The new payment scheme helps businesses with deferred VAT to pay what they owe in smaller, monthly instalments from March, interest free. The scheme is now open, and you can choose to make between 2 and 11 monthly payments, depending on when you join. The later you join the fewer instalments are available to you. You can join through a simple online service without needing to contact HMRC however you must join the scheme by 21st June 2021.
So, back at the beginning of the pandemic, if you chose to defer your VAT payment which would have been due between 20 March 2020 and 30 June 2020, here are your options:
pay the deferred VAT in full, on or before 31 March 2021
join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
contact HMRC on Telephone: 0800 024 1222 by 30 June 2021 if you need extra help to pay
You may be charged interest or a penalty if you do not:
pay the deferred VAT in full by 31 March 2021
opt into the new payment scheme by 21 June 2021
agree extra help to pay with HMRC by 30 June 2021
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 allows you to:
pay your deferred VAT in equal instalments, interest free
choose the number of instalments, from 2 to 11 (depending on when you join)
Instalment options available to you
The month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.
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):
How to Join
Before joining, you must:
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 have any questions regarding the scheme or need help with the set up of a payment plan, please get in touch with us at solutions@apexpb.co.uk
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