New payment arrangements for deferred VAT announced
The Government has announced new payment arrangements for VAT deferred between 20 March and 30 June 2020 due to the Covid-19 pandemic.
Businesses who deferred paying their VAT between 20 March and 30 June 2020 under coronavirus VAT deferral scheme, and who still have payments to make, now can either:
- pay the deferred VAT in full on or before 31 March 2021 (this can be done here);
- opt into the new VAT deferral payment scheme when it launches in 2021; or
- contact HMRC if they need more help to pay.
The new “opt in” scheme provides an alternative way for VAT to be paid. Instead of paying the full amount by the end of March 2021, it will be possible to make up to 11 smaller monthly instalments – interest free. All of these instalments must be paid by the end of March 2022. This is another welcome step from the Government to assist businesses in what are, for some of you, very difficult times.
The scheme will allow you to:
- pay VAT in deferred instalments without adding interest; and
- select the number of instalments from 2 to 11 equal monthly payments.
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. It is not possible to opt in yet; the online opt in process will be available in early 2021. This is something that you must do yourself, UNW will not be able to do this as your agent even if we already submit VAT returns on your behalf.
Further information on the scheme can be found here.
If you would like further guidance on this topic, please do not hesitate to contact one of our dedicated VAT specialists: Mark Hetherington, VAT Partner, on 0191 243 6073 or at firstname.lastname@example.org; or Ian Coulthard, VAT Senior Manager, on 0191 243 6017 or at email@example.com.
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