VAT receipts fall to record low in April 2020

HMRC paid £897m more than it received in VAT in April 2020 compared with income of £13bn from the tax in April 2019.

This is because HMRC is continuing to refund businesses owed tax while deferring payment of VAT owed to HMRC according to UHY Hacker Young. It is the first time on record that HRMC’s monthly income from VAT has been negative.

Sean Glancy VAT partner at UHY Hacker Young said: ‘It’s astonishing that a tax could actually cost the government money but that is exactly what happened with VAT in April as businesses all over the UK deferred payments until next year.’

The financial stress on businesses also means that there are questions over how much of this deferred VAT HMRC will be able to collect. There are temporary protections now in place to prevent businesses going insolvent but after these...