Last year, HMRC offered businesses the opportunity to defer VAT payments falling due between 20 March 2020 and 30 June 2020, until 30 June 2021 (originally 31 March 2021, but subsequently extended).
As this deadline is now approaching, businesses who took advantage of the deferral scheme should act now by selecting one of the three available options below:
1) Pay the deferred VAT in full by 30 June 2021
Payment methods can be found at Gov.uk/VAT-Pay and you should ensure that your VAT registration number is recorded as the payment reference, to enable HMRC to identify and allocate the payment against your liability.
2) Opt in to a new VAT deferral scheme online no later than 21 June 2021
When you decide to join the scheme will determine the maximum number of instalments that are available to you. The following table sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):
|If you join by:||Number of instalments available to you:|
|19 March 2021||11|
|21 April 2021||10|
|19 May 2021||9|
|21 June 2021||8|
Before joining, you must:
- have your VAT registration number
- create your own Government Gateway account (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)
If you are unable to join online or pay via direct debit, a request to join over the phone can be made through the HMRC coronavirus helpline on 0800 024 1222.
3) Make alternative arrangements to pay HMRC by 30 June 2021
If you are unable to pay the VAT liability through option 1 or 2, you must call HMRC on 0800 024 1222 as soon as possible (by 30 June) to make alternative arrangements.
If none of the above are actioned, HMRC may impose a penalty of 5% and/or interest in respect of any deferred VAT that remains outstanding at 30 June 2021.
Please do not hesitate to contact us if you have any query regarding the above.