Many individuals and companies took advantage of the COVID-19 VAT payment deferral scheme which allowed them to defer VAT payments falling due between 20 March 2020 and 30 June 2020 until 31 March 2021
HMRC has recently issued guidance on the process of extending the deferral by a year to the end of January 2022.
If you deferred VAT between 20 March 2020 and 30 June 2020 and still have payments to make, you have three options:
- pay the deferred VAT in full on or before 31 March 2021
- opt in to the VAT deferral new payment scheme when it launches soon
- contact HMRC for more help to pay.
Opt in to the VAT deferral new payment scheme
Instead of paying the full amount by the end of March 2021, up to 11 smaller monthly instalments can be made, interest free. All instalments must be paid by the end of January 2022.
The scheme will allow you to:
- pay deferred VAT in instalments without adding interest
- select the number of instalments from 2 to 11 equal monthly payments.
To use this scheme, you must:
- still have deferred VAT to pay
- be up to date with VAT return declarations
- be able to pay the deferred VAT by Direct Debit.
How to opt in
You cannot opt in yet. The online opt in process will be available in early 2021. You must opt in yourself, we cannot do this for you.
To use this scheme, you must both opt in before the end of March 2021 and pay the first instalment when you opt in. If you opt into the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.
SRC-Time are one of the South East’s leading accountancy firms in advising the self-employed and partnerships in all aspects of their tax affairs and we are able to assist in any issue raised above.
Our expert team is available to provide you with advice and can be contacted on 01273 326 556 or you can drop us an email at firstname.lastname@example.org or speak with an account manager to get any process started.