The VAT payment deferral scheme has been extended for those businesses who still have payments to make for the VAT deferred between 20 March 2020 and 30 June 2020. Businesses, who cannot pay their deferred VAT in full by 31 March 2021, can opt in to the VAT deferral new payment scheme when it is launched in 2021.
The VAT deferral new payment scheme is available online in early 2021 by businesses who have been affected by coronavirus. The purpose of this email is therefore to provide you with up to date guidance on the VAT deferral new payment scheme to the extent this is known at the date of writing.
STRUCTURE OF THE VAT DEFERRAL NEW PAYMENT SCHEME
Businesses have the option to pay their deferred VAT in a maximum of 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.
To use the scheme, the business must:
• still have deferred VAT to pay
• be up to date with their VAT return submissions
• opt in before the end of March 2021
• pay the first instalment before the end of March 2021
• be able to pay the deferred VAT by Direct Debit
If you opt in to the scheme, businesses can still have a time to pay arrangement for other HMRC debts and outstanding tax.
HOW TO OPT IN
You must apply through the online service through your Government Gateway with your user ID and password. The online opt in process will be available in early 2021. We will keep you updated when the announcement is made by the Government.
Before opting in, you must:
1. create your own Government Gateway account if you don’t already have one.
2. submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so.
3. correct errors on your VAT returns as soon as possible. Corrections received after 31 December 2020 may not show in your deferred VAT balance.
4. make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid.
5. consider the number of equal instalments you’ll need, from 2 to 11 months.
We are happy to assist in readiness for the new payment scheme.
We hope this information regarding the latest update will be helpful to you. If you do have questions please let us know. Contact us on welcome@pkgroup.co.uk or +44 (0)20 8334 9953
