VAT Deferral Payment Scheme
Updated: Nov 27, 2020
What is the VAT Deferral payment Scheme?
Businesses who deferred VAT due from 20th March to 30th June 2020 will now 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 up to 11 smaller monthly payments, interest free. All instalments must be paid by the end of March 2022. You will need to opt-in to the scheme, and for those who do, this means that their deferred VAT liabilities do not need to be paid by the end of March 2021.
The VAT Deferral New Payment Scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder. Because of that, HMRC is unable to provide an agent service for the scheme. HMRC will let agents know the details of the VAT Deferral New Payment Scheme and its operation as soon as they can to allow us to appropriately advise and support our clients before and during the opt-in process. Businesses that can pay their deferred VAT should still do so by 31 March 2021.
You can find further information on GOV.UK by searching 'Pay VAT deferred due to coronavirus'.