Many of you deferred your VAT payments between 20th March 2020 and the 30th June 2020 in order to help your business either survive or thrive in the first part of turmoil down to COVID-19. Those who used this scheme are now approaching the pay back deadline, HMRC have offered various options of repayment such as:
- Pay the deferred VAT in full, on or before March 31st 2021.
- Join the VAT deferral new payment scheme which is an online service opening between Feb 23rd and June 21st 2021.
- Or contacting HMRC if the above are not an option for your business and you need extra help to pay.
Interest and penalties have been announced if you do not:
- Pay the deferred VAT in full by March 21st 2021
- Opt into the new payment scheme by June 21st 2021
- Or reach out and agree extra help with HMRC to pay by the 20th June 2021
If you choose to pay your VAT in full by March 31st 2021 you do not need to contact HMRC and you can pay your bill here.
If you’ve decided to join the payment scheme this opens as mentioned between Feb 23rd and up to June 30th 2021 the new scheme will allow you to:
- Pay your deferred VAT in equal installments, interest free
- Choose the number of installments you would prefer from 2- 11 dependent on when you join the scheme (the earlier the better to increase maximum payment installments)
To join all you’ll need is a government gateway account (if you do not already have one create one here.) You’ll then need to submit any outstanding returns from the last 4 years or you will not be eligible to join the scheme, correct errors on your VAT as soon as possible if any have occurred and make sure you know how much you owe including the amount you originally deferred and how much if any you 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 future VAT returns are not eligible for this service)
- Be up to date with your tax returns.
- Join by the 21st June 2021.
- Pay your first installment upon joining.
Pay your future outstanding installments via direct debit. (there is an alternative entry route if you are not able to do that by calling 0800 024 1222)
For more info visit: GOV.UK