The Government has announced that deferred VAT payments for the period between 20 March and 30 June 2020, which would be due on 31 March 2021, can now be paid in instalments.
Businesses which deferred paying their VAT due to Covid-19 were able to delay the payment until March 2021. However, they will now be able to spread that VAT over an even longer period up to March 2022 under a new arrangement which will be introduced shortly.
Businesses can use the New Payment Scheme to spread these payments over equal instalments up to 31 March 2022. You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Alternatively, they can make payments as normal by 31 March 2021 or make Time To Pay arrangements with HMRC if they need more tailored support.
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 time to pay arrangement for other HMRC debts and outstanding tax.
Please contact us if you would like any support on your deferred VAT payments.