The VAT payments deferral scheme ended on 30 June 2020. The following provides an update for businesses which deferred their VAT payments prior to that date.
How to access this scheme
If you deferred VAT payments due between 20 March and 30 June 2020 and still have payments to make, you 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 and 21 June 2021
- contact HMRC on Telephone: 0800 024 1222 by 30 June if you need extra help to pay
However, you may be charged interest or a penalty if you do not:
- pay the deferred VAT in full by 31 March 2021
- opt into the new payment scheme by 21 June 2021
- agree extra help to pay with HMRC by 30 June 2021
You can still pay your deferred VAT in full by 31 March 2021 and if you do so you will not need to contact HMRC.
For more details, click here.
Deferring tax – details of the scheme
Paying smaller amounts
On 24 September 2020, Chancellor Rishi Sunak made an announcement that businesses who deferred VAT due from 20 March to 30 June 2020 would have the option to pay in smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, businesses can make smaller, interest free payments up to the end of March 2022.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Those that can pay their deferred VAT can still do so by 31 March 2021.
If you are still unable to pay the VAT due and need more time, see the HMRC guidance about what to do if you cannot pay your tax bill on time. You can also call HMRC on 0300 200 3835.
For advice and information on other support available use the get help and support for your business guide.
What you need to do
If you’re a UK VAT-registered business that deferred VAT payments between 20 March 2020 and 30 June 2020, you now need to:
- if you have cancelled your Direct Debit to HMRC to take advantage of the deferral, you will need to set up a new Direct Debit arrangement in time for the first payment after 30 June.
- continue to submit VAT returns as normal, and on time (on or before 31 March 2021).
- pay the VAT in full on payments due after 30 June.
How to get help
If you need more help to pay your VAT, you may be eligible to get support with your tax affairs through HMRC’s Time To Pay service. This allows you to pay off your debt by instalments over a period of time.
Get more information if you cannot pay your tax bill on time.