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Payment Of Deferred VAT

Back at the beginning of the pandemic the Government allowed VAT registered businesses to defer VAT payments due between 20 March and 30 June 2020 as part of their suite of financial support measures.  Businesses that took advantage of the payment deferral and still have a payment to make now need to consider how to pay the liability.

Options for making payment are as follows:

  • pay the deferred VAT in full by 31 March 2021
  • opt into the new payment scheme by 21 June 2021
  • agree extra help to pay with HMRC by 30 June 2021

Pay the Deferred VAT in Full

If you have the funds available and wish to pay the deferred VAT in one go, this payment is due by 31 March 2021.  Details of how to make this payment can be found here.

Opt into the New Payment Scheme

The Government has provided a new payment scheme to all businesses who have deferred their VAT payment to spread out the deferred VAT due.  The VAT deferral new payment scheme will be open from 23 February up to and including 21 June 2021.  The repayments will be interest free and businesses can choose the number of instalments, from 2 to 11 (depending on when you join).

To join the new payment scheme, you must:

  • have a Government Gateway – most VAT registered businesses will have this to file VAT returns
  • join the scheme themself – agents cannot join this scheme on behalf of their clients
  • be up to date with your VAT returns
  • join between 23 February and 21 June 2021
  • pay the first instalment when you join
  • pay the instalments by Direct Debit

Joining the new payment scheme will not impact on the ability to have a Time to Pay arrangement for other HMRC debts.

Agree Extra Help to Pay with HMRC

Businesses who cannot afford to pay the deferred VAT in full or by instalments should contact HMRC by 30 June 2021.  Details for contacting HMRC for difficulties paying the deferred VAT or any other HMRC liability can be founds here.

Full details on how to pay VAT deferred due to coronavirus can be found here.

Links

Our previous updates can be found on Facebook and LinkedIn or on our website blog.

A UK Government general COVID-19 support website can be found here.  It contains guidance on all matters pertaining to the Coronavirus.

We continue to monitor the situation and keep you informed.  If you have any concerns, please do not hesitate to contact us.

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