Chartered Accountants
VAT Payment Deferral
As announced by the Chancellor in his Winter Economy Plan, businesses that deferred their VAT payments earlier this year will now have the option to pay in smaller increments over a longer period.
Those that deferred VAT due from 20 March to 30 June initially had until 31 March 2021 to fully pay any outstanding liabilities. However, HMRC have confirmed that instead of paying the balance in full by March 2021, you will be able to pay in 11 monthly payments throughout the year to the end of March 2022 and will be charged no interest.
Unlike the first deferral of VAT which did not require any application or notification, you will need to opt-in to use this new deferral scheme. To be eligible to use this scheme you must:
- still have deferred VAT to pay
- be up to date with your VAT returns
- be able to pay the deferred VAT by Direct Debit
If you can and would rather pay your deferred VAT, you can still do so by March 2021 but if you would like to use the new payment scheme, the opt-in process has not yet been put in place and isn’t expected to be until early 2021.
During the deferral period, VAT returns must still be filed, and normal filing deadlines still apply.
We will share more as soon as information on how to opt-in to the new payment scheme is announced.
If you would like to discuss your circumstances, you contact our VAT Taxperts by calling one of our offices.
