VAT Deferred due to Covid-19
Did you take advantage of the option to defer paying VAT as part of the Government support to businesses during the Coronavirus Crisis? At the time you didn’t have to do anything, you just didn’t have to pay the VAT due until March 2021. As we are now approaching this deadline HMRC has published guidance on how and when to pay including the option of paying by installments.
If you deferred VAT payments due between 20th March and 30th June 2020 and still have payments to make you have 3 options:
- pay the deferred VAT in full, on or before 31st March 2021
- Join the VAT deferral new payment scheme – the online service is open between 23rd February and 21st June 2021
- contact HMRC on 0800 024 1222 by 30th June if you need extra help to pay
You may be charged interest or a penalty if you don’t pay the deferred VAT amount in full by 31st March 2021 or opt into the new payment scheme by 21st June 2021.
The VAT deferral period covered vat returns ending:
- February 2020
- March 2020
- April 2020
- May 2020 – for payment on account customers and certain non-standard tax periods only, in addition to the above periods.
If you want to join the new scheme, you will be able to do so from 23rd February up to and including 21st June 2021. If you are on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you will be invited to join the new payment scheme later in March 2021.
To use the online service to sign up to the new payment scheme you must join the scheme yourself, agents cannot do this for you. You have to pay the first installment when you join, and you must be up to date with all other subsequent returns.
The number of installments available is determined by when you join the scheme (the maximum number of installments below includes the first payment that you will make when you join the scheme):
|The Date you join the scheme by||Number of installments available to you|
|19th March 2021||11|
|21st April 2021||10|
|19th May 2021||9|
|21st June 2021||8|
Before you join the scheme, you will need to:
- create your own Government Gateway account if you don’t already have one.
- submit any outstanding VAT returns from the last 4 years – otherwise, you will not be able to join the scheme
- correct errors on your VAT returns as soon as possible
- make sure you know how you much you owe, including the amount you originally deferred and how much you may have already paid.
You will not be able to use the online service if:
- you do not have a UK bank account
- cannot pay by Direct Debit
- have dual signatories on your account
The full guidance from HMRC can be read here
Sadly, we can’t set up the deferral payments for you, but we can help you figure out how much you owe.
If you have any questions, please don’t hesitate to get in touch, as always we are here to help!