HMRC promises help with new Reverse VAT rules
Following the introduction of Reverse VAT in April 2021, many businesses in the supply chain found themselves due repayments at the end of each month or quarter.
ECA’s Director of Legal and Business Rob Driscoll met with HMRC and other industry representatives last week, and HMRC confirmed that payments are now being made promptly. Where repayments have taken longer than 31 days, companies have been compensated.
Rob informed HMRC that a small number of ECA businesses have reported slow payment times from HMRC which has increased pressure on their cash flow. In addition, they have struggled to get substantive responses from HMRC on resolution of their issues.
Some businesses also reported that they have had their VAT repayments offset against outstanding VAT deferred due to COVID‐19. HMRC can offset liabilities from debts owed to them. However, HMRC confirmed that, to assist with cashflow, businesses that have deferred their VAT and still have payments to make can contact HMRC either online or via telephone on 0300 200 3700 until the end of the year to discuss offset payments.
For more information and guidance, please visit the ECA Reverse VAT Charging website.