The VAT deferral scheme, which allowed businesses to defer VAT payments, will not be extended, meaning that all payments will need to be made in full and on time from 1 July.
Launched as part of the government’s response to help businesses through the coronavirus pandemic, the scheme allowed UK VAT-registered businesses to defer VAT payments between 20 March and 30 June 2020.
This applied to monthly VAT return payments ending in February, March and April as well as payments on account and annual accounting advance payments due between 20 March and 30 June.
The tax authority also said that it would not charge interest or penalties on any amounts deferred as a result of the policy.
Some struggling firms hoped that the scheme would be extended beyond the end of June, but the government website confirms that it will come to an end. This means that from 1 July, HMRC expects all payments, including VAT, PAYE and corporation tax to be made in full and on time.
The tax authority may also resume chasing arrears from the start of July.
If you participated in the VAT deferral scheme, you will now need to:
Any VAT payments you have deferred between 20 March and 30 June should be paid in full on or before 31 March 2021. You can make additional payments with subsequent returns.
Tom Fox, Licensed Insolvency Practitioner at Umbrella Insolvency said: “The VAT deferral scheme has been a lifeline for some businesses that are battling to remain solvent. Unfortunately, while income support schemes have been extended, VAT-registered businesses in need of support have had no such luck.
“If any businesses will struggle to make upcoming tax payment deadlines, it’s vital they speak to HMRC as soon as possible and, depending on the circumstances, it may also be worth reaching out to an insolvency professional.”
To learn more about company insolvency support, speak to a member of the Umbrella.UK insolvency team today. Call: 0800 611 8888.