HMRC have announced the launch date for their new VAT deferral payment scheme.

We detail below how to make use of the scheme and the other options that you currently have to settle the liability.

 

  1. What Are My Options?

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

  • pay the deferred VAT payment in full on or before 31 March 2021;
  • opt into the VAT deferral payment scheme using the online service between 23 February and 21 June 2021;
  • contact HMRC by 30 June 2020 if you need more help to pay

 

  1. What Do I Gain From Opting In?
  • Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free
  • You select the number of instalments from 2 to 11 equal monthly payments

 

  1. Am I Eligible For The Scheme?
  • To use this scheme you must:
    • Still have deferred VAT to pay;
    • be up to date with your VAT returns;
    • join by 21 June 2021;
    • pay the first instalment when you opt in;
    • pay your instalments by Direct Debit

 

  1. What If I Want To Opt In To The New Payment Scheme?
  • The VAT deferral new payment scheme will be open from 23 February up to and including 21 June 2021
    • You must opt in yourself, we cannot do this for you
  • If you are on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you will be invited to join the new payment scheme later in March 2021

 

  1. Instalments Options available
  • The month you decide to join the scheme will determine the maximum number of instalments that are available to you;
  • If you join the scheme in March you’ll be able to pay your deferred VAT in 11 instalments or fewer.
  • The number of instalments reduces by one for every month that passes from the launch date of the scheme

 

  1. What If I Have Other Time To Pay Arrangements?
  • You can still have a time to pay arrangement for other HMRC debts and outstanding tax.

 

  1. Can I Prepare Now To Opt In To The New Payment Scheme?
  • You will need to use your own Government Gateway account; so if you have not set up one it is time to do so on-line https://www.gov.uk/log-in-register-hmrc-online-services
  • 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
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid
  • consider the number of equal instalments you’ll need, from 2 to 11 months

 

  1. What If I Am Not Able To Pay My Deferred VAT
  • If you are unable to pay the VAT due and need additional time to pay, or are unable to use the online service, you should contact HMRC before the payment is due.
  • For help, either
    • Contact Lisa Garfinkle (lisag@barrons-bds.com) at Barrons who will be able to assist you and contact HMRC on your behalf if you prefer, or
    • Contact HMRC direct by
      • Using the GOV‌‌.UK website and search for ‘If you cannot pay your tax bill on time’, or
      • Call 0800 024 1222.

Barrons has put together a helpful guide to running your business during the coronavirus crisis.