If you wish to defer your next VAT payment then YES, you need to cancel your direct debit with your bank, this will mean setting it back up later but there is no way for HMRC to do this for you.
Remember you don’t need to pay any VAT from 20th March to 30th June. Use the payment date, not the quarter end date to know what period this covers.
The idea of doing this is to free up cash to pay wages whilst the Coronavirus Job Retention Scheme systems are developed and payments back to businesses made which could still be a few weeks out.
If the VAT break isn’t enough to cover wages then the Business Interruption Loan Scheme can help.
Business Interruption Loan Scheme
Delivered by the British Business Bank, the Coronavirus Business Interruption Loan Scheme launches today for businesses with turnover up to £45 million.
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website.
The government will provide lenders with a guarantee of 80% on each loan. The scheme will support loans of up to £5m in value. The first 12 months of the loan is interest free.
