Reminder - VAT Deferral New Payment Scheme

Reminder - VAT Deferral New Payment Scheme

In previous communications we explained that a Payment Scheme had been introduced by the Government to help businesses pay deferred VAT.

Deferred VAT is due to be paid at the end of March 2021. However under the new payment scheme Businesses will be able to make 11 smaller interest free repayments in the 12 months to 31 March 2022.

HMRC’s guidance on the new scheme explains that to use it you must:

• Opt in before the end of March 2021
• Still have deferred VAT to pay
• Be up to date with your VAT returns
• Pay the first instalment before the end of March 2021
• Be able to pay the deferred VAT by Direct Debit

You must opt in yourself, your agent cannot do this for you. The online opt in process was to be made available in early 2021 but is still not available  - HMRC’s website should therefore be  checked regularly. 

If you plan to opt in we suggest you don’t leave it to the last minute. Before opting in you must:

• Create your own 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

We are here to provide help wherever this is required. For further information please contact your local Azets contact.