Over half a million businesses deferred their VAT payments in 2020 taking advantage of the government’s support during the Coronavirus crisis.
In order to help businesses to make these deferred VAT payments, the government has recently set-up a HMRC portal to join the scheme and arrange a payment plan of smaller monthly installments.
Do You Qualify for the Scheme?
In order to qualify to take advantage of the Deferred Payment Scheme you will need to have deferred VAT payments between 20th March and 30th June 2020 under the VAT Payment Deferral Scheme.
Since March 2021, businesses have been able to access the scheme to make equal consecutive monthly VAT payments. Registration is not automatic however & you will need to opt-in to the scheme before your business can begin making these payments.
You will have until 21st June 2021 to opt-in to the VAT Deferred Payment Scheme
About the Deferred Payment Scheme
Before you decide to sign up to the deferred payment scheme, you should consider the following information about the scheme:
- Payments can be spread between 2 and 11 monthly installments of an equal amount.
- The payments are interest free, so you will only have to pay the deferred sum.
- The earlier your business opts in the more installments you can spread the cost over, and the lower the monthly cost will be.
- You can contact HMRC’s helpline to discuss additional help to pay. You must contact HMRC before 30th June 2021 or you may be charged interest or a penalty. Find out what to do if you cannot make payments.
You may be charged interest or incur a penalty if you do not:
- Pay the deferred VAT in full by 31 March 2021
- Opt into the new payment scheme by 21 June 2021
- Agree extra help to pay with HMRC by 30 June 2021
When you choose to sign-up to the scheme will determine how many installments you will be able to make:
If you join by
|Number of instalments available|
|19 March 2021||11|
|21 April 2021||10|
|19 May 2021||9|
|21 June 2021||8|
How to Set-up the Payment
You can sign up to the deferred VAT scheme here. However, according to HMRC, the digital opt-in process requires the set-up of a direct debit payment to be made, and therefore Price Davis will not be able to action this through our agents portal.
Before joining the scheme you must:
- Create your own Government Gateway account (if you do not already have one).
- Submit any outstanding VAT returns from the last 4 years – otherwise you’ll not be able to join the scheme.
- 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.
To use the online service you must:
- Join the scheme yourself, your agent cannot do this for you.
- 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 join.
- Pay your instalments by Direct Debit (if you cannot pay by Direct Debit, there is an alternative option).
While we are unable to act on this matter on your behalf, we can continue to advise you on the best option to take based on your specific circumstances.
For further information on Coronavirus business and individual support schemes you can visit our Resources page, or get in touch with us to talk with one of our experts. You can call us on 01452 812491, or send an email to email@example.com.