HM Revenue & Customs (HMRC) has announced that its online VAT Deferral New Payment Scheme is now open for applications to help businesses arrange smaller monthly repayments of deferred VAT.
Under the New Payment Scheme, you can repay VAT deferred between 20 March and 30 June 2020 in up to 11 instalments from March 2021 (the length of repayment and number of instalments will depend on when you join).
To use the online service, you must:
- Join the scheme yourself – agents cannot directly assist you;
- Have deferred VAT to pay;
- Be up to date with VAT return filings for the last four years;
- Correct any errors on VAT returns, as soon as possible;
- Make sure you know how much VAT you owe;
- Pay the first instalment when you join; and
- Pay instalments by Direct Debit (there are alternative payment methods on request).
If you intend to use this scheme, you will need to opt-in online between 23 February and 21 June 2021.
Businesses can also repay their deferred VAT in full by 31 March 2021 or agree extra help to pay with HMRC by calling 0800 024 1222 by 30 June 2021.
Businesses may be charged interest or a penalty if they do not pay the deferred VAT in full by 31 March, opt-in to the VAT Deferral New Payment Scheme or seek additional help to repay deferred VAT by the deadlines outlined above.
If a business decides to use the New Payment Scheme it will not affect its ability to request a Time to Pay arrangement from HMRC in future.
Although agents, such as accountants, can’t join the scheme on your behalf, our team can help you get your VAT affairs in order and figure out how much VAT you may owe. To find out more, please contact us.