VAT Deferral New Payment Scheme

Businesses that deferred VAT payments last year can join the new scheme to pay it in smaller monthly instalments.

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

• Pay the deferred amount in full, on or before 31 March 2021
• Join the VAT deferral new payment scheme –the online service opened on 23 February 2021 and is open until 21 June 2021

If you do not pay the deferred VAT in full by 31 March 2021 or opt into the new payment deferral scheme by 21 June 2021 you may be charged interest or a penalty.

The new scheme allows you to :

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

The month you join the scheme will determine the maximum number of months you can spread the liability over. If you join the scheme in March, you will be able to pay your deferred VAT over 11 instalments or fewer if you wish.

Below is a table, which sets out the joining deadlines and number of maximum instalments available:

Before joining, you will need:

• A Government Gateway account ( you will need to set one up if you do not have one, see here on how to do this)
• Submit any outstanding VAT returns from the last 4 years – if there are any outstanding you will not be allowed to join the scheme
• Correct any errors on VAT returns as soon as possible
• Make sure you know how much VAT you owe, including the amount you originally deferred and how much you may have already paid.

To join the scheme, you must:

• Join the scheme yourself, unfortunately we are unable to register for this scheme on behalf of clients,
• Still have deferred VAT left to pay
• Be up to date with all VAT returns
• Join by 21 June 2021
• Pay the first instalment when you join
• Pay your instalments by Direct Debit ( if you want to use the scheme but are unable to pay by Direct Debit there is an alternative way to set up the scheme you will need to contact the COVID-19 helpline on the telephone: 0800 024 1222.)

If you think this would be useful to your business, go to the gov.uk website and register to join the interest free VAT payment deferral scheme here

We are unable to register you for this scheme however if you need any assistance such as help bringing VAT returns up to date, or correcting errors then please do not hesitate to get in touch today.