The Chancellor’s Winter Economy Plan, outlined in September 2020, stated that deferred VAT due in March 2020 could be repaid in 11 month interest free instalments, in order to help businesses with their cashflow.
Further details have now been published concerning the payment of VAT deferred due to Coronavirus and how you can pay now or opt in to the payment deferral scheme.
For businesses that deferred VAT between 20 March and 30 June 2020 and still have payments to make, there are 3 options:
Businesses can pay deferred VAT in full any time before 31 March 2021. There is no need to contact HMRC. VAT payments can be made here.
Instead of paying the full amount of VAT before 31 March 2021, businesses can take advantage of the new payment scheme. The scheme allows businesses to make up to 11 smaller monthly instalments, interest free. Please note that all instalments must be paid by the end of March 2022.
The scheme will allow businesses to pay deferred VAT in instalments with no interest and select the number of instalments from 2 to 11 equal monthly payments.
To use the scheme, businesses must still have deferred VAT to pay, be up to date with their VAT returns and be able to pay the deferred VAT by Direct Debit.
If opting in to the scheme, businesses can still have a time to pay arrangement for other HMRC debts and outstanding tax.
Businesses wishing to take advantage of the deferred payment scheme must:
The online opt in process will be available in early 2021. For more infomation click here.
If you need advice reguarding VAT deferalls, do not hesitate to contact our team on 01254 589799, or send an email to email@example.com.