HMRC has updated its guidance for VAT-registered businesses who deferred their VAT between 20th March and 30th June 2020, due to the Covid-19 pandemic.
Businesses who still have payments to make can:
- Pay the full deferred VAT amount on or before 31st March 2021
- Opt into the new payment scheme that launches in 2021
- Contact HMRC if more help is needed to pay the VAT
If the choice is made to opt into the new payment scheme, businesses will only be able to do so when it launches in early 2021. The scheme allows for up to 11 smaller monthly instalments to be paid, interest free. All instalments must be paid by the end of March 2022.
The scheme allows for businesses to:
- Pay deferred VAT in instalments without added interest
- Select between 2 to 11 equal monthly instalments
In order to be eligible for this scheme the following criteria must be met:
- Still have deferred VAT to pay
- Vat returns are up to date
- Pay deferred VAT by Debit Card
Time to pay arrangements will still be available for other outstanding HMRC debts, when opting into the new payment scheme.
HMRC have issued further guidance for businesses on how to get ready to opt into the new payment scheme. Businesses must opt themselves into the scheme, they cannot have an agent do so on their behalf. Further information can be found on the government website.