Paying your deferred VAT
Any VAT payments due between 20 March and 30 June 2020 were deferred by a lot of businesses until 31 March 2021.
The due date for this deferred VAT was originally on or before the 31st March 2021. There are now a couple of options for paying this…..
To pay this VAT, you can:
• pay in full on or before 31 March 2021
• opt in to a new scheme that allows you to pay in instalments, until January 2022.
If you want to opt in to the new payment scheme
The online opt in process will be available in early 2021. You must opt in yourself, agents cannot do this for you.
Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.
The scheme will allow you to:
pay your deferred VAT in instalments without adding interest
select the number of instalments from 2 to 11 equal monthly payments
To use this scheme you must:
still have deferred VAT to pay
be up to date with your VAT returns
opt in before the end of March 2021
pay the first instalment when you opt in
If you opt in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.
Get ready to opt in to the new payment scheme
Before opting in you must:
create your own Government Gateway account if you don’t already have one
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
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.
You should also:
pay what you can as soon as possible to allow HMRC to show the correct deferred VAT balance
consider the number of equal instalments you’ll need, from 2 to 11 months.
