HMRC have now released details for paying VAT payments that were deferred between 20th March and 30th June 2020.

Businesses can choose to pay the full amount by 31st March 2021 or join the VAT deferral payment scheme.

Payment in full by 31st March 2021

Businesses can pay their deferred VAT in full by 31st March 2021. There is no need to contact HMRC in order to do this.


VAT Deferral new payment scheme

The VAT deferral new payment scheme will be open from 23rd February 2021 through to 21st June 2021.

The new scheme will allow a business to

  • Pay the deferred VAT in equal installments, interest free
  • Choose the number of installments over which you can repay the deferred vat which can be between 2 and 11 depending on when it is joined). To be able to maximise the number of installments the scheme should be joined by 19th March 2021.

For a business to use the online service it must

  • Apply to join the scheme (an agent cannot do this on your behalf)
  • Still have deferred VAT to pay
  • be up to date with VAT returns
  • Join on or before 21st June 2021
  • Pay the first installment when you join
  • Pay the instalments by direct debit

If the business joins the scheme it can still utilise ‘Time to Pay’ arrangements for other HMRC debts and outstanding tax.

Before joining the VAT deferral new payment scheme you must :

  • Have your own Government Gateway account  (Or create one if you do not already have one ….follow this link)
  • Ensure that any outstanding VAt returns from last 4 years have been submitted
  • Make sure you know how much you owe, including the amount originally deferred, and how much you have already paid.