If you deferred VAT due from 20 March 2020 to 30 June 2020 and still have payments to make, you can opt into the VAT deferral new payment scheme to pay your deferred VAT over a longer period.

The VAT deferral new payment scheme is expected to open 23 February 2021 and close at the end of June 2021. If you opt-in you can make up to 11 smaller monthly instalments, interest-free.

You can opt into the scheme online without the need to call. Get more information about VAT deferral and how to opt-in quickly and simply online when the scheme opens.

Businesses that need more help to pay their deferred VAT should contact HMRC. If you can pay your deferred VAT by 31 March 2021 you should do so.

Late fees on deferred VAT

Don’t forget the deadlines once you have deferred! You could be charged interest on your payment or even be given a penalty if you do not do the following:

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

Joining the new VAT deferral payment scheme

You will have to join the scheme yourself as this is not something your agent can do for you. There is a list of requirements you’ll need to meet in order to join the scheme. You must:

  • 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 are still able to have a Time to Pay arrangement for other HMRC debts and outstanding tax.

You can find out more about VAT deferral and how to join the scheme here, but if you have any questions about it please get in touch with our team who would be happy to help.