The government has announced that they will defer Value Added Tax (VAT) and Income Tax payments for six months.

VAT

Under the guidelines, VAT payments due before 30 June 2020 will now not need to be made until the end of the tax year. No applications are needed and HMRC have confirmed that direct debits need to be cancelled. Returns are still to be filed on time. There will be no penalty charges for late payment during the deferral period.

Income Tax

Self-assessment payments on account due on 31 July 2020 will now not need to be made until 31 January 2021. This applies to the second payment of accounts that will be due to HMRC. Again, no application is required to take up this offer. This deferral applies to all taxpayers. Self-assessment returns should still be filed by their due date and it may be advantageous to file the 2019/20 return as soon as possible after 5 April 2020.

Additional information can be found here:

https://www.icaew.com/insights/tax-news/2020/mar-2020/covid19-vat-and-self-assessment-payment-deferral

In the meantime, the Government has provided other avenues of support for businesses who are impacted by the COVID-19 crisis. Please see here for details.

Disclaimer

Please note this is the guidance as we understand at the time of the announcement. As you are aware, the information is changing on a daily basis and we cannot be held responsible if the advice or guidance changes or if our interpretation does not subsequently prove to be correct.

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