VAT kick in teeth for small firms

Gingerly

Well you thought that you had a VAT deferrment holiday?  Just as you shut up shop the Treasury announced you can defer payment until Mar 2021.

Hahahaha.  well not if you are a small business that does their VAT quarterly and that quarter ended on May 31.  No , you thought you were covered.

Well guess what.  You're not. 

I do wonder if the Treasury had really heard of Covid 19, because those....... now say that your VAT payment has got to be in by 7 July ready to take on the 10th.  Yep like me you thought it was a deferrment,  oh no not this stupid incompetent Government!   So you've earned very little, backsides against the wall and the treasury do that.....

My accountant said it was the accounting period ...but it isn't.  I mean common sense would prevail  No not a chance.  IT IS THE PAYMENT DATE and that is after June 30th

Unbelievable.

 

Grumpy_chap

You only have VAT to pay for the period March, April, May if you had turnover in that period.  If you closed up shop and didn't trade, there will be no bill to pay.
Where is the "kick in the teeth"?

gettingtheresometime

Our accounting period is exactly the same & I've worked it out this week we are getting a £1,400 refund.

jimkelly

If your latest quarter ended 31st May, your deferred period was the 3 months to the end of February, due in April.  You can defer that until the end of March 2021.

As for the March/April/May quarter just gone, you said it yourself you had to shut up shop, so there can't be that much to pay in any case.

Sibbers123

You could’ve deferred the previous quarter...

as mentioned above, you will only have VAT to pay if you have made sales in the quarter. No sales, no VAT.

I imagine next January and March, when the payments are due (self-assessment and VAT), and potentially a second wave of Coronavirus, this is when the people and businesses will be in real trouble. 

gettingtheresometime

Sibbers123 said:

You could’ve deferred the previous quarter...

as mentioned above, you will only have VAT to pay if you have made sales in the quarter. No sales, no VAT.

I imagine next January and March, when the payments are due (self-assessment and VAT), and potentially a second wave of Coronavirus, this is when the people and businesses will be in real trouble. 

That's why, when our previous vat payment was due, we made the payment for two reasons:

1) we didn't want a £6k debt hanging over us, especially as we put away our any vat due on as and when basis 

2) if anything happens between now and March 2021 we wanted to know that any money in our bank was ours to spend and not forget that £6k was actually the govt's

yellow1231231

i thought its the customer that pays vat on the stuff they buy?

yellow1231231

gettingtheresometime said:

Our accounting period is exactly the same & I've worked it out this week we are getting a £1,400 refund.

its not a refund you will still owe the money 

gettingtheresometime

yellow1231231 said:

gettingtheresometime said:

Our accounting period is exactly the same & I've worked it out this week we are getting a £1,400 refund.

its not a refund you will still owe the money 

How do you work that out?

i perhaps should have added that we operate under the cash accounting system if that makes a difference 

Jeremy535897

There are some misconceptions here. The observation that the customer pays the VAT and the business acts as collecting agent is correct, although there can be timing differences, depending on how VAT is accounted for. The comment "it's not a refund you will still owe the money" is a misunderstanding. If your VAT return shows that a refund is due (input tax exceeds output tax), then a refund is due. It is nothing to do with the ability to defer a VAT liability arising from the periods ending, February, March or April.

JCS1

yellow1231231 said:

gettingtheresometime said:

Our accounting period is exactly the same & I've worked it out this week we are getting a £1,400 refund.

its not a refund you will still owe the money 

Depends - if your sales are mainly non vatable and your costs vatable, you do get a refund.