VAT deferment Coronavirus and cash scheme

VAT deferment Coronavirus and cash scheme I

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Hi,

I guess there is nothing to stop a client switching from VAT cash accounting for the 29/02 Return to maximise the deferred liability (Coronavirus) and switching back afterwards if it's to their advantange in the next quarter - correct?

As long as they are aware that this will be payable 2020/21 it seems sensible.

Many thanks

Replies (4)

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RLI
By lionofludesch
31st Mar 2020 11:23

Why would you do that, though, when collection of the tax is being deferred ?

Easier to cancel your direct debit.

Thanks (1)
Replying to lionofludesch:
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By Elgin
31st Mar 2020 11:36

I thought that the deferment currently relates to payments due to 30/06/20 so 29/02 is due 07/04 and 31/05 will be due 07/07 so outside of this?

The 29/02 VAT due is, say £10k under cash accounting and £20k under standard VAT so the larger amount can be deferred?

I may not be thinking clearly so wanted to check.

Any input either way is much appreciated!

Thanks (0)
Replying to Elgin:
RLI
By lionofludesch
31st Mar 2020 11:44

Take your point but the success or otherwise depends to a large extent on things we don't yet know. Like the terms for settlement of these deferred debts and whether the scheme will be extended to the following quarter.

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Replying to lionofludesch:
Psycho
By Wilson Philips
31st Mar 2020 11:40

It's only (so far) 'this' quarter's VAT that is going to be deferred. I haven't worked it through yet, but changing to invoice basis to bring VAT into this quarter that would otherwise have been recognised in the next under cash accounting might be beneficial from a cash flow perspective.

Thanks (1)