Last call to join VAT deferral new payment scheme
Businesses that deferred VAT payments last year have one month left to join “VAT deferral new payment scheme” to pay in monthly instalments under the scheme, HMRC has confirmed. The online portal for the new payment scheme closes on 21 June 2021.
The scheme is open to businesses that deferred VAT due from 20 March to 30 June 2020 (under the VAT Payment Deferral Scheme) and still have payments to make.
- pay the deferred VAT in full, on or before 31 March 2021
- opt-in to the VAT Deferral New Payment Scheme online between 23 February and 21 June 2021
- contact HMRC by 30 June 2021 if they need to agree extra help to pay
You can pay your deferred VAT in 2 to 11 consecutive instalments starting in March, April, May or June 2021, without adding interest. Those joining online are able to set up direct debit payments. The joining date is slightly longer for those unable to use our online services due to the way payments are processed.
HMRC has said that businesses may be charged a ‘5% penalty’ and/or interest if they don’t join up to the scheme online by 21 June, or pay in full by 30 June, or contact HMRC to make an arrangement to pay by 30 June 2021.
Over half a million businesses deferred £34bn in VAT payments due between March and June 2020 under the VAT payment deferral scheme. HMRC data to 30 April 2021 shows 228,850 businesses that deferred their VAT last year have already paid their VAT in full. This, along with instalments already made under the new payment scheme and other payment plans, totals £15.1bn. Since the online service opened on 23 February 2021, another £11.5bn has already been committed to future installments by 134,627 businesses.
Jim Harra, chief executive for HMRC, said: “Businesses that deferred paying their VAT last spring have until 21 June to join the VAT deferral new payment scheme online. They should act now to avoid missing out on this opportunity to spread payment of their deferred VAT across monthly, interest-free, instalments.
Jim also pointed out, “The new payment scheme is part of the government package of support worth over £350 billion to help protect millions of jobs and businesses during the pandemic and as we emerge on the path to recovery. HMRC will continue to do all we can to help businesses as they reopen and rebuild.”
Payments can be set up via the VAT Deferral New Payment Scheme portal. Eligible businesses that are unable to use the online service by 21 June 2021 can phone the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.
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