Businesses who deferred their VAT payment which was due to be paid between 20 March and 30 June 2020 now have 3 options for payment:
- You can pay the deferred amount in full by 31 March 2021
- You can opt-in to the VAT deferral payment scheme which launches early 2021
- You can contact HMRC for additional time to pay
If you choose Option 1 you need to make the payment by 31st March 2021, there is no need to contact HMRC.
If you choose Option 2 you can make between 2 and 11 monthly instalments interest free, with the final payment being made by 31 March 2022.
To use this scheme you must:
- still have deferred VAT to pay
- be up to date with your VAT returns
- opt in before the end of March 2021
- pay the first instalment when you opt in
This scheme will open early in 2021 and you must opt-in to it before the end of March 2021.
You will be able to apply for this scheme through your business Government Gateway tax account as your VAT agent will not be able to do it for you.
Get ready to opt in to the new payment scheme
Before opting in you must:
- create your own Government Gateway account if you don’t already have one
- submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so
- 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
You should also:
- pay what you can as soon as possible to allow us to show the correct deferred VAT balance
- consider the number of equal instalments you’ll need, from 2 to 11 months