Matthew Upex from Moore Thompson discusses online VAT Deferral New Payment Scheme
Businesses that deferred VAT between March 20 and June 30, 2020 now have until March 31, 2021 to either repay the tax due in full or set up repayment instalments under the online VAT Deferral New Payment Scheme.
The scheme went live on February 23, 2021 and will close on June 21. It allows businesses with deferred VAT to spread their outstanding debts over up to 11 smaller instalments.
The length of repayment and the number of instalments required will depend on when a business joins this new scheme.
Before they can apply, businesses need to be up to date with VAT return filings for the last four years and correct any errors on existing VAT returns, as soon as possible.
They must also know how much VAT they owe and be ready to pay the first instalment when they join.
Payments should be made by direct debit where possible, although alternative payment methods are available on request.
Businesses can opt into the scheme by visiting www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
If a business cannot pay in full or via instalments then they can agree extra help to pay with HMRC by calling 0800 024 1222 by June 30, 2021.
Businesses may be charged interest or a penalty if they do not pay the deferred VAT in full by March 31, opt-in to the VAT Deferral New Payment Scheme or seek additional help to repay deferred VAT by the deadlines outlined above.
The scheme does not allow agents, such as accountants, to help businesses join the scheme, but they can assist with making sure that a business’s VAT affairs are in order and help them calculate how much they need to pay.
Businesses that are unsure of how they should repay deferred VAT should speak to their trusted advisers. At Moore Thompson, we will be helping many businesses with these important tasks.
n Find out more by visiting www.moorethompson.co.uk