VAT Deferral New Payment Scheme

Source – HMRC

As part of the Winter Economy Plan, the Government announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, businesses can make smaller payments up to the end of March 2022, interest free.

They will need to opt-in to the scheme, and for those who do, this means that their deferred VAT liabilities do not need to be paid by the end of March 2021.

The VAT Deferral New Payment Scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder. Because of that, HMRC is unable to provide an agent service for the scheme.

We will communicate the details of the VAT deferral new payment scheme and its operation at the earliest opportunity to allow agents to appropriately advise and support their clients both prior to and during the opt-in process.

Businesses that can pay their deferred VAT should still do so by 31 March 2021.

The VAT payments deferral scheme ended on 30 June and all VAT customers, including MTD customers, are required to file and pay on time.

Customers face a penalty as well as being charged interest on any tax that is due if they do not meet their VAT obligations.

More information on surcharges and penalties can be found at www.gov.uk/vat-returns/surcharges-and-penalties.

If a business needs more help to pay their VAT, they may be eligible to get support with their tax affairs through HMRC’s Time To Pay (TTP) service. More information can found at https://www.gov.uk/difficulties-paying-hmrc.

Further help and guidance on complying with MTD for VAT is available

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