Online Portal To Defer VAT Opens
One of the measures HMRC put in place to assist businesses during the pandemic was the deferral of VAT payments which were due for payment between 20th March 2020 and 30th June 2020. At the time HMRC advised that any unpaid VAT would have to be settled by 31st March 2021.
As new lockdowns were introduced, businesses remained unable to trade as usual and have struggled with cashflow. HMRC is keen to assist businesses trade out of the crisis and has therefore announced that those who require more time to pay can apply to pay their outstanding VAT by January 2022.
Outstanding VAT can be spread over 2 – 11 instalments which are payable by direct debit. The maximum number of payments depends on when you join the scheme as set out below.
Join by 19/03/2021 up to 11 instalments
Join by 21/04/2021 up to 10 instalments
Join by 19/05/2021 up to 9 instalments
Join by 21/06/2021 up to 8 instalments
The new payment scheme opens on the 23rd February 2021 and must be accessed via the HMRC online portal by clicking here. As a direct debit will need to be arranged, accountants and other agents will not be able to do this for their clients so business owners will need to log in themselves. Many taxpayers already use the HMRC tax portal to access their personal tax, corporation tax, PAYE or VAT records – this might be the time to make sure your online tax account is set up. If you can’t access your account, the HMRC Covid helpline (0800 024 1222) will be able to assist with setting up a plan.
Some key points regarding the scheme to note:
- To qualify, all outstanding VAT returns from the last four years should have been submitted
- Any outstanding error corrections made.
- You need to know how much VAT was deferred and how much is still outstanding
- If you want, you can make payments towards the amount deferred, so that the subsequent instalments required will be smaller.
- You must be able to pay the first instalment immediately as the number of instalments includes the first payment that will be taken when you join the scheme.
- If you are on the VAT Annual Accounting Scheme you will be invited to join the payment scheme in March 2021
If you have any questions, please do not hesitate to get in touch or contact me directly with any questions at yedidya.zaiden@raffingers.co.uk or click here to get in touch with our team today.