NewsPenalty rate for covid deferred VAT

Penalty rate for Covid deferred VAT

HMRC has confirmed that companies will be liable for a 5% penalty or interest if they do not pay in full or make an arrangement to pay deferred VAT by 30 June 2021

Deferred VAT scheme

At the start of the covid pandemic, the government announced a three-month deferral of VAT payments for the first tax quarter of 2020, and payments for outstanding VAT are now due.

Choices for companies

Companies that deferred VAT payments due between 20 March 2020 and 30 June 2020 can either pay the deferred VAT in full now or join the VAT deferral new payment scheme. The online VAT deferral notification service opened on 23 February 2021 and is available until 21 June 2021.

What is VAT deferred payment scheme?

The VAT deferral payment scheme allows taxpayers to schedule payments on a monthly basis. The scheme lets you pay your deferred VAT in equal instalments, interest free; and choose the number of instalments by direct debit, from 2 to 11 (depending on when you join).

If you join by

Number of instalments

21 April 2021

10

19 May 2021

9

21 June 2021

8

You cannot include extra payments after you’ve joined the scheme. Any error correction relating to the deferral period that is notified to HMRC after 31 March 2021, cannot be deferred and interest will apply.

HMRC guidance, Pay VAT deferred due to coronavirus (Covid-19)

Penalty rate for covid deferred VAT
Penalty rate for covid deferred VAT

Our service to you

If you are a self employed, business owner/director of company looking to get your accountancy and taxation matters sorted, look no further. We, at Naail & Co, are pro-active and easily accessible accountants and tax advisors, who will not only ensure that all your filing obligations are up to date with Companies House and HMRC, but also you do not pay a penny more in taxes than you have to. We work on a fixed fee basis and provide same day response to all your phone and email enquiries. We will also allocate a designated accounts manager who would have better understanding of your and business financial and taxation affairs. Book a free consultation call using the link below.

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