We bring you this VAT update (16 February 2021) as there have been a couple of announcements in recent days; we also wanted to remind you about the upcoming reverse charge for construction, as well as the ending of the soft landing period for Making Tax Digital for VAT.
In the midst of the many financial support announcements last March, the government advised that it would be delaying the introduction of the VAT Reverse Charge for Construction Scheme by 12 months, meaning that the new scheme comes into force on 1 March 2021. The scheme will impact VAT registered construction businesses who should be aware that the way in which they account for VAT may change.
For further information click here.
Last week the Government revealed a new £20 million ‘SME Brexit Support Fund’ designed to help small businesses with changes to trade rules with the EU post-Brexit. Whilst not solely relating to VAT, the recently announced Fund will provide grants of up to £2,000 to eligible businesses for the purposes of obtaining professional advice, including VAT Training. Eligible businesses are those who import or export goods between Great Britain and the EU, or move goods between Great Britain and Northern Ireland.
As a result of the pandemic, VAT registered businesses were permitted to defer their VAT payments in the period from 20 March to 30 June 2020 without interest or penalties. Originally HMRC advised that the VAT debt would need to be repaid in full by 31 March, but businesses are now permitted to apply to repay this in instalments.
The online service for the new VAT deferral payment scheme comes online on 23 February 2021 and will remain open until 21 June 2021. The new scheme will allow for deferred VAT to be repaid over a maximum of 11 instalments – the earlier a company joins the scheme, then the greater number of instalments i.e. if you join in March 2021, then deferred VAT can be repaid over a maximum of 11 months.
For further information click here.
When Making Tax Digital (‘MTD’) was introduced in 2019, businesses were given a 12 month ‘soft landing period’ to ensure that they had digital links between all parts of their functional compatible software. This soft landing period was extended by 12 months due to COVID-19, and businesses will now need to ensure that these are in place by 1 April 2021.
To comply with MTD, if there is any transfer or modification of data after it has been entered into software it must be done using digital links so that each step of the VAT return preparation is linked digitally.
For further information click here.
In the midst of the many financial support announcements last March, the government advised that it would be delaying the
When Making Tax Digital (‘MTD’) was introduced in April 2019, businesses were given an initial 12 month ‘soft landing period’
As a result of the pandemic, VAT registered businesses were permitted to defer their VAT payments in the period from
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