Global VAT Group COVID-19 Measures

United Kingdom COVID-19 VAT Measures

Correct as of 11 June 2020

VAT payment deferral

One of the first COVID-19 measures announced was the automatic suspension of VAT payments that fall due between 20 March and 30 June 2020. UK VAT registered businesses needed to cancel their direct debit bank instructions to ensure that payments were not collected automatically. Restoring the direct debit should not trigger a retrospective collection of “outstanding” VAT but we have yet to have re-assurance from HMRC.

Option To Tax (“OTT”) extension of 30 day rule

When a business decides to opt to tax a property they have thirty days to notify HMRC of this decision in writing, so if the effective date of an option to tax is 1 January 2020 they have until 31st January to notify HMRC. Due to COVID-19 HMRC had extended the 30 days to 90 but this extension is only until 30 June. So if you have an OTT you need to make now but want the effective date to go back between 31 and 90 days from the date of notification you now have until 30 June to do so.

Zero Rating

The planned zero-rating of certain e-publications was brought forward from 1 December 2020 to 1 May 2020.

Supplies of Personal Protection Equipment (“PPE”) in the UK is zero rated from 1 May until 31 July 2020.

Import VAT and import Duty is not payable on imports of PPE into the UK until 31 July 2020 but the circumstances are limited.

Proposed changes postponed

HMRC has announced that the following implementations have been postponed due to COVID-19

Making Tax Digital – the rollout of phase two of MTD has been delayed from 1 April 2020 to 1 April 2021.

Domestic Reverse Charge for Construction – The planned introduction of the domestic reverse charge into the construction sector on 1 October 2019 has already been postponed once until 1 October 2020 and is now postponed until 1 March 2021.

For further information contact:

Ian Marrow
Rickard Luckin

Chelmsford, United Kingdom

T: +44 1245 254219


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