Deferred VAT payment from March to June 2020

Deferred VAT payment from March to June 2020

If you deferred VAT between 20 March and 30 June 2020 and still have payments to make, you can:

• pay the deferred VAT in full on or before 31 March 2021
• opt in to the VAT deferral new payment scheme, thus giving you longer to pay it
• contact HMRC if you need more help to pay

Pay your deferred VAT

You can pay your deferred VAT in full by 31 March 2021.

In this case, you will need to pay online/via bank transfer by setting up the Payee as “HMRC – VAT” and quote your VAT Number as the payment reference – see here for HMRC’s sort code and account number https://www.gov.uk/pay-vat/bank-details 

You do not need to contact HMRC.

If you want to opt into the new payment scheme

The online new payment scheme portal opened on 23 February 2021 and will close on 21 June 2021.

You must opt in yourself – we as your agent cannot do this for you.

Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

The scheme allows you to:

• pay your deferred VAT in instalments without adding interest
• select the number of instalments from 2 to 11 equal monthly payments

To use this scheme, you must:

• still have deferred VAT to pay
• be up to date with your VAT returns
• opt in before the end of March 2021
• pay the first instalment before the end of March 2021
• be able to pay the deferred VAT by Direct Debit

If you opt into the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.

Get ready to opt in to the new payment scheme

Before opting in you must:

• create your own business Government Gateway account if you don’t already have one
• submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so
• correct errors on your VAT returns as soon as possible. Corrections received after 31 December 2020 may not show in your deferred VAT balance
• make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

You should also:

• pay what you can as soon as possible to allow us to show the correct deferred VAT balance
• consider the number of equal instalments you’ll need, from 2 to 11 months.

See here https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19#join-the-vat-deferral-new-payment-scheme for confirmation of this on HMRCs website.

If you are not able to pay your deferred VAT

If you are still unable to pay and need more time, find out what to do if you cannot pay your tax bill on time. 

Please call us on 01737 844 322 if you need any further assistance or advice..