VAT Deferral Scheme

During the coronavirus epidemic businesses have been able to postpone paying VAT.

Paul, from ZeroVAT (a member benefit providing expert VAT advice for the print and marketing industry) has the following guidance on the scheme.

To recap, most VAT payments due between 20^th March and 30^th June 2020 could be deferred.  Payments due in this period to which this scheme applied are as follows:

• quarterly and monthly VAT return payments for the periods ending in February, March and April
• payments on account due between 20 March 2020 and 30 June 2020
• annual accounting advance payments due between 20 March 2020 and 30 June 2020.

It must not be overlooked that the VAT deferred remains a debt which must be settled before 31^st March 2021.

Please be aware that VAT payments falling due on or after 1^st July 2020 may not be deferred. This is because the 7 day extension for electronic payments takes the payment date to beyond 30^th June and past the end of the deferment scheme. HMRC has confirmed the position for the period ending on 31^st May 2020  to be as follows;

• Electronically submitted returns may not be deferred. This is because the due date is 7^th July 2020.
• A few businesses still submit paper returns and as these must be paid to HMRC by 30^th June they may defer the tax due.

Back to Brexit

After many months of concentrating on the coronavirus pandemic the government is again turning its attention to Brexit by providing clarity for the ‘border industry’ (a catch all term for exporters, importers and third parties who facilitate this trade).

Until 31^st December 2020 the transitional agreement made with the EU applies. This is why when trading with EU countries nothing much has changed to date.

Significant changes come into force on 1^st January 2021. From this date ‘the UK will operate a full, external border as a sovereign nation. This means that controls will be placed on the movement of goods between Great Britain (GB) and the EU’.  These controls are border checks for all freight coming from or going to the EU – something we have not had since 1992.

The time available to prepare for these changes has been lessened by the  coronavirus lockdown. Knowing this the government is introducing ‘border controls on imports coming into GB from the EU in three stages up until 1 July 2021’. Nevertheless any business planning or expecting to buy next year from the EU (goods such as paper, printed matter or other physical goods) needs to start preparing now for the changes.

With regard the preparations which can be put in place for next year the government recommends doing the following:

1. Getting an import/export agent. These may be in short supply because of  the  increased demand for their services.
2. Apply to HMRC for a duty deferment account so that import duties may be paid ‘once a month through Direct Debit instead of being paid on individual consignments.’
3. Prepare to pay VAT on imports from the EU although VAT registered businesses will be able to do this through their VAT returns.
4. If you do not already have one, apply for a GB Economic Operator Registration and Identification (EORI) number which is required for all businesses moving goods into or out of the UK.

For more information please go to https://www.gov.uk/government/news/uk-government-publishes-new-border-operating-model