We published a blog at the beginning of January 2021 in respect of VAT due between 20 March 2020 and 30 June 2020 which was deferred.  This was originally payable by 31 March 2021.  However, it is now possible to pay in instalments.

HMRC have recently announced that the scheme will be open from 23 February 2021, up to and including 21 June 2021.

The new scheme lets you:

• pay your deferred VAT in equal instalments, interest free
• choose the number of instalments, from 2 to 11 (depending on when you join)

To use the online service, you must:

• join the scheme yourself (GBM Accounts cannot do this for you)
• still have deferred VAT to pay
• be up to date with your VAT returns
• join by 21 June 2021
• pay the first instalment when you join
• pay your instalments by Direct Debit (if want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)

In respect of instalment options, the month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.

Further information is available here.

GBM Accounts

15 February 2021

In the spring of 2020, one of the measures for helping businesses to cope with Coronavirus was the ability to defer VAT which was due for payment between 20 March 2020 and 30 June (as mentioned here).  This was initially deferred until 31 March 2021.  HMRC subsequently brought in a further measure to help.  Businesses with a deferred VAT liability could opt to spread the cost over 2 to 11 interest free payments before March 2022. This is known as the New Payment Scheme.

The New Payment Scheme has to be opted into.  In order to use the scheme, there are a few conditions to meet:

• There must still be VAT to pay,
• The business must be up to date with its VAT returns,
• It must be able to pay the VAT by direct debit,
• It must be able to opt in and pay the first instalment by 31 March 2021.

In preparation for using the scheme, you should make sure that you have a Government Gateway account, if you don't already have one. You should also clean up your VAT account, which includes submitting any outstanding VAT returns and correcting any errors. Finally, you should make sure that you know how much you owe (the amount you originally deferred and how much, if anything, you've already paid).

More information is available from here.

NB at the time of writing (5.1.21), it was not possible to opt into the New Payment Scheme. If this is something which you wish to do, please revisit the HMRC page regularly to check for availability.