Businesses who deferred VAT payments due between 20 March 2020 and 30 June 2020 and who still have payments to make now have three options available to pay the deferred VAT to HMRC.
1 – Pay deferred VAT in full
The deferred VAT can be paid in full by 31 March 2021.
Details of how to pay including HMRC bank account details to use for different payment methods can be accessed from this webpage www.gov.uk/pay-vat
2 – Join the VAT deferral new payment scheme
This scheme is open for most businesses. It will remain open until 21 June 2021.
The new scheme lets businesses pay the deferred VAT in equal instalments, interest free. Businesses can choose the number of instalments, up to a maximum of 11 if they join by 19 March 2021.
To join the scheme the VAT returns must be up to date and the instalments have to be paid by direct debit.
This webpage contains a link to sign up for the scheme: www.gov.uk/guidance/deferral-of-vat-payments-due-tocoronavirus-covid-19#join-the-vat-deferral-new-payment-scheme
Agents cannot do this on behalf of businesses.
If applications cannot be made online the COVID-19 helpline, telephone number 0800 024 1222, should be able to sign businesses up manually.
If errors have been made on returns where VAT has been deferred it may be possible to include these in your deferred payment plan by telephoning the COVID-19 helpline. HMRC must have been notified of the error using form VAT 652 and
have processed the error correction before joining the new payment scheme.
HMRC can take some time to deal with these forms so early notification is recommended if error corrections are to be processed in time.
3 – Contact HMRC by 30 June 2021 to agree extra help to pay
Contact the HMRC Payment Support Service to agree a Time to Pay arrangement. Their telephone number is 0300 200 3835 and their opening times are Monday to Friday 8am to 6pm.
Before agreeing any time to pay HMRC are likely to want to know what steps you have taken to try and pay the VAT, how much you can pay now and how long you will need to pay the balance, details of your income, expenditure and assets.
Be prepared before you call HMRC.
The sting in the tail
You may be charged interest or a penalty if you do not:
- pay the deferred VAT in full by 31 March 2021,
- opt into the new payment scheme by 21 June 2021, or
- agree extra help to pay with HMRC by 30 June 2021