a lot of our clients have had to overcome problems getting MTD and DDs meshed together. Having to unravel it all again now is not ideal but there again nothing is right now is it?
Of course we will all have to save up through the coming year to meet the liability by March 2021 but in the interim cash will be king for all of us.
If you’re not sure about anything please give us a call, despite everything it is business as usual for us. Stay safe!