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COVID-19: Re-cap of the VAT and self-assessment payment deferral


  • The VAT deferral payment applies from 20 March until 30 June 2020
  • All UK businesses are eligible including non-established businesses registered for VAT in the UK
  • This will generally mean the deferral of one quarter’s VAT: the payment due on 7 April, 7 May or 7 June 2020 or the monthly payments due on each of these dates
  • Businesses that currently have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank directly to cancel the mandate
  • The direct debit needs to be cancelled before the direct debit is due to be collected
  • Taxpayers have until 31 March 2021 to pay any liabilities that accumulate during the deferral period
  • VAT refunds and reclaims will be paid by HMRC as normal
  • Businesses should continue to file their VAT returns by the due date

Income Tax

  • The deferral for income tax self-assessment applies to the second payment on account for 2019/20 due on 31 July 2020, now deferred until 31 January 2021
  • This is an automatic offer and no application is required
  • HMRC has confirmed that the deferral applies to all taxpayers, it is not necessary to be self-employed to be eligible for the deferral
  • The deferral is optional – some taxpayers may prefer to make the July payment to avoid a larger payment in January
  • Any taxpayer that wishes to defer payment and has already set up a direct debit mandate for the payment on account due on 31 July 2020 should cancel it by contacting the bank.
  • Self-assessment returns should still be filed by their due date
  • It may be advantageous to file the 2019/20 return as soon as possible to aid planning for the tax payment due in January 2021 or to promptly process any refund which may be due

As always, if you have any queries about the above or wish to discuss anything with our team, please don’t hesitate to contact us on 01226 298 298.