Directors should ensure they take action to protect creditors of the company along with the interests of the company. Seeking help from Blue Group Insolvency will prevent VAT arrears accumulating and putting directors of the company at risk.
VAT: Reduced rate for use by hospitality, holiday accommodation and attractions in the UK.
The government announced on 8 July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT relating to:
admissions to certain attractions;
hotel and holiday accommodation;
The temporarily reduced rate applies to supplies made between 15 July 2020 and 12 January 2021.
The Accountant Miscalculated the Company VAT return – What Next?
Financial functions of your limited company, remain your responsibility as a director.
Therefore should your external Accountant send in incorrect information to HMRC as a whole then you remain responsible.
Accountancy errors, however, are an insufficient excuse for non or late payment of VAT.
Deferral of VAT payments due to Coronavirus (COVID-19).
The VAT payments deferral scheme ended on 30 June 2020.
Paying the tax, you deferred.
If you deferred your VAT payment as a result of Coronavirus, you are required to pay the VAT due by 31st March 2021.
You can pay towards your deferred VAT now or any time to 31 March 2021.
Is it possible to pay VAT monthly?
Contact HMRC to arrange VAT payments using monthly instalments, up to 12 month period.
If you have issues paying VAT, contact HMRC ASAP. Do not avoid them. HMRC will not penalise companies too heavily, ENSURE you maintain contact.
Unable to pay your VAT Tax Bill? – Ensure your File VAT return at HMRC.
When sending your VAT return into the HMRC Ensure you understand it. Suppose your Accountant has completed it. Ask who prepared the return how they arrived at the figures inserted in the box.
You have included all sales and purchases in the VAT period.
Have you recovered all VAT allowed and not on items not allowed?
Have you recorded all credit notes for sales?
If so then:
File your VAT return
Suppose you can’t pay your VAT, the HMRC then issue a VAT assessment if no return remains not filed. Completing and filing your return demonstrates compliance with the HMRC.
Then – Make contact with HMRC by phone!
HMRC will wish to know:-
why your business appears unable to pay your VAT due.
Where has the money been spent?
HMRC debt management can be understanding. Once a more significant mutual agreement of the company is reached. Then you can agree on a repayment plan.
The company though must be viable. Remember, fines etc. may be high and not affordable. To ensure you remain honest and let the HMRC see your intent to repay is genuine.
At all times, keep in contact. Avoid a default. – surcharges.
The HMRC may also charge penalties if the VAT return is incorrect. Applies if the return falsified.
Do not forget Interest charged on the overdue debt.
Approach HMRC for a “time to pay”.
Ask for time to pay – agree on a plan to repay. Always ensure you have an accurate attainable cash flow representing the prospects of your business.
Ensure also that the agreed sum to pay back each month can is affordable in addition to other operational costs and ongoing VAT liabilities.
Missing a payment will cause the agreement to fail, and the balance repayable upon immediate demand.
Think wisely and talk to Financial Issues beforehand.
HMRC approach and how it can help you.
HMRC are very focussed when collecting tax debt. Owing tax to them may appear daunting.
If you can’t pay your VAT return because you have outstanding customers delaying payments, then:-
Commence chasing customers who owe money.
Keep Chasing systematically.
Those who have not paid require having the account suspended.
Late payment interest
Arrange a repayment plan with those who want to pay, but themselves have cash flow issues
Remain calm but focused.
Option – Short term financing
A Short term loan, to aid company cashflow. Take care, though. Interest charges can be high. Also, check if eligible for an overdraft facility with your companies bank.
Short term finance. – such as Ezbob, IWOCA, and The Funding Circle.
Invoice financing or factoring.
HMRC no longer accept credit card.
Customers will hold on to paying during difficult times. Indeed, they may also delay as they use your goods to help fund their cash flow.
Factoring is an option available to assist you with cash flow. It can be expensive and care needed when considering who to use.
If you would like assistance from Financial Issues in helping choose, please contact Jeff Jones on 0800 612 5448.