Deferred VAT Payments

VAT Deferral Payment Scheme

In March 2020 many businesses took advantage of HMRC’s offer to defer paying VAT due for periods ending 28 February, 31 March, or 30 April 2020 until 31 March 2021.

Since then, with the pandemic lasting much longer than could have been anticipated at the time, HMRC have given a further extension and offered payment plans as an option.

What is the deadline to pay my deferred VAT?

  • By 31 March 2021 if you would like to pay in full
  • OR
  • You can pay in instalments so long as the first instalment is made before 31 March 2021 and the full liability is paid off before 31 March 2022.
  • NO INTEREST will be charged on a payment plan providing the following conditions are met:

You must:

  • Still have the deferred VAT to pay – this is not applicable for any VAT returns outside the dates listed above
  • Be up to date with your VAT return filing
  • Opt in to pay by instalments before 31 March 2021
  • Pay the first instalment when you opt in

How do I opt in to a payment plan?

  • HMRC is still saying that you cannot opt in yet and that the process will be available in early 2021.
  • Please note that HMRC are also clear that this, like any other payment plan, is something which must be done by the individual or entity deferring the VAT – this is NOT something your agent can do for you.
  • As soon as we understand this to be open we will let you know.

In the meantime, there are things you can do to get ready:

  • You must create your own government gateway account if you don’t already have one
  • You must submit any outstanding Vat returns for the last 4 years
  • And correct any errors you have made previously
  • You should check how much you owe and have the amount ready, and/or
  • Consider how many instalments you want to spread the amount over
    • Minimum of 2 and maximum of 11 instalments

How will this affect other Time to Pay arrangements which I have in place for other schemes?

You can still have a time to pay arrangement for other HMRC debts and outstanding tax

What if you are still worried about being able to pay off this deferred VAT within the terms of this instalment plan?

If you still need time to pay beyond this then contact HMRC for a time to pay arrangement, by contacting them directly:

https://www.gov.uk/difficulties-paying-hmrc

Further details on this scheme can be found here:

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19#get-ready-to-opt-in-to-the-new-payment-scheme

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