COVID-19 VAT Deferral

New VAT Payment Scheme Details announced 

For businesses that took advantage of the opportunity to defer VAT payments for the period from 20 March to 30 June 2020, the deadline of 31st March 2021 for making repayment is fast approaching.

HMRC have announced that the on-line service for opting into the payment scheme will open on 23 February 2021 and opting into the scheme will be possible until 21 June 2021.

Take action now!

The VAT registered business that has deferred its VAT payment must opt-in – an agent cannot do this on its client’s behalf. Businesses will therefore need a Government Gateway account to be able to opt-in.

A condition to being able to opt-in is that all VAT returns must be up to date. If any returns are late or have otherwise not been submitted, the business will not be able to opt in to paying by instalments.

The first instalment must be paid on joining the scheme, with subsequent payments made by direct debit. The business will need to make sure they have the capacity to fund these payments. If this will be difficult, it is still possible to seek a time to pay arrangement with HMRC. Existing time to pay arrangements can continue to run alongside the VAT payment scheme.

VAT Instalment options

Businesses can decide to join between 23 February and 21 June 2021.  When a business opts in will determine the number of instalment payments that will need to be made:

Opt-in byInstalment payments
19 March 202111
21 April 202110
19 May 2021 9
21 June 20218

Contact us

If you have any questions, please discuss with your usual MHA Henderson Loggie contact or our VAT contacts noted below.

Alan Davis | VAT Partner & Chairman |

Allan Easton | VAT Consultant |