UK budget VAT payment holiday on coronavirus fears

The UK Chancellor, Rishi Sunak, has today announced a UK VAT payment holiday to support businesses facing difficult trading conditions as a result of the coronavirus (Covid-19) outbreak.

The UK joins a growing list of countries that are using VAT to provide immediate boosts to business during the Covid-19 emergency, including:

Global VAT measures already announced include:

• Denmark will temporarily postpone by one month payment deadlines of VAT for companies.
• Italy is considering a suspension of VAT remittance deadlines.
• Poland has delayed the extension of SAF-T VAT reporting, and introduced a VAT payment holiday.
• China has cut VAT on medical services, catering and accommodation services, and sundry personal services (e.g. hairdressing, laundry) and public transport. There is also a cut on masks and protective clothing. VAT has also been reduced from 3% to 1% on the cash accounting scheme for small businesses until the end of May.
• Japan has delayed Consumption Tax filing deadlines and payments by 1 month until April.
• South Korea has cut VAT taxes for small businesses, given tax boosts for consumers replacing their cars early and tax deductions on personal credit card spend.
• Vietnam is proposing cutting VAT for restaurants, hotels, transport and tourism companies.
• Greece has given a four-month extension to pay VAT that falls due at the end of March in the most affected regions.
• Indonesia has said it will waive taxes on hotels and restaurants in Bali and nine other tourist destinations for the next three months.
• Thailand has exempted face masks from import VAT.
• Nigeria is considering suspending its recently introduced VAT regime