The government is allowing businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022.
Over half a million businesses deferred VAT payments.
Rather than paying in full at the end of March 2021, businesses will be able to choose to make 11 equal instalments over 2021-22.
All businesses which took advantage of the VAT deferral can use the New Payment Scheme if they wish.
Businesses will need to opt in, but all are eligible.
HMRC will put in place an opt-in process in early 2021.
Chancellor Rishi Sunak explains more in a Treasury video.
Anyone choosing to pay their deferred VAT by 31 March 2021 will not need to contact HMRC.
HMRC has published some guidance on the payment scheme, but it says more details will be available in early 2021.
Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free.
All instalments must be paid by the end of March 2022.
The scheme will allow you to:
To use this scheme you must:
If you opt in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax, such as income tax..
Before opting in you must:
You should also:
If you are still unable to pay and need more time, you should contact your Bishop Fleming adviser.
HMRC has also provided information on what to do if you cannot pay your VAT bill on time.
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