Last year, HMRC gave businesses the option to defer payment of any VAT liabilities that arose between 20 March 2020 and 30 June 2020. Businesses who chose to defer their VAT now need to give some consideration to this. There are 3 options available.
1.Pay the deferred VAT in full on or before 31 March 2021.
2.Opt in to HMRC’s new VAT deferral payment scheme by 21 June 2021.
3.Contact HMRC by 30 June 2021 if you need more help to pay.
If you choose to pay the deferred VAT you will do so in your usual way. There is no need to contact HMRC.
If you choose to opt in to HMRC’s new VAT deferral payment scheme, instead of paying the full amount by the end of March 2021 you can make up to 11 smaller monthly instalments, interest free. All payments must be made by 31 March 2022. In order to be eligible for the payment scheme you must:
- Still have deferred VAT to pay.
- Be up to date with filing your VAT returns.
- Opt in to the scheme before 21 June 2021.
- Pay the first instalment when you opt in.
The opt in process will be available between 23 February 2021 to 21 June 2021.
If you do not feel you are able to meet the requirements of the VAT deferral payment scheme, you can contact HMRC’s Payment Support Service on 0800 024 1222 to discuss this further.