Date posted: 2021-03-03
At the start of the COVID-19 pandemic, HMRC issued a VAT deferral scheme. This was designed to help struggling businesses maintain cash flow. According to government statistics, over half a million businesses took advantage of the scheme.
Companies were able to defer VAT payments due between 20 March 2020 and 30 June 20020. If you deferred your VAT payments, it is now the time to either pay the liability in full (if you are able to) or to apply to the new VAT deferral payment scheme.
Pay deferred VAT in full
If this is an option for your business, the full balance of deferred VAT should be paid to HMRC by 31 March 2021.
Join new VAT deferral payment scheme
The new VAT deferral payment scheme allows you to pay your outstanding VAT liability in instalments. With no interest added. The sooner you sign up, the more time you will have to repay the balance. Those who sign up to the scheme before 19 March 2021 will be entitled to a maximum of 11 instalments.
You will be able to join the new scheme up until 21 June 2021. But by then you’ll be down to just 8 instalments.
The scheme went live on 23 February 2021. You can sign up here using your government gateway account. Unfortunately, even if your accountant normally acts as your agent when it comes to VAT, you’ll have to do this yourself. But don’t panic! It’s quite simple!
You’ll need your bank details to set up a direct debit mandate, then you can select the number of instalments you’d like to take.
If you have any questions, or if you’d like to talk to one of our experts, don’t hesitate to get in touch.
As always, we’re here to support our clients and associates. We’ll be holding a budget seminar this afternoon to run through Chancellor Rishi Sunak’s budget announcement; including what it means to you as a business owner.
