Businesses are required to opt-in to the VAT Deferral New Payment Scheme and are able to do so through the online service that opened back in February and closes on June 21, 2021. In order to benefit from the new payment scheme, businesses will have had to deferred VAT payments between March and June 2020, under the VAT Payment Deferral Scheme. Those who did will be able to pay their deferred VAT in equal consecutive monthly instalments, from March 2021.
Payments can be spread from between two and 11 equal monthly instalments, which will be interest free. Payments can commence from March 2021, and businesses are being encouraged to opt-in sooner rather than later so that more instalments are available to them, which could help them to spread the cost.
Businesses that are eligible, but unable to use the online service, can contact the HMRC Coronavirus Helpline on 0900 024 1222 to join the scheme.
There is further information relating to what businesses must do prior to opting-in available online, but some of the key steps for businesses include:
- Creating their own Government Gateway account (if they don’t already have one)
- Submitting any outstanding VAT returns from the last four years (if they don’t do this, then they won’t be able to join the scheme)
- Correcting errors on their VAT returns as soon as possible
- Ensuring they know how much they owe, inclusive of the amount they originally deferred, and how much they have already paid