COVID VAT Deferral Payment Scheme News
We’ve mentioned before that HMRC are launching a new system to help businesses who are yet to pay VAT that was deferred between 20th March 2020 and 30th June 2020. More details of this scheme have now been released, and business owners now have three options to deal with any amounts that remain outstanding.
- Pay the deferred VAT in full on or before the 31st March 2021.
- Join the new VAT Deferral Payment Scheme using the online registration process (see below) between 23rd February and 21st June 2021.
- Contact HMRC on 0800 024 1222 by 30th June if you need extra time to pay.
Interest or a penalty could be charged if none of the above options are taken.
How to join the new VAT Deferral Payment Scheme.
- The online scheme will open on the 23rd February 2021, and close again on the 21st June 2021.
- The scheme lets you spread the cost of your deferred VAT, in equal instalments, without paying interest.
- The number of instalments to be paid will depend on when you join the scheme.
- It is important to note the following criteria:
- You must be up to date with your VAT returns.
- You must join the scheme yourself, we cannot do this for you.
- The scheme closes to new members on 21 June 2021.
- You must pay the first instalment when you join.
- You have to pay instalments by direct debit.
- If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.
Join early to gain the maximum instalments!
If you join the scheme in March 2021, you can spread your VAT over 11 instalments, but this reduces as each month passes, reducing to just 8 instalments if you join before the 21st June. The total amount of VAT must be paid by March 2022.
You can register for the scheme here.
If you’re unsure of any of the above, please do get in touch!
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