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Has the VAT deferral scheme been extended?

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Anyone know if the VAT defferal scheme has been extended beyond June 20? 

I've got a client who's VAT is due 7/12 and has no income as she has had to shut up shop due to latest lockdown. Theres loads of info relating tho the original scheme but I cant find anything with guidance for the current lockdown.  

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chips_at_mattersey
By Les Howard
23rd Nov 2020 11:19

I don't think you can use the existing deferral scheme for VAT due on the October Return. You will have to use the usual time to pay process and ask for terms.
This is the link to the deferral scheme: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-...

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Jason Croke
By Jason Croke
23rd Nov 2020 11:50

There was no extension, other than the initial deferral offering.

A return due 07/12 suggests a return covering the period Aug-Sep-Oct 2020. The lockdown was with effect November 2020 and so this return covers a period when business was, presumably open/trading.

You still have the Business Support Service option, to arrange a "time to pay" this 07/12 return. https://www.gov.uk/difficulties-paying-hmrc

Now is the time to discuss cashflow and funding options with the client. Using the VAT to cover running costs during shutdown makes sense, but it is not a good practice to get into, relying upon the VAT (that doesn't belong to you), to fund the business can spiral.

What happens if there is another lockdown? A time to pay agreement may be over 3-9 months, but if there is another lockdown covering the next VAT return period, rolling that into another time to pay may only make matters worse, so I'm not saying the client shouldn't use the VAT to fund the business, but just to think a little longer-term as VAT debts can clock up quickly.

Has the client explored all the other government assistance available such as loans, grants, furlough?

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Replying to Jason Croke:
wolfy
By rob winder
23rd Nov 2020 13:31

Thanks for your response, I agree with everything you have said.

The problem is that you and I would operate in this manner but a large number of businesses live hand to mouth. The client in case has also had to operate at 50% capacity over the three month whilst having 100% overheads still.

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Replying to Jason Croke:
wolfy
By rob winder
23rd Nov 2020 13:31

Thanks for your response, I agree with everything you have said.

The problem is that you and I would operate in this manner but a large number of businesses live hand to mouth. The client in case has also had to operate at 50% capacity over the three month whilst having 100% overheads still.

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By New To Accountancy
23rd Nov 2020 13:31

Already answered in great detail for you but I've had the same request from a client. Result was a TTP arrangement. HMRC were flexible and the call was over pretty quickly according to my client, no hefty income and expenditure required either.

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Replying to New To Accountancy:
Jason Croke
By Jason Croke
23rd Nov 2020 13:45

HMRC have always been pretty helpful with time to pay agreements, possibly even more so now with Covid19.

Initial requests are quick and don't require much more detail than "this is what I owe, can I pay this over 9 months please", but once you've had your third or fourth time to pay agreement, then HMRC start looking at bank statements, what dividends you've paid yourself, other outgoings, etc and it gets more difficult to achieve.

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Replying to Jason Croke:
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By New To Accountancy
23rd Nov 2020 13:53

That's helpful, thanks Jason.

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By carnmores
23rd Nov 2020 17:03

is there any income to declare

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