COVID-19: VAT deferral - new scheme

HMRC have announced the details of the new scheme to pay any deferred VAT liabilities that were not paid between 20 March and 30 June 2020.

These are the options now available to VAT registered businesses with deferred VAT liabilities.

• pay the deferred VAT in full, on or before 31 March 2021

• join the VAT deferral new payment scheme – the online service is open between 23 February and 21 June 2021

• contact HMRC on Telephone: 0800 024 1222 by 30 June if you need extra help to pay

You may be charged interest or a penalty if you do not:

• pay the deferred VAT in full by 31 March 2021

• opt into the new payment scheme by 21 June 2021

• agree extra help to pay with HMRC by 30 June 2021

The new scheme lets you:

• pay your deferred VAT in equal instalments, interest free

• choose the number of instalments, from 2 to 11 (depending on when you join)

To use the online service, you must:

• join the scheme yourself, we as agents cannot do this for you but will help you with the process

• 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 (There are alternative options in the rare case of not being able to pay by direct debit)

Instalment options available to you:

The month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer. So the quicker you join the longer the payment period.