VAT Holiday – Still a need for caution to ensure the procedure is followed
Following the Chancellor’s announcement of the VAT holiday Alison Horner, indirect tax partner at MHA MacIntyre Hudson, says companies still need to be wary of procedural pitfalls
“All businesses with a UK VAT registration are automatically eligible for the VAT deferral for return periods ending in February, March and April, and there is no need to apply to qualify. While this provides very welcome respite for many companies, with a revised payment deadline of March 2021, they must ensure they manage their cashflow appropriately over the next year to account for payment, and that of the upcoming tax year too. It is a deferral and the money owed will still need to be paid next year. Businesses that pay by direct debit should cancel this now – as HMRC will not automatically defer any payments made.
“Large businesses within the payments on account scheme appear to be able to defer