The VAT deferral new payment scheme will be open from 23 February up to and including 21 June 2021

The Government allowed companies affected by COVID19 to defer the VAT due on any returns for quarters ending February 2020, March 2020 or April 2020. Originally, the deferred VAT was payable by 31 March 2021, but a subsequent announcement indicated that this VAT could be paid in instalments.

Note: If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you’ll be invited to join the new payment scheme later in March 2021.

If you don’t apply for the scheme, you MUST pay outstanding VAT by 31 March 2021

The new scheme lets you:

  • pay your deferred VAT in equal instalments, interest-free
  • choose the number of instalments, from 2 to 11 (depending on when you join)

To use the online service, you must:

  • join the scheme yourself, it is not something your agent, can do for you.
    Note: if you are a client, Pink are able to assist in making sure you have the appropriate access. Please get in touch if you would like us to support you in this process
  • still have deferred VAT to pay
  • be up to date with your VAT returns
  • join by 21 June 2021
  • pay the first instalment when you join
  • pay your instalments by Direct Debit (if want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)

If you join the scheme, you can still have a ‘Time to Pay’ arrangement for other HMRC debts and outstanding tax.

Instalment options available to you

The month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.

Instalments Table
This table sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment).

Before you join the scheme

Before joining, you must:

  • make sure you have a Government Gateway account
  • submit any outstanding VAT returns from the last 4 years – otherwise, you’ll not be able to join the scheme
  • correct any errors on your VAT return as soon as possible
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

If you cannot use the online service

There may be circumstances where you cannot use the online service, for example, if you:

  • do not have a UK bank account
  • cannot pay by Direct Debit
  • have dual signatories on your account

If you want to join the new payment scheme, but cannot use the online service, contact the COVID19 helpline when the scheme opens on Telephone: 0800 024 1222

Please get in touch with the team for support in reviewing your VAT returns, reviewing your finances or ensuring you are prepared for the scheme opening on the 23rd Feb.