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VAT: Holiday payment window snaps shut

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Businesses need to pay VAT on the normal due dates from 1 July. Neil Warren discusses how advisers can assist clients who will struggle to pay HMRC on time.   

19th Jun 2020
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The VAT payment holiday window ends on 30 June, and normal service resumes from 1 July. What should you do if your clients can’t pay the VAT due by 7 July, for their May VAT return because of the impact of Covid-19 on their trading situation? The good news is that a sympathetic ear and time to pay agreement may be available from HMRC.

The priority is to contact the PSS at HMRC before the VAT is legally due for payment. Any time to pay agreement won’t then be subject to a default surcharge. Before you call the PSS, make sure you have the client’s VAT number and bank account details to hand. Also be clear about the amount of VAT that is outstanding and your proposals to settle the arrears.

The HMRC officer you speak to will also require details about why you cannot pay on time. A partial payment on time will score brownie points, rather than asking for all of the liability to be deferred.

Contact details for the PSS: 0300-200-3835, open 8am to 4pm Monday to Friday.

Example

ABC Clothing has been selling goods online since the Covid-19 lockdown started and owes £12,000 on its May 2020 VAT return.

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Replies (5)

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By booksy
24th Jun 2020 10:24

Neil I was under the impression that only the client could do this?

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Replying to booksy:
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By Di
24th Jun 2020 12:48

I've been able to negotiate time to pay on behalf of client, but the Revenue do like a dd set up so you require authority.

Thanks (1)
Replying to Di:
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By booksy
24th Jun 2020 15:48

Thanks Di. I have the 64-8 but will i need then an additional authority from client to set up a dd? I suppose I will have to bite the "unpaid" bullet and ring both the client for all their details and circumstances, get written authority and then ring HMRC. But how will HMRC know I have authority to set up a dd?

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Replying to booksy:
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By Di
24th Jun 2020 16:23

They just accepted it verbally from me! I have found that it usually depends on who you get to speak to. Another way I have negotiated the time to pay is to phone and arrange the payments then the client has to phone and provide the bank details.

Thanks (1)
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By AndrewV12
05th Aug 2020 13:06

Vat is a nice little earner for the Government, Covid could hit the Government coffers hard.

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