The Government has updated its advice for businesses that deferred VAT payments between 20 March and 30 June 2020 to include details about how to join the new VAT deferral payment scheme.
HMRC announced that the new scheme, which is an online service, will be open between 23 February and 21 June 2021. It has been launched to provide an alternative way for VAT to be paid; instead of paying the full amount by the end of March 2021, the scheme will make it possible to make up to 11 smaller monthly instalments – interest free.
The updated guidance states that businesses on the VAT Annual Accounting Scheme or VAT Payment on Account Scheme will be invited to join the new payment scheme later in March 2021. It will let you pay your deferred VAT in equal instalments – as well as the number of instalments (from 2 to 11, depending on when you join).
To meet the eligible criteria to opt into the scheme, you must still have VAT to pay under the VAT deferral scheme, be up to date with your VAT returns, and be able to pay the deferred VAT by Direct Debit. When the opt in process is open later this month, you must join the scheme by yourself, as UNW will not be able to do this as your agent even if we already submit VAT returns on your behalf.
If you do not want to opt into the new scheme, you can still pay the deferred VAT in full, on or before 31 March 2021, or contact HMRC if you need more help to pay.
Further information on the scheme can be found here.