Important of VAT colorful text and arrows pointing to the word VAT at the center on black cement wall

Deferred VAT payment deadline fast approaching

Tax

Businesses that deferred VAT payments (between March 2020 and June 2020) which remain outstanding need to act now to avoid penalties.

Businesses were initially given until March 31, 2021 to pay any liabilities which accumulated through the VAT deferral period. However, it was later announced that, rather than paying in full at the end of March 2021, a new payment scheme would be launched allowing businesses to further defer their payments.

If you deferred VAT payments due between 20 March 2020 and 30 June 2020 you can:

  • pay the deferred VAT in full
  • join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
  • contact HMRC by 30 June 2021 if you need extra help to pay
Pay your deferred VAT in full

If you were unable to pay in full by 31 March 2021, you may still be able to avoid being charged penalties or interest by either:

Join the VAT deferral new payment scheme

The VAT deferral new payment scheme is open from 23 February 2021 up to and including 21 June 2021.

The new scheme lets you:

  • pay your deferred VAT in equal instalments, interest free

The instalments options if you join between 20th May and 21st June 2021 are 8 equal instalments.

How to join

Before joining, you must:

  • have your VAT registration number
  • create your own Government Gatewayaccount (if you do not already have one)
  • submit any outstanding VAT returns from the last 4 years – otherwise you’ll not be able to join the scheme
  • correct errors on your VAT returns as soon as possible
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

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 you want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)
What to do now

Businesses with outstanding deferred VAT balances need to decide quickly whether they will be in a position to pay HMRC in full by the end of June. If they will not, and they can meet the 21 June sign up deadline, they should consider applying for the new payment scheme.

If you have any questions regarding your deferred VAT payments outstanding, please contact the office on 01249 465 435 or 01793 378 586.

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