Did you defer your VAT payments last year due to the financial effect on the COVID-19 pandemic? If so, you were not alone. Over half a million businesses deferred VAT payments that fell due between March and June 2020 with the balances needing to be paid in full by 31 March 2021.
However, HMRC have recently announced a new online VAT deferral payment scheme which will enable businesses to pay their outstanding VAT liability in equal consecutive monthly instalments from March 2021.
Businesses will need to voluntarily opt-in to the service and they can do this via the online service which opened on 23 February 2021 and closes on 21 June 2021, following the link on the gov.uk website below:
https://www.gov.uk/guidance/de…
The month you decide to join the scheme will determine the maximum number of instalments that are available to you. For example, if you join the scheme in February or March you will be able to pay your deferred VAT in 11 instalments or fewer.
Please see the extract below from HMRC website with regards to the dates and corresponding number of instalments available to you:
To use the online service, you must ensure you meet the following criteria:
- you can only join the scheme yourself, your agent cannot do this for you
- 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 (if you want to use the scheme but cannot pay by Direct Debit, there is an alternative entry route but you will need to call the COVID-19 helpline on: 0800 024 1222)
More detailed information can be found on the gov.uk website or please contact our office on 01226 298 298 and we can discuss the options for you and your business in further detail.