To provide government support during the early stages and peak of the COVID-19 pandemic, HMRC gave businesses the option to defer VAT payments if they were unable to pay on time. They could do this without incurring late payment interest or penalties. Under the scheme, payment of VAT due between 20 March and 30 June could be deferred until 31 March 2021.
VAT deferred through the scheme can be paid through ad hoc payments and overpayments ahead of the deadline if preferred, so long as full payment is made by that date. As planned, the scheme came to an end on 30 June. Businesses now need to set up any cancelled direct debits in time for payment of their next VAT return.
Further information can be found on GOV.UK. If you are VAT registered, you can sign up to Making Tax Digital to experience the productivity benefits of using digital tools. To find out more visit GOV.UK.