VAT and Self Assessment payment deferrals due to coronavirus

In this guide, we'll unpack deferred VAT and income tax payments, as well as deferred Self Assessment payments for Sole Traders.

14 April 2020

The following initiatives have been announced by the government in order to help small business owners with VAT, tax and Self Assessment payments.

This information is based on what's provided on the gov website as of 15 April 2020. We are working hard to ensure that all content on our site is up to date, and will make sure that this page is updated when more information is available.

Deferred VAT and income tax payments

What is it?

HMRC are deferring VAT payments for UK VAT registered businesses that have a payment due between 20 March 2020 and 30 June 2020. If you’re self-employed, you will not be required to make Self Assessment payments until January 2021.

You’ll still be required to submit a VAT return to HMRC on time, but no interest or penalties will be charged on deferred payments.

Am I eligible?

This is available for any VAT registered businesses, including self-employed workers and companies that have a VAT payment due between 20 March 2020 and 30 June 2020.

How do I apply?

If you’d like to defer your VAT payment, you don’t need to inform HMRC – it will be done automatically.

Deferred Self Assessment

Am I eligible

This deferral scheme is for Sole Traders whose Self Assessment tax return is due on 31 July 2020.

What is it?

If your second Self Assessment payment is due on 31 July but coronavirus has impacted your ability to make this payment, you can apply to defer payment until 31 January 2021. Be aware, you will still need to submit your VAT return to HMRC on time.

How do I apply?

No application is required to access this scheme but if you pay your tax via Direct Debit, be sure to cancel it with your banking provider. No penalties or interest will be applied to late payments if you choose to defer until January 2021, but HMRC do recommend you set up a budget payment plan to help pay the deferred payment when it is eventually due.

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Dan is part of the content team at iwoca. He writes articles explaining financial topics, as well as guides on the best support for small businesses during coronavirus.

Article updated on: 8 October 2020

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