Opt-in to VAT deferral new payment scheme by 31 March 2021
Businesses that deferred paying VAT between 20 March 2020 and 30 June 2020 do not need to pay the full amounts by the end of this month.
VAT-registered firms were not required to make VAT payments during this deferral period, and initially had until 31 March 2021 to pay any liabilities. However, the Government’s winter economy plan offered these firms a chance to pay in small instalments over a longer period.
Instead of paying the full amount by the end of the month, VAT-registered firms can make up to 11 smaller interest-free payments until 31 March 2022. Business groups welcomed this extra time to pay deferred VAT bills and said the move should ease the pressure on cashflow.
To spread these, a direct debit needs to be set up as part of a digital opt-in process to the VAT deferral new payment scheme. To use the scheme, a business must have deferred VAT to pay, be up-to-date with their returns and be in a position to pay the first instalment. Assuming they meet those criteria, they must complete the opt-in process through the Government Gateway before the end of this month.
If businesses can afford to pay their deferred VAT bill, they should still do so by 31 March 2021. Alternatively, they can contact HMRC’s time-to-pay service if more help is needed to repay any deferred VAT from last year.
For further information on VAT deferrals, please contact Alan Rolfe on 023 8046 1235.