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VAT deferral Government Scheme

VAT deferral Government Scheme

If you deferred your VAT payment due to Covid pandemic between the 20 March and 30 June 2020 it is important to understand your options if you have not yet paid the outstanding payment – this the update from Government issued on the 14th April 2021.

You have three options: –

  • pay the deferred VAT in full now
  • join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
  • contact HMRC on 0800 024 1222 by 30 June 2021 if you need extra help to pay

If you struggled to pay the outstanding amount in full by the 31st March 2021, you have two options to avoid being charged any penalties or interest, you can: –

  • joining the new payment scheme by 21 June 2021
  • paying your deferred VAT in full by 30 June 2021

You can join the VAT deferral scheme which opened on the 23 February 2021 and is open upto and including the 21 June 2021.

This new scheme will allow you to: –

  • pay your deferred VAT in equal instalments, interest free
  • choose the number of instalments, from 2 to 11 (depending on when you join)

When you set up the scheme you will be presented with a set number of instalments that are available to you which is dependent on when you join the scheme (so look into this as quickly as you can to maximise the period of instalments available to you).  There is a table detailed below to show you the monthly joining deadlines and instalments that will be available to you.

 

If you join by Number of instalments available to you
19 March 2021 11
21 April 2021 10
19 May 2021 9
21 June 2021 8

Below are the points provided by Government to follow to join the scheme: –

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’ll not 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)

 

You can join the scheme here.

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