Businesses that deferred VAT due from 20 March to 30 June 2020 and still have payments to make now have option to opt into the VAT deferral new payment scheme to pay their deferred VAT in 11 interest free monthly installments.
The businesses can either
- Pay the deferred VAT in full, on or before 31 March 2021 or
- Join the VAT deferral new payment scheme – the online service is open between 23 February and 21 June 2021
- Contact HMRC on Telephone: 0800 024 1222 by 30 June if they need extra help to pay
Failure to do one of above will result in interest or penalty.
The businesses on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme,will
be invited to join the new payment scheme later in March 2021.
The new scheme lets you:
- Pay your deferred VAT in equal instalments, interest free
- Choose the number of instalments, from 2 to 11 (depending on when you join)
To use the online service, you must:
- Join the scheme yourself, your agent cannot do this for you
- 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 want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)
- If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax
The month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.
The table below sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):
Join by Number of instalments available
19 March 2021 11
21 April 2021 10
19 May 2021 9
21 June 2021 8
