Are you up to date with COVID-19 VAT changes?

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The chancellor recently announced a new raft of VAT changes to help businesses navigate COVID-19, here are the main changes:

“On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.
Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest-free.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Those that can pay their deferred VAT can do so by 31 March 2021.”

This could be a vital cashflow boost for struggling businesses but beware of storing up cashflow issues later down the line. Pay now, or pay later, remember it’s still a debt and will need to be paid. Speak to your accountant to fully understand your position.

Also, the temporary reduction of VAT for businesses in the hospitality sector has been extended and will now stay in place until 31st March 2021 for eligible businesses.

Will the changes in VAT help your business?

#VATChanges #VAT #HMRC

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