The online portal for the new payment scheme closes on 21 June 2021.
Over half a million businesses deferred £34bn in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme. Businesses had until 31 March 2021 to pay this deferred VAT or, if they could not afford to do so, they could go online from 23 February to set up a new payment scheme and pay by monthly instalments to spread the cost.
HMRC data to 30 April 2021 shows 228,850 businesses that deferred their VAT last year have already paid their VAT in full. This, along with instalments already made under the new payment scheme and other payment plans, totals £15.1bn. Since the online service opened on 23 February 2021 another £11.5bn has already been committed to future instalment payments by 134,627 businesses.
Jim Harra, HMRC’s chief executive, said: ‘Businesses that deferred paying their VAT last spring have until 21 June to join the VAT Deferral New Payment Scheme online. They should act now to avoid missing out on this opportunity to spread payment of their deferred VAT across monthly, interest-free, instalments.
‘The new payment scheme is part of the government package of support worth over £350bn to help protect millions of jobs and businesses during the pandemic and as we emerge on the path to recovery.
‘HMRC will continue to do all we can to help businesses as they reopen and rebuild.’
Jesse Norman, financial secretary to the Treasury, said: ‘The VAT Deferral New Payment Scheme means businesses can now manage their cash flow by paying their deferred VAT more gradually, continuing to protect jobs across the UK as we emerge from the pandemic and build back better.’
Businesses can spread their payments across up to eight equal monthly instalments, interest-free, if they join by 21 June 2021.
Those who fail to sign up for the scheme can be charged a 5% penalty and/or interest if they do not join the scheme online by 21 June, or pay in full by 30 June, or contact HMRC to make an arrangement to pay by 30 June 2021. Businesses should also contact HMRC by 30 June 2021 if they need to agree extra help to pay.
The scheme launched on 23 February 2021 and is open to businesses that deferred VAT due from 20 March to 30 June 2020 (under the VAT Payment Deferral Scheme) and still have payments to make.
The VAT Deferral New Payment Scheme will require a Direct Debit to be set up as part of the digital joining process and this must be done by the authorised bank account holder. Because of that, HMRC is unable to provide an agent service for the scheme.
Payments can be set up via the VAT Deferral New Payment Scheme portal. Eligible businesses that are unable to use the online service by 21 June 2021 can phone the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.
Source: HMRC and AccountancyDaily