Businesses that deferred VAT payments last year have one month left to join the VAT Deferral New Payment Scheme, allowing payments in monthly instalments, HM Revenue and Customs (HMRC) has said today.
The online portal for the new payment scheme closes on 21st June 2021.
Over half a million businesses deferred £34 billion in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme. Businesses had until 31st March 2021 to pay this deferred VAT or, if they could not afford to do so, they could go online from 23rd February to set up a new payment scheme and pay by monthly instalments to spread the cost.
Jesse Norman, financial secretary to the treasury, said: “The VAT Deferral New Payment Scheme means businesses can now manage their cashflow by paying their deferred VAT more gradually, continuing to protect jobs across the UK as we emerge from the pandemic and build back better.”
The March, April and May joining dates have passed, but businesses can still spread their payments across up to eight equal monthly instalments, interest-free, if they join by 21st June 2021. Payments can be set up via the VAT Deferral New Payment Scheme portal.
Eligible businesses that are unable to use the online service can ring the HMRC Coronavirus Helpline on 0800 024 1222 to join.
HMRC data to 30th April 2021 shows 228,850 businesses that deferred their VAT last year have already paid their VAT in full. This, along with instalments already made under the new payment scheme and other payment plans, totals £15.1 billion. Since the online service opened, another £11.5 billion has already been committed to future instalment payments by 134,627 businesses.
Businesses may be charged a 5% penalty and/or interest if they don’t join up to the scheme online by 21st June, or pay in full or contact HMRC to make an arrangement to pay by 30th June 2021.
Businesses should also contact HMRC by 30th June 2021 if they need to agree extra help to pay.