22nd February 2021
Some businesses took advantage of the VAT deferment between 20th March and 30th June 2020. These deferred VAT liabilities are due for payment by 31st March 2021.
Businesses who can afford to pay this deferred VAT liability in full are encouraged to do so by 31st March 2021 but businesses who are still being affected by Coronavirus now have the option of paying the deferred VAT liability in monthly instalments.
No interest is charged on the monthly payment arrangement once approved by HM Revenue and Customs. The deferred VAT liability is then required to be paid by 31st March 2022.
The ‘VAT deferral payment scheme’ is open to applications from 23rd February 2021 up until 21st June 2021. To be eligible to apply, you must: –
- create your own Government Gateway ID (if you do not already have one)
- submit any outstanding VAT Returns from the last 4 years
- correct any errors on historic VAT Returns as soon as possible
- ensure you know how much your deferred VAT liability is
- choose how many monthly instalments you wish to pay over (ranges from 2 to 11 months)
Please note that to access the ‘VAT deferral payment scheme’ you need to make the application yourselves. Agents are not permitted to make the application on your behalf.
Businesses who operate the ‘VAT Annual Accounting Scheme’ or ‘VAT Payment on Account Scheme’ will be invited to join the new payment scheme in March 2021.
The first instalment is payable when you apply for the scheme so please have your payment details to hand to make this first payment. Payments will be made by monthly Direct Debit over the repayment period.
Full details can be found here – https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
If you are still unable to pay the deferred VAT by 31st March 2022, please follow the advice on the above link.