If you took up the government’s offer to defer VAT payments between 20 March and 30 June 2020, what are your options now?
The first option is to pay your deferred VAT in full, on or before 31 March 2021 – HMRC has reminded taxpayers that if this is financially viable, you should do so.
The second option is to join the VAT deferral new payment scheme, which was announced in the government’s Winter Economy Plan. This scheme gives businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022, allowing an additional year to pay.
The third option, when more time is required to pay the VAT payments, is to contact HMRC. The following link will provide you with more guidance: https://www.gov.uk/difficulties-paying-hmrc
VAT deferral new payment scheme
The VAT deferral new payment scheme gives businesses the opportunity to:
– pay via equal monthly instalments, interest free
– choose the number of instalments, a minimum of 2 through to a maximum of 11 (depending on when you join)
To use the online service, you must:
– join the scheme yourself, an agent cannot do this for you
– be up to date with your tax returns
– have corrected any errors on your VAT returns
– sign up between 23 February and 21 June 2021
– have a Government Gateway account
– pay the first instalment when you join
– pay your instalments by direct debit
It is advised by HMRC that you must make sure you know how much you owe, including the amount you originally deferred and the sum you may have already paid. It also requests that if you intend to make any payment towards the deferred VAT before the scheme begins, you do so as soon as possible in order for it to show the correct deferred VAT balance.
For more information on the VAT deferral payment scheme including terms and conditions, please click here. (https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19.)
REMEMBER – you must opt-in before 21 June 2021 to take advantage of the VAT deferral payment scheme
Get in touch
For advice and support in understanding the new payment scheme, or for help with any other VAT related queries, please speak to your usual PM+M adviser or email us at firstname.lastname@example.org.
This information is correct as of 18 February 2021. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.