Coronavirus – Opting into the VAT Deferral New Payment Scheme

 Coronavirus – Opting into the VAT Deferral New Payment Scheme 

Any business that deferred VAT payments due between 20 March and 30 June 2020, as a result of the Coronavirus pandemic, must now consider how they will repay this outstanding tax.

To help, HM Revenue & Customs (HMRC) is giving businesses several options to choose from to allow them to manage the financial burden of VAT repayments. Here are the following options available to those businesses affected:

pay the deferred VAT in full by 31 March 2021;

join the VAT Deferral New Payment Scheme (VDNPS); or

contact HM Revenue & Customs (HMRC) to agree extra help to pay by 30 June 2021.

The VDNPS opened on 23 February and will close on 21 June 2021. It provides businesses with the option to pay deferred VAT in equal interest-free instalments.

Under the scheme, you can repay deferred VAT in up to 11 instalments from March 2021 (the length of repayment and number of instalments will depend on when you join).

Businesses that are already on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, will be invited to join the VDNPS in March.

To use the online service, you must:

join the scheme yourself – agents cannot directly assist you;

have deferred VAT to pay;

be up to date with VAT return filings for the last four years;

correct any errors on VAT returns, as soon as possible;

make sure you know how much VAT you owe;

pay the first instalment when you join; and

pay instalments by Direct Debit (there are alternative payment methods of payment on request).

If you intend to use this scheme, you will need to opt-in online by 21 June 2021.

Click here to join the scheme today

As mentioned, businesses can also repay their deferred VAT in full by 31 March 2021 or agree extra help to pay with HMRC by calling 0800 024 1222 by 30 June 2021.

Businesses may be charged interest or a penalty if they do not pay the deferred VAT in full by 31 March, opt-in to the VAT Deferral New Payment Scheme or seek additional help to repay deferred VAT by these deadlines.

If a business decides to use the New Payment Scheme it will not affect its ability to request any additional Time to Pay arrangements from HMRC in future.

Although agents, such as our experienced team at UK VAT Advice, can’t join the scheme on your behalf, we can help you get your VAT affairs in order and figure out how much VAT you may owe. To find out more, please contact us.  

Coronavirus – Opting into the VAT Deferral New Payment Scheme
Coronavirus – Opting into the VAT Deferral New Payment Scheme

Coronavirus – Opting into the VAT Deferral New Payment Scheme