In order to take advantage of the new payment, scheme businesses will need to have deferred VAT payments between March and June 2020, under the VAT Payment Deferral Scheme. They will now be given the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021.
. In order to qualify and opt into the new payment scheme, you must: • join the scheme yourself, your accountant cannot do this for you • still have deferred VAT to pay • be up to date with your VAT returns • join by 21 June 2021 • pay the first instalment when you join • pay your instalments by Direct Debit.
Businesses will need to opt-in to the VAT Deferral New Payment Scheme. They can do this via the online service that opens on 23 February and closes on 21 June 2021.
The new payment scheme is part of a wider government package of support, worth more than £280bn, which is helping to protect millions of jobs and businesses during the pandemic.
So far around £34bn has been injected into the UK economy following the half a million businesses who deferred their VAT payment last year. The new payment scheme will continue to help the economy recover by enabling businesses, impacted by the pandemic, to manage their business cash flow at a critical time.
Payments can easily be set up via the new payment scheme portal. Businesses can spread their payments with two to 11 equal monthly instalments, interest-free.
Payments can start from March 2021 and the earlier businesses opt-in the more instalments are available to help spread the cost and provide further support.
Deferred VAT can be paid in two to 11 consecutive installments starting in March, April, May or June 2021, without adding interest.
Payments can be made by direct debit.
Eligible businesses that are unable to use the online service can ring the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.
Source: AccountancyDaily