Updated 27 March 2020
With immediate effect payment of VAT liabilities due up to 30 June 2020 may be deferred. Businesses do not need to apply for this. This means that it will apply for VAT quarters ending February, March and April 2020.
Businesses can choose to pay the VAT liability as normal, but if they wish to defer payment it will be applied automatically. The deferred liability will need to be paid by 31 March 2021.
Businesses that usually pay the VAT by direct debit and wish to take advantage of this deferral offer will need to cancel the direct debit with their bank in good time before the usual payment date.
Self-Assessment payment due on 31 July 2020
The second payment on account due on 31 July 2020 may be deferred until 31 January 2021. There is no need to apply for this deferral and no interest or penalties for late payment will be charged if you defer payment until 31 January 2021.
So, if we have previously advised you of a self-assessment tax payment due on 31 July 2020 and you are not currently able to make the payment, the deferral will automatically apply. This should allow everyone to calculate and pay the balance of their actual tax liability for the year on 31 January 20201 rather than the usual payment on account which is based on the previous tax year. As many businesses will have lower profits or possibly losses in the current 2019/20 tax year this will benefit many self-employed taxpayers.
This deferment of payment is in addition to the Time to Pay measures already announced in the Budget 2020. As a reminder the HMRC helpline for asking for Time to Pay is 0800 0159 559.