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UK budget VAT payment holiday on coronavirus fears

  • Feb 11, 2020 | Richard Asquith

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

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: richard.asquith@avalara.com. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.