Rishi Sunak’s plan to avoid mass redundancies by offering to cover 80 per cent of workers’ wages was a central part of the chancellor’s package of measures designed to tackle the potential economic damage caused by the coronavirus.
Whilst the precise details of the package and how it will work are still awaited it is clear that in the meantime the Government expects companies to defer payments to HMRC until the job retention scheme is up and running and companies can claim for the wages paid. A key source for this will be the deferral of value added tax payments for the quarter until June 2020 that do not have to be paid to HMRC until March 2021.
Please note, smaller companies with direct debits to pay VAT to HMRC should cancel these immediately otherwise the money will be deducted automatically as the Treasury confirmed that it could not cancel them unilaterally.