VAT Deferral Scheme
Have you joined the new VAT payment deferral scheme? Following a recent announcement by HMRC, it is no longer business as usual. It instigates that millions of taxpayers who deferred VAT payments in 2020 can now join the online VAT deferral new payment scheme to settle in instalment bits.
The payment scheme window was open from 23rd February 2021 to and including 21st June 2021.
The VAT Deferral Scheme is part of a government support package initiative worth circa £280bn. It is designed to cushion millions of jobs and businesses during these pandemic stricken times. So far, the already injected £34billion plus into the UK economy has helped negatively impacted businesses manage their cash flow at a critical time.
Just what is VAT Deferral Scheme?
If you are reading this, then you must know that the VAT deferral scheme is the declaration that all businesses with a UK VAT registration have the option to defer VAT payments that were due between 20th March 2020 and 30th June 2020.
Businesses will have up to 31st March 2021. However, if you’re all caught up, the new deferral payment scheme open from February 2021 to 21st June 2021 came in handy.
If you are on the VAT Annual Accounting Scheme or the VAT Payment Account Scheme, joining the scheme was open since March 2021.
Payments are made through the new payment scheme portal. Businesses can spread their payments from 2 to 11 equal monthly instalments all, interest-free.
The earlier they opt-in, the more instalments are spread. Hence convenient for business owners.
All these can be made through direct debit. Additionally, eligible businesses that cannot use online service are free to contact the HMRC helpline (08000241222).
Deferral scheme eligibility measures for taxpayers entail:
- have deferred VAT to pay
- can pay deferred VAT by Direct Debit
- opt-in before the end of March 2021
- having updated VAT returns
- have paid the first instalment before the end of March 2021
- join by June 21st, 2021.
Taxpayers must attain the following to join:
- own a government gateway account
- submit any outstanding VAT returns from the last four years
- have error-free VAT returns
- ensure they have full knowledge of how much they owe; it includes the amount initially deferred and the sum already paid.
Typically, the VAT Payment Deferral Scheme is open to businesses that deferred VAT due from 20th March to 30th June 2020 but still have payments to make.
- pay the deferred VAT fully before 31st March 2021
- opt-in to the VAT Deferral New Payment Scheme online between 23rd February and 21st June 2021
- contact HMRC by 30th June 2021 if they need more time or help to pay.
Apply for the new VAT payment deferral scheme on time and avoid extra charges by HMRC for failing to comply. It is wise you contact the HMRC as soon as possible if you know you will not meet the stipulated deadline.
If you need help or have any questions about the VAT payment scheme, please contact Ernest & Co Accountants for further support.