At the start of the pandemic, HMRC allowed businesses with a VAT liability falling due between 20 March and 30 June 2020 to defer their payment. Over half a million businesses benefitted from the measure, deferring more than £28 billion in VAT payments.
Originally, businesses were required to pay the deferred VAT in full on or before 31 March 2021. However, as part of the Winter Economy Plan announced on 24 September 2020, businesses can choose to opt into the VAT Deferral Scheme when it launches in 2021. The Scheme will allow businesses to:
- Pay your deferred VAT in instalments without any interest, and
- Select the number of instalments from 2 to 11 equal monthly payments.
All payments must be made by 31 March 2022.
To use this Scheme, your business must:
- Still have deferred VAT to pay,
- Be up to date with your VAT returns, and
- Be able to pay the deferred VAT by Direct Debit.
Further details, including how to get ready to opt in to the scheme, can be found here: Pay VAT deferred due to coronavirus (COVID-19) – GOV.UK (www.gov.uk)
You will be able to opt into the scheme from early 2021, please get in touch with your local Whiting & Partners contact for more information.