New HMRC scheme for businesses who deferred VAT payments in 2020
During the first lockdown, the Government allowed VAT-registered businesses to defer their VAT liabilities that arose between 20 March and 30 June 2020 to help with cashflow. The 500,000 businesses who took advantage of the scheme can now sign up to a new HMRC payment plan to pay off their deferred VAT bill in monthly instalments.
If you deferred VAT payments due between 20 March 2020 and 30 June 2020 and still have payments to make, you need to pay the deferred VAT in full, on or before 31 March 2021 or join the VAT deferral new payment scheme.
HMRC launched its new VAT deferral payment scheme on 23 February 2021, which will run up to and including 21 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)
Instalment options available to you
The month you opt in to the scheme will determine the maximum number of instalments that are available to you. If you join before the end of March, you’ll be able to spread your deferred VAT over 11 instalments, but this decreases month by month to eight by 21st June.
How to join
Before joining, you’ll need to submit any outstanding VAT returns from the last 4 years and make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid.
Payments can then easily be set up through the new payment scheme portal.
The first payment must be made when a business joins the scheme and subsequent instalments will need to be paid by Direct Debit.
Unfortunately we can’t do the leg work for you on this one, as business owners are required to join the scheme themselves, but it should be a relatively easy and straightforward process and we’re happy to advise if you need any help at all along the way!
If you have any questions about the deferred VAT payment scheme or your accounting needs, get in touch on 0203 026 4679 or at email@example.com.
This article is a general summary only. It should not replace accounting advice tailored to your specific circumstances.
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