Covid-19: businesses that missed VAT deferral may be able to claim refund

Posted on 10th June 2020 by Streets

As part of the measures announced to help businesses through the difficulties posed by the current Covid-19 pandemic, temporary changes were introduced to VAT payments due between 20 March 2020 and 30 June 2020.

This enabled VAT registered businesses and organisations to defer VAT payments due by 30 June 2020, helping to ease cashflow. To take advantage of the deferment, organisations had to ensure that they cancelled their Direct Debit relating to the payment due.

The good news is that for those who wanted to defer payment but forgot to cancel their Direct Debit, HMRC have indicated it will possible to claim a refund. Refunds can be claimed by submitting a Direct Debit Indemnity claim to your bank, stating that you want to claim a refund under the Direct Debit Indemnity Scheme (DDI). Whilst HMRC confirms that there is no time limit in making this request, no doubt most organisations will seek to benefit from such a refund on cashflow soonest.

If you seek a refund via HMRC, rather than contacting your bank, it is essential that the claimants bank details are updated using HMRC’s online services. HMRC reminds taxpayers that due to Covid-19 restrictions, Payable Orders are not being issued and that it may take up to 21 days for the refund to be received if the Direct Debit Indemnity Claim process is not used.

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