VAT Deferral New Payment Scheme
Last year, many businesses deferred VAT payments. HMRC have now announced that those businesses can now join the new online VAT Deferral New Payment Scheme to pay it in smaller monthly instalments.
In order to take advantage of the new payment scheme, businesses will need to have deferred VAT payments between March & June 2020.
It’s important to note you will need to opt-in yourself to the VAT Deferral scheme. This must be done via the online service which closes 21st June 2021.
Before joining, you must:
- Have your VAT registration number
- Create your own Government Gateway account (if you do not already have one)
- Submit any outstanding VAT returns from the last 4 years – Otherwise you won’t be able to join the scheme
- Correct errors on your VAT returns as soon as possible
- Make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid
To use the online service, you must:
- Join the scheme yourself, your agent cannot do this for you still have deferred VAT to pay
- Be up to date with your VAT returns
- Join by 21 June 2021
- Pay the first instalment when you join
- Pay your instalments by Direct Debit (if you want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)
If you do not set up the scheme in time, then the full amount that you owe will fall due on 30th June 2021 and you may be charged a 5% penalty and/or interest.
Businesses can spread their payments with 2 to 11 equal monthly payments, interest free. Payments started from March 21 and the sooner you opt-in the more instalments are available.