HMRC has announced a new online VAT Deferral New Payment Scheme for the businesses that deferred VAT payments last year. Businesses can now pay in smaller monthly instalments.
HMRC said that If businesses deferred VAT payments due between 20 March 2020 and 30 June 2020 and still have payments to make, they can:
- pay the deferred VAT in full, on or before 31 March 2021
- join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
- contact HMRC on Telephone: 0800 024 1222 by 30 June 2021 if you need extra help to pay
However, HMRC may charge interest or a penalty if someone does not pay the deferred VAT in full by 31 March 2021. To pay online businesses must opt in to the new payment scheme by 21 June 2021 to avoid penalty. Businesses that need extra help to pay must contact HMRC by 30 June 2021 to escape interest.
Commenting on the scheme, Jesse Norman, Financial Sectretary to the Treasury, said:
‘The government has provided a package of support worth over £280 billion during the pandemic to help protect millions of jobs and businesses.
‘This now includes the VAT Deferral New Payment Scheme, which will help provide businesses with the breathing space they may need to manage their cashflows in the weeks and months ahead.’