VAT Deferred due to Coronavirus (COVID-19)
Feb. 26, 2021, 12:19pm
As you may recall, in March 2020 the UK Government announced that VAT registered businesses with VAT payments due between 20 March 2020 and 30 June 2020 could choose to defer such VAT payments due to the effects of coronavirus (COVID-19)
At the time of the original announcement, any deferred VAT payment fell due to be repaid by March 2021. Subsequently, in late September 2020 the UK chancellor Rishi Sunak revealed that affected businesses would, as an alternative, be able to spread the deferred VAT payment due over a maximum of 11 smaller interest-free repayments under a new VAT deferral payment scheme. To take advantage of the payment scheme businesses were advised that they would need to ‘opt-in’ to the scheme and that this scheme would be opened for applications in early 2021 (see below).
If you deferred VAT payments due between 20 March 2020 and 30 June 2020 and still have payments to make, we would recommend that you consider your options as soon as possible. You can choose to:
- pay the deferred VAT in full, on or before 31 March 2021; or
- join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021 (see below); or
- contact HMRC by 30 June 2021 if you need extra help to pay.
VAT deferral new payment scheme
HMRC opened the VAT payment deferral new payment scheme on 23 February 2021 and it is now open to most VAT registered businesses who chose to defer such VAT payments – If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you’ll be invited to join the new payment scheme later in March 2021.
The VAT deferral new payment scheme can be joined using the following link; Pay VAT deferred due to coronavirus (COVID-19) – GOV.UK (www.gov.uk)
The new scheme allows you to pay your deferred VAT in equal instalments, interest-free, and to choose the number of repayment instalments from 2 to 11 (subject to the date you join).
If you join by 19 March 2021 then you can choose to re-pay the deferred VAT over the maximum 11 monthly instalments. The number of instalments available to you decreases over time:
| If you join by: | The number of instalments available to you: |
|---|---|
| 19 March 2011 | 11 |
| 21 April 2021 | 10 |
| 19 May 2021 | 9 |
| 21 June 2021 | 8 |
Whilst we cannot, as agents, opt-in to the scheme on behalf of your business we can, of course, offer advice as regards the opt in process or assist with any other questions you may have in relation to VAT deferred due to coronavirus (COVID-19).