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Covid-19 VAT Deferrals
Covid-19 VAT Deferrals

 

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:

  1. pay the deferred VAT in full on or before 31 March 2021
  2. opt in to the VAT deferral payment scheme when it launches in 2021
  3. contact HMRC if they need more help to pay

 

 

Paying deferred VAT

 

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.

 

 

Opting in to the VAT deferral scheme

 

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.

 

 

Get ready to opt in

 

Businesses wishing to take advantage of the deferred payment scheme must:

  1. create a Government Gateway Account (if not already)
  2. submit any outstanding VAT returns from the last 4 years
  3. correct any error on VAT returns as soon as possible and preferably before 31 December 2020
  4. make sure you know how much you owe

 

The online opt in process will be available in early 2021. For more infomation click here.

 

 

Contact Gow & Partners

 

If you need advice reguarding VAT deferalls, do not hesitate to contact our team on 01254 589799, or send an email to info@gowandpartners.co.uk.