As part of the Government’s package of Coronavirus support, the chance for a VAT deferral was offered to businesses with VAT to pay between 20th March 2020 and 30th June 2020. This liability can be paid at any time up to 31st March 2021.
There was no need to let HMRC know that you were going to defer your payment, and the only action required was to cancel your Direct Debit so the payment wasn’t automatically collected.
As the deferral period came to an end, it was important that businesses set up a new Direct Debit mandate, to enable future payments to be collected.
Given the situation at that point, with many businesses rushing to reopen with Coronavirus adjustments such as PPE and social distancing, it’s not a surprise that many didn’t get a new Mandate set up!
But there are steps you need to take NOW to avoid problems with HMRC later…
- A new Mandate has to be in place THREE working days before you submit the VAT Return for HMRC to draw payment against it. If you miss this cut-off, you will need to make a manual payment. The bank details to use are as follows:
Sort Code: 08-32-00
Account Number: 11963155
Account Name: HMRC VAT
You will need to use your 9-digit VAT number for the reference.
- If you took advantage of the VAT deferral for the period above, and make a manual payment for the next payment, HMRC will automatically allocate it WRONGLY!HMRC will allocate the manual payment to the oldest, deferred liability, and will start chasing you for the most recent amount due. Their records will show it as unpaid.The only way around this is to call HMRC and tell them they need to reallocate the most recent payment. The telephone number is as follows:
Tel: 0300 200 3700.
You will need to quote your 9-digit VAT number, the amount you paid, and the VAT Return period (Quarter ended date).
- Make sure you’ve set up the new Direct Debit now, well before you have to repeat this process for next quarter. You can find all of the instructions here.
All VAT payments must now be made as due, but if you’re struggling to do so, you can contact HMRC to request a Time to Pay arrangement. If Coronavirus is the reason why you cannot pay, call the HMRC Coronavirus Helpline, ideally before the amount is due. The details you will need are as follows:
Telephone Number: 08000241222
Opening Hours: Monday to Friday: 8am to 4pm
That should give you all the information you need to avoid any problems with your VAT liabilities, but as ever, if you have any questions or problems, please get in touch.