Covid-19 VAT Deferment Scheme

Back at the beginning of the first lockdown, the Government announced that businesses who were struggling to pay VAT due between 20 March & 30 June 2020 could defer payment. Originally the deadline for making these deferred payments was 31 March 2021. However, as this date is fast approaching & we find ourselves still in lockdown, some flexibility has been given to allow businesses that took advantage of deferment more time to pay if they need it.

HM Revenue & Customs have set up an online VAT deferral service, which will be open from 23 February to 21 June 2021. (There will be different dates for businesses who are on the VAT Annual Accounting or Payment on Account schemes.)

The new scheme will allow businesses to pay their deferred VAT by equal instalments, which will be interest free. Payment must be made by direct debit.

The month you join the scheme will determine the maximum number of instalments available as follows:

If you do not join the scheme by 21 June, you may be charged interest or a penalty. However, if you are unable to join online (for example if you cannot pay by direct debit or you do not have a UK bank account) you can phone a new Covid-19 helpline on 0800 024 1222 & the deadline for joining is extended to 30 June 2021.
To join online you will need the following information:

• Your Government Gateway user ID & password (if you do not have a Government Gateway account already you can set one up here: https://www.gov.uk/send-vat-return Click on “start now” & then click on “create sign in details”)
• The amount of VAT that you deferred (net of any payments you have already made towards this amount)

More details can be found here:
https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

An application has to be made through your own account. We cannot make the application for you, but we would be happy to help, just get in touch with a member of our team.