The online service to join the VAT deferral payment scheme is now open. Visit here
This scheme is open to businesses who have deferred VAT payments originally due between 20 March 2020 and 30 June 2020 and still have payments to make.
You can apply now to spread these payments over a number of months – the later businesses join; the fewer instalments are available to them.
Note that interest or a penalty may be charged if you do not pay the deferred VAT in full by 31 March 2021, opt into the new payment scheme by 21 June 2021, or agree extra help to pay with HMRC by 30 June 2021.
The new scheme lets you:
- pay your deferred VAT in equal instalments, interest free.
- choose the number of instalments, from 2 to 11 (see below).
To use the online service, you must:
- join the scheme yourself, an agent is unable to 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 join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.
If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you’ll be invited to join the new payment scheme later in March 2021.
Instalment options available
The month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.
The table below sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):
|If you join by:||Max number of instalments available|
|19 March 2021||11|
|21 April 2021||10|
|19 May 2021||9|
|21 June 2021||8|
Before you join the scheme
Before joining, 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.
Please contact us if you need assistance correcting any errors on your previous VAT returns.