Paying VAT Deferred Due to Coronavirus

If you deferred any VAT payments due between 20 March and 30 June 2020, because of the Coronavirus pandemic, and still have payments to make, you have three options:

• pay the deferred VAT in full on or before 31 March 2021.

https://www.gov.uk/pay-vat

• join the VAT Deferral New Payment Scheme (please see details below)

Note 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 in March 2021.

• contact HMRC by 30 June 2021 if you need extra help to pay

Telephone 0800 024 1222

Late payment Interest and penalties

You may be charged interest or a penalty if you do not:

• pay the deferred VAT in full by 31 March 2021
• opt into the new payment scheme by 21 June 2021
• agree extra help to pay with HMRC by 30 June 2021

VAT Deferral New Payment Scheme

The VAT Deferral New Payment Scheme will open on  23 February 2021 and close on 21 June 2021.

The scheme will allow you to pay the deferred VAT in equal instalments without interest or penalties. You can choose the number of instalments that you wish to pay by, although this will depend on when you apply to join the scheme:-

Join by	Number of instalments
19 March 2021	11
21 April 2021	10
19 May 2021	9
21 June 2021	8

 

To use the scheme, you must:

• join the scheme yourself. Unfortunately, HMRC will not allow us to do this for clients.
• still have deferred VAT to pay
• be up to date with your VAT Returns
• join by 21 June 2021
• pay the first instalment when you join
• pay your instalments by direct debit. (If you cannot pay by direct debit, please contact the COVID-19 helpline when the scheme opens by telephone on 0800 024 1222 ).
• know the amount you are due to pay (including the amount you originally deferred and how much you may have already paid towards this)

You cannot add on any extra VAT payments due after you have joined the scheme. Any error corrections relating to the deferral period that are notified to HMRC after 31 March 2021, cannot be included in the scheme.

If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.