Further measures have now been announced to help businesses with their VAT liabilities.
(Last updated 22.02.21)
As part of the January update, it was announced that businesses could choose to pay their VAT liabilities through up to 11 equal, interest free instalments up to end of March 2022. More specific information about the scheme has now been released.
For businesses who wish to join the new scheme, this will be open from February 23 until June 21, 2021. To qualify for this service, you must meet a set of criteria including, but not limited to, the following:
- You must still have deferred VAT to pay.
- You must be up to date with your VAT returns.
- You must join by June 21, 2021.
- You must pay the first instalment upon joining.
Deferred VAT liabilities would still be due for payment by the end of March 2021 unless businesses opt into the new scheme. Businesses that opt in can still have a Time to Pay arrangement for other outstanding taxes or debts.
The number of instalments available to you will depend on your joining date, with early joiners (before March 19) getting the maximum 11 instalments.
For more information and instructions on how to join the scheme, visit the UK Government website.
(Previous update 06.01.21)
Where businesses deferred VAT due from 20 March to 30 June 2020 these liabilities would be due for payment in full by the end of March 2021.
Under the new measures announced, instead of businesses paying the full amount by the end of March 2021, they can now choose to make 11 equal instalments up to the end of March 2022, interest free.
Businesses will need to opt-in to the scheme with HMRC providing further specifics of this scheme in due course. Please refer to the HMRC guidance for more details.
(Previous update 30.03.20)
Further to our recent article on HMRC extending their Time To Pay (TTP) service, it was also announced late on Friday 20 March that the government will automatically defer any VAT liabilities arising for payment between 20 March 2020 and 30 June 2020.
The payments will not need to be made until the end of the 2020-2021 and it has been confirmed that interest or penalties will not be levied. This is an automatic deferment and there is no need for businesses to make a formal claim to HMRC. Instead, a business should simply not make payment to HMRC.
We would recommend that any business wanting to defer their VAT liability during this period that normally has their VAT collected by direct debit to contact their bank to cancel this arrangement to ensure that the VAT isn’t collected.
This cash flow injection to businesses will be welcome news to business owners in the current climate.
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