The statement from the Chancellor at the Government Press Conference last Friday evening (20 March 2020) provided cashflow assistance in the form of a VAT Deferral Scheme that will be widely appreciated by the business community and may well reignite some well needed confidence which had missing for the whole of the previous week.
On top of the wage contribution that is covered in another post, The Chancellor has provided a VAT deferment which will apply from 20 March to 30 June 2020. It is open to all UK businesses. This means that every UK business that is VAT registered will be able to miss one payment on its usual due date with the liability being paid before 31 March 2021 which is the end of the Financial Year.
If you are a business that receives a refund each quarter or have a refund for the quarter concerned then the VAT Return should be submitted as normal and the refund will be settled.
Some businesses will think that this means that they don’t have to do their VAT return leaving it until next March. I wouldn’t expect this to be the case and I don’t think that this is a sensible approach. If we are planning for our cashflow we need to know how much this deferred liability will be. For many businesses bookkeeping will be completed as normal so a number will be calculated but in situations where books are completed quarterly to identify the VAT bill we recommend that this process continues so that the records show the continuity that you will need.
If you need to discuss the VAT Deferral scheme in more detail please contact your local Lambert Chapman Partner.
(Important Notice – Details correct at time of publication. It is recommended that you check the GOV.UK website for the very latest information)
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.