VAT deferral - just tax or return too?

[williaa68]

I have seen the government announcements saying that I can delay paying my VAT until next year, which is some help in the current times. Am i correct in thinking I still have to file my VAT return on time, even if I don't pay the vat which is due? Normally my book keeper comes to my office once a quarter to do this for me but can't at the moment for obvious reasons.

thank you.

[Silverage]

I’m in the fortunate position of not having to take advantage of this scheme, but I did have a glance through HMRC’s guide to it when they emailed me. It seemed to boil down to file your return as usual but then cancel your direct debit so we can’t take the money. We then shan’t come after you for it and pick the bones out of it all when this mess is finally behind us.

To be honest I’m not sure it’s a good idea to be using VAT money which will have to be paid over eventually as an interest free loan.

[mondeoman]

^^^^
File your return
Cancel your DD

Reset your DD when this blows over and assume they'll take the payment at some point

[Canute]

Tax deferral is a really bad idea if it can be avoided.

We all know how the taxman can behave in good times, just think how they might be forced to act once this is all behind us and the government is facing a huge black hole in their funds!

[chrispmartha]

Silverage said:

I’m in the fortunate position of not having to take advantage of this scheme, but I did have a glance through HMRC’s guide to it when they emailed me. It seemed to boil down to file your return as usual but then cancel your direct debit so we can’t take the money. We then shan’t come after you for it and pick the bones out of it all when this mess is finally behind us.

To be honest I’m not sure it’s a good idea to be using VAT money which will have to be paid over eventually as an interest free loan.

I think it was just an easy hassle free way of giving companies a help with cash flow and it is of course optional.

As it happens because the banks have been pretty terrible with the loan scheme it could save a few companies if they can use the VAT money they have recieved, problem is of course that’s assuming they get it from clients paying in the first place.

[super7]

chrispmartha said:

Silverage said:

I’m in the fortunate position of not having to take advantage of this scheme, but I did have a glance through HMRC’s guide to it when they emailed me. It seemed to boil down to file your return as usual but then cancel your direct debit so we can’t take the money. We then shan’t come after you for it and pick the bones out of it all when this mess is finally behind us.

To be honest I’m not sure it’s a good idea to be using VAT money which will have to be paid over eventually as an interest free loan.

I think it was just an easy hassle free way of giving companies a help with cash flow and it is of course optional.

As it happens because the banks have been pretty terrible with the loan scheme it could save a few companies if they can use the VAT money they have recieved, problem is of course that’s assuming they get it from clients paying in the first place.

If your business is not earning any money during this period, and you defer you VAT to free up some cashflow, and then use it for Salaries, you then have to find twice as much business to generate the cash to pay the deferral.....

If you can pay your VAT, then Pay it, and i'd pay it over paying other bills!!!

[chrispmartha]

super7 said:

chrispmartha said:

Silverage said:

I’m in the fortunate position of not having to take advantage of this scheme, but I did have a glance through HMRC’s guide to it when they emailed me. It seemed to boil down to file your return as usual but then cancel your direct debit so we can’t take the money. We then shan’t come after you for it and pick the bones out of it all when this mess is finally behind us.

To be honest I’m not sure it’s a good idea to be using VAT money which will have to be paid over eventually as an interest free loan.

I think it was just an easy hassle free way of giving companies a help with cash flow and it is of course optional.

As it happens because the banks have been pretty terrible with the loan scheme it could save a few companies if they can use the VAT money they have recieved, problem is of course that’s assuming they get it from clients paying in the first place.

If your business is not earning any money during this period, and you defer you VAT to free up some cashflow, and then use it for Salaries, you then have to find twice as much business to generate the cash to pay the deferral.....

If you can pay your VAT, then Pay it, and i'd pay it over paying other bills!!!

No different from the government wanting businesses to get loans to cover outgoings in that respect though

Oh and I agree if you can pay it pay it, if you can’t however (remember VAT due might be on invoices that haven’t been paid) then it will help companies if they can defer it

[LaurasOtherHalf]

As above, you must still file your return even if you defer payment.

[super7]

chrispmartha said:

No different from the government wanting businesses to get loans to cover outgoings in that respect though

Oh and I agree if you can pay it pay it, if you can’t however (remember VAT due might be on invoices that haven’t been paid) then it will help companies if they can defer it

Yes but if my understanding is correct, the loan is via a bank and backed by the Government if you fail to pay it back.... you're only dealing with the bank.

VAT is TAX you have collected on behalf of the Government and is not really yours. I would not want to be on the wrong on the VAT man when he finally wants it paid... Isn't the VAT man the only 'Official' who can enter a premises and take what he wants without any need for a warrant??

[Crasher242]

super7 said:

chrispmartha said:

No different from the government wanting businesses to get loans to cover outgoings in that respect though

Oh and I agree if you can pay it pay it, if you can’t however (remember VAT due might be on invoices that haven’t been paid) then it will help companies if they can defer it

Yes but if my understanding is correct, the loan is via a bank and backed by the Government if you fail to pay it back.... you're only dealing with the bank.

VAT is TAX you have collected on behalf of the Government and is not really yours. I would not want to be on the wrong on the VAT man when he finally wants it paid... Isn't the VAT man the only 'Official' who can enter a premises and take what he wants without any need for a warrant??

Not sure whether that's true or not, but i do know that my old man always said that in the 40+ years he ran his precision engineering business, he could sometimes mess with suppliers and contractors (in altering payment terms etc) but the one person he didn't f*ck with was the VAT man. Ever.

[Mr Overheads]

I'll be moving my vat payment into the empty business deposit account (it's a pointless account it pays virtually no interest, but comes as standard with the current account). It can sit there as emergency cashflow until paying it over in March next year.

[chrispmartha]

super7 said:

chrispmartha said:

No different from the government wanting businesses to get loans to cover outgoings in that respect though

Oh and I agree if you can pay it pay it, if you can’t however (remember VAT due might be on invoices that haven’t been paid) then it will help companies if they can defer it

Yes but if my understanding is correct, the loan is via a bank and backed by the Government if you fail to pay it back.... you're only dealing with the bank.

VAT is TAX you have collected on behalf of the Government and is not really yours. I would not want to be on the wrong on the VAT man when he finally wants it paid... Isn't the VAT man the only 'Official' who can enter a premises and take what he wants without any need for a warrant??

The point being you may not have collected it if your clients haven’t paid

And yes they can come and take what he wants but that’s a very last resort

[williaa68]

Thanks everyone for their thoughts so far. I have a smallish directors loan into the business at the moment on which I've never charged (or more to the point received) any interest. My thinking was I can use the VAT to repay my directors loan and use this to offset my mortgage (it is an offset mortgage, which is largely, but not completely offset). Hopefully some of my debtors (of which I have a few) will pay and all will be peachy. If not, I can always reinject the directors loan when the VAT falls due? Am I missing anything obvious?

[Mr Overheads]

If your business can stand the cashflow, then you could withdraw the VAT, loan it back to the company in a Directors Loan ISA wrapper (you set your own interest rate and it's tax free)

Same with the £10k lump sum for SBRR.

Google "Directors Loan ISA"

[Terminator X]

chrispmartha said:

No different from the government wanting businesses to get loans to cover outgoings in that respect though

Oh and I agree if you can pay it pay it, if you can’t however (remember VAT due might be on invoices that haven’t been paid) then it will help companies if they can defer it

You only calc VAT on payments already in the business account afaik e.g. you wouldn't allow VAT for unpaid invoices.

TX.

[chrispmartha]

Terminator X said:

chrispmartha said:

No different from the government wanting businesses to get loans to cover outgoings in that respect though

Oh and I agree if you can pay it pay it, if you can’t however (remember VAT due might be on invoices that haven’t been paid) then it will help companies if they can defer it

You only calc VAT on payments already in the business account afaik e.g. you wouldn't allow VAT for unpaid invoices.

TX.

I thought (quite possibly incorrectly) that you paid VAT on invoices raised not on what has been paid that’s what i thought standard invoicing VAT accounting is rather than cash accounting - this is why I leave it to my accountant :-)

Edited by chrispmartha on Thursday 9th April 18:28

[Eric Mc]

It depends.

If you are operating VAT on the Cash Accounting basis, you only pay declare the Output VAT on the cash banked rather than on the original invoices raised.

[chrispmartha]

Eric Mc said:

It depends.

If you are operating VAT on the Cash Accounting basis, you only pay declare the Output VAT on the cash banked rather than on the original invoices raised.

That’s what I thought, Im not on the cash accounting basis

[Terminator X]

chrispmartha said:

Eric Mc said:

It depends.

If you are operating VAT on the Cash Accounting basis, you only pay declare the Output VAT on the cash banked rather than on the original invoices raised.

That’s what I thought, Im not on the cash accounting basis

Let's hope clients pay your invoices then as otherwise a double whammy e.g. VAT paid on invoiced sums then invoiced sums not paid!

TX.

[chrispmartha]

Terminator X said:

chrispmartha said:

Eric Mc said:

It depends.

If you are operating VAT on the Cash Accounting basis, you only pay declare the Output VAT on the cash banked rather than on the original invoices raised.

That’s what I thought, Im not on the cash accounting basis

Let's hope clients pay your invoices then as otherwise a double whammy e.g. VAT paid on invoiced sums then invoiced sums not paid!

TX.

Precisely why ill be deferring it