If you deferred your VAT between 20 March and 30 June 2020 due to the Coronavirus pandemic and still have payments to make, you can:
- pay the deferred VAT in full on or before 31 March 2021
- opt in to the VAT deferral new payment scheme when it launches in 2021
- contact HMRC if you need more help to pay
If you choose to pay your deferred VAT by the 31st March, you can find out more details here and you do not need to contact HMRC.
If you want to opt in to the new payment scheme
You cannot opt in yet. The online opt in process will be available in early 2021. You must opt in yourself, your agent cannot do this for you.
Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.
The new payment scheme will allow you to:
- pay your deferred VAT in instalments without adding interest
- choose the number of instalments you make from 2 to 11 equal monthly payments
To use this scheme you must:
- still have deferred VAT to pay
- not have outstanding VAT returns
- opt in before 31st March 2021
- pay the first instalment when you opt in
Opting in to the new scheme does not affect any other time to pay arrangements for HMRC debts and outstanding tax.
Get ready to opt in to the new payment scheme
Before opting in you must:
- create your own Government Gateway account if you don’t already have one
- submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have overdue VAT submissions.
- correct errors on your VAT returns as soon as possible
- make sure you know how much you owe, you should know the total you deferred and the total payments made to date.
You should also:
- pay what you can as soon as possible to allow HMRC to show the correct deferred VAT balance
- consider the number of equal instalments you’ll need to make ranging from 2 to 11 months
MJB Avanti can assist you with all aspects of VAT, from registration to submission and quarterly VAT checks to ensure your compliance with HMRC. If you need advice on anything in this article or your VAT position, please call MJB Avanti on (08000) 388 799