VAT, CUSTOMS AND INTERNATIONAL TRADE SUPPORT
VAT PAYMENT HOLIDAY
If you have any questions, please get in touch with our COVID-19 Task Force here
relevant as of 1:00pm 30th march
Chancellor Rishi Sunak announced that UK VAT registered businesses with VAT return liabilities owing during the period from the 20 March 2020 to the 30 June 2020 will be deferred. Businesses will have until 31 March 2021 to repay what they owe. HMRC will not charge interest or penalties on amounts deferred under this scheme. Certain monthly payments on account are covered within the deferral, although the interaction with your VAT return filing will need to be considered. It should be noted that this deferral does not cover VAT MOSS payments (i.e. VAT owing on certain sales in other EU Member States), nor will it cover the payment of import VAT obligations at this time.
Direct Debits should be cancelled to take advantage of the deferral, which will need to be set up again after the event. What’s great is that, beyond cancelling your direct debit, this is an automatic offer and will alleviate the burden of immediate cash flow concerns without having to go through any red tape or helpline to get it. It is said to be the equivalent of injecting another £30bn into the economy.
There’s no doubt that this provides businesses with much-needed cash. However, businesses would be wise to think ahead and place themselves in the best position once the deferral period has come to a close. See further VAT tips on how to maximise your VAT position links to here
It is important to recognise that, as things stand, businesses will be expected to continue submitting VAT returns during this period as usual. We anticipate that the deferred amount will be the VAT liability (i.e. VAT on sales net of any deductible input tax on expenditure) due in the designated period. One further point to note is that HMRC have confirmed that VAT reclaims and refunds will be paid as normal. Therefore, businesses which find themselves in a regular repayment position should not be affected by this announcement.
HMRC may consider on a case by case basis other measures to support your business, for example a temporary suspension of the monthly payment on account regime or seasonal adjustment of VAT return stagger periods. Get in touch if you would like to talk this through with Damian Shirley.
If you have had discussions with HMRC we would love to hear your feedback firstname.lastname@example.org
Support for Businesses Trading Internationally
The Government has announced specific DIT support for UK businesses that export or deliver goods and services abroad.
DIT will be able to provide assistance with Customs authorities to ensure smooth clearance of products into third countries, along with wider business continuity support whilst disruption is faced. For assistance, DIT’s business support team can be contacted here, or you can give them a call on 0300 456 3565.
If your international supply chain has been affected, then the DIT has also helpfully confirmed that it has relationships with a global network of businesses across the world and will support businesses in trying to keep the supply chains moving.
If your business is actually operating and delivering projects in other countries, it is important that you follow local guidance and speak to your nearest UK embassy or consulate. The Government also refers businesses to its general advice on overseas business risk in a number of overseas territories. A link to the Government’s extensive country-by-country guidance can be found here.
In addition to the wider support packages already announced by Government, UK Export Finance (UKEF) will be working with banks and insurance brokers to support businesses in fulfilling their export contracts. It will facilitate guarantees, loans and insurance on behalf of the Government that will protect the export supply chain. Specific examples cited include:
Assisting with cash flow through a government back working capital scheme;
Insurance policies to support aborted contracts outside of your control; and
Support the facilitation of finance for overseas buyers so they can continue to buy your goods and services.
Should you need to discuss matters further with UKEF, then they can be contacted here.