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UK – update on Covid-19

COVID 19 – deferred VAT monthly repayment scheme: agents not able to set up the direct debit As part of the Winter Economy Plan, the Government announced that businesses who deferred VAT due from 20 March to 30 June 2020 will have the option to pay in smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, businesses can make smaller payments up to the end of March 2022, interest free. They will need to opt-in to the scheme, and for those who do, this means that their deferred VAT liabilities do not need to be paid by the end of March 2021. 

The VAT deferral new payment scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorized bank account holder.  Because of that, HMRC is unable to provide an agent service for the scheme. HMRC advise that they will communicate the details of the VAT deferral new payment scheme and its operation at the earliest opportunity to allow agents to appropriately advise and support their clients both prior to and during the opt-in process. Businesses that can pay their deferred VAT should still do so by 31 March 2021.

Brexit – Customs Duty: Binding Tariff Rulings not applicable in EU from 1 Jan 21 – next steps As binding tariff information decisions issued by the UK or for EORI numbers starting GB will not be valid in the EU from 1 January 2021, this new guidance ‘Changes to legal rulings for the classification of goods from 1 January 2021’ sets out steps to be taken.

Brexit - International VAT refund claims EU business not registered for VAT in the UK - The UK will continue to accept refund claims from EU businesses through the EU VAT refund system for VAT charged in the UK before 1 January 2021, until 11pm on 31 March 2021.

UK business claiming in EU countries (source) - The EU VAT refund system can still be used for EU VAT on eligible expenses incurred before 1 January 2021, until 11pm on 31 March 2021. The system will now allow you to view/amend these claims up to this date too.

MTD for Corporation Tax consultation HMRC has launched the consultation on the design of MTD for Corporation Tax that will remain open for 16 weeks. HMRC would like a broad range of stakeholders to contribute their thoughts on the CT proposals, including lessons learned from MTD for VAT. Views and engagement are offered through a number of methods: email, post, virtual events (details to follow on dates). There will be a pilot of MTD for CT in advance of mandating, and HMRC confirms that mandating of MTD for CT will not be before 2026.


The above information was kindly provided by Steve Botham from Covertax Chartered Tax Advisers (UK); contact:

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Disclaimer:  The information contained in the present page is general and does not constitute legal advice. Before taking any decision or action on the above information you should take the appropriate professional advice.