Deferring VAT Payment

Is the tax man kind enough to help struggling businesses in terms of deferring VAT payments.
Thanks god; Yes this is true. HM Revenue and Customs is allowing certain businesses to defer their VAT payments in certain circumstances.

This is how it will work if you are lucky enough to make it work.

WHEN CAN WE DEFR VAT PAYMENT DUE TO HMRC?


If you plan ahead and if you foresee that you will not be able to make VAT payment on time, you can contact the HM Revenue and Customs (HMRC) Business Payment Support Service. The service is not however available if HMRC has already contacted your business about an overdue payment. This service is also not available if you have defaulted payments previously agreed with HMRC.

HMRC will consider your request on certain fact and figures and they probably need to see your actual VAT payment that will become due. Some explainable reasons might include unplanned expenditure, delayed receipts from customers, difficulty in securing funding from banks or even loss of a key client.

HOW MUCH VAT CAN A BUSINESSES DEFER?
There is no any minimum or maximum amount that can be deferred. HMRC will even consider payments up to 1Million if you can support your calculation.

WHAT SHOULD WE DO TO GET STARTED
Just get a Call on 0845 302 1435 and explain your problem. There is a person listening to you at the other end. It’s even better to gather your figures before you make a call and try to be accurate and realistic about your past figures and HMRC can see all your VAT calculations on their system.

DOES THIS PROCESS TAKE TIME?
If HMRC is satisfied with your explaination and you have not defaulted VAT payments in the past, it’s likely that you will get a decision in a few seconds even though this might take a couple of weeks. However, remember if you attempt to fool HMRC, it’s likely that they will reverse the decision and withdraw the facility.

WHAT ARE THE ADDITIONAL COSTS INVOLVED?

You should expect that a standard Interest will be charged on the amount outstanding. It will not be counted as a default, and the normal default surcharge will not be imposed, provided you have agreed with HMRC to defer the payments. In addition, HMRC will encourage you to set up a direct debit as a matter of formality.