HMRC has announced that many businesses who deferred VAT payments last year are now eligible to join the new online VAT Deferral Payment Scheme, allowing them to pay in smaller monthly instalments.
The new payment scheme is part of a wider government package of support, worth more than £280bn, which is helping to protect millions of jobs and businesses during the coronavirus pandemic.
So far around £34bn has been injected into the UK economy following the half a million businesses who deferred their VAT payment last year.
The new payment scheme will continue to help the economy recover by enabling businesses, impacted by the pandemic, to manage their business cash flow at a critical time.
We hope that our clients can benefit from this support at such a troubling time, which is why we have compiled this blog article, detailing all that we know so far.
If you wish to take advantage of this new payment scheme, your business must have deferred VAT payments between March and June 2020, under the VAT Payment Deferral Scheme.
If you meet this criterion, you will now be given the option to pay your deferred VAT in equal consecutive monthly instalments from March 2021.
To receive this option, you will need to opt-in to the VAT Deferral New Payment Scheme via the online service that opens on 23 February and closes on 21 June 2021.
Payments can easily be set up via the new payment scheme portal, which allows you to spread your payments with two to 11 equal monthly instalments, interest free.
Payments can start from March 2021 and the earlier that you opt-in, the more instalments are available to help spread the cost and provide further support.
Deferred VAT can be paid in two to 11 consecutive instalments starting in March, April, May or June 2021, without adding interest and these payments can be made by direct debit.
If your business is eligible, but you are unable to use the online service, you can ring the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.
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