BUSINESS
VAT Deferred Amounts
HMRC Announce Methods for Repayment
BY GREG MAYNE , VAT DIRECTOR , AZETS
IN MARCH 2020 , A PAYMENT SCHEME WAS INTRODUCED BY THE GOVERNMENT TO HELP BUSINESSES PAY DEFERRED VAT . THIS WAS DUE TO BE PAID AT THE END OF MARCH 2021 , HOWEVER BUSINESSES WILL BE ABLE TO MAKE 11 SMALLER INTEREST FREE REPAYMENTS IN THE 12 MONTHS TO 31 MARCH 2022 .
If VAT payments due between 20 March and 30 June 2020 were deferred and remain due to HMRC you will be able to :
• Pay the deferred VAT in full , on or before 31 March 2021 .
• Join the VAT deferral new payment scheme between 23 February and 21 June 2021 .
• Contact HMRC before 30 June if you need further support / help to pay ( telephone : 0800 024 1222 ).
You may be charged interest or a penalty if you do not meet these deadlines outlined by HMRC .
Under the guidance surrounding the new payment scheme you must :
• Opt in before the end of March 2021 .
• Still have deferred VAT to pay .
• Be up to date with your VAT returns .
• Pay the first instalment before the end of March 2021 .
• Be able to pay the deferred VAT by Direct Debit
You must opt in yourself , your agent cannot do this for you . The VAT deferral new payment scheme will be open from 23 February up to and including 21 June 2021 .
If you plan to opt-in don ’ t leave it to the last minute . Before opting into the scheme , you must :
• Create your own Government Gateway account if you don ’ t already have one .
• Submit any outstanding VAT returns from the last four years – you will not be able to join the scheme if you have not done so .
• Correct errors on your VAT returns as soon as possible – corrections received after 31 December 2020 may not show in your deferred VAT balance .
• Ensure you are aware of how much you owe , including the amount you originally deferred and how much you may have already paid .
If you are on the VAT Annual Accounting Scheme , or make VAT Payments on Account you will be invited to join the new payment scheme later in March 2021 .
If you join the scheme you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax .
Deferring extra payments resulting from error corrections
You will be able to contact HMRC ’ s COVID- 19 helpline ( telephone : 0800 024 1222 ) if you want to defer extra payments resulting from error corrections , but you can only do so after both of the following have happened :
• HMRC have processed your error correction .
• You ’ ve received a statement of account confirming the balance .
After joining the scheme you cannot include extra payments . Any error correction relating to the deferral period that is notified to HMRC after 31 March 2021 ( previously 29 January 2021 ), cannot be deferred .
Instalment options
The maximum number of instalments available to you will be determined by the month you join the VAT deferral new payment scheme . For example , if you join the scheme in March 2021 , you will have the opportunity to pay your deferred VAT in 11 instalments or less .
The table below outlines the number of instalments available to you , dependent on the month you join :
Join by
19 March 2021 21 April 2021 19 May 2021 21 June 2021
We are here to provide help wherever this is required . For further information please contact your local Azets contact or email : greg . mayne @ azets . co . uk .
Local offices : Ashford : 01233 629 255 / Canterbury : 01227 454 861 Maidstone : 01622 690 666 / Orpington : 01689 827 505 Sandwich : 01304 249 997
Number of instalments available
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