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VAT deferral refund available
Taxpayers that wished to defer VAT payments, but did not cancel their Direct Debits in time can claim a refund, according to HM Revenue & Customs (HMRC).
The tax authority has confirmed that taxpayers that intended to defer VAT payments due between 20 March 2020 and 30 June 2020 that were unable to cancel their Direct Debit to HMRC could now do so.
To obtain a refund, taxpayers should submit a Direct Debit Indemnity Claim to their bank. On this submission, all they must state is that they want to claim a refund under the Direct Debit Indemnity Scheme (DDI) and HMRC has said it will honour the request.
HMRC has also said that there will be no time limit in making this request, but businesses are encouraged to do so soon to obtain a quicker refund.
Taxpayers can also request repayment from HMRC directly rather than contacting their bank, but they must ensure that their bank details are updated using the tax authority’s online service.
Due to COVID-19 restrictions, Payable Orders are not being issued and it may take up to 21 days for a refund to be received if the Direct Debit Indemnity Claim process is not used.
HMRC is due to provide further guidance on the payment of tax at the end of the deferral period next March.
Businesses also need to make arrangements to pay VAT falling due from 1 July 2020 to 31 March 2021.