To relieve struggling businesses of the pressure to settle their VAT liabilities during the peak of the Coronavirus pandemic, the Government allowed deferral of VAT payments due between 20 March and 30 June 2020.
Now, those with payments still outstanding need to make a decision about what to do next; either pay the deferred VAT in full on or before 31 March 2021 or to join the VAT deferral new payment scheme.
Whether you pay in full by 31 March or opt in to the new payment scheme by 21 June, interest and penalties will be avoided. Should you wish to settle your liability in full, details of how to do so can be found on the GOV.UK website, here.
What do I need to do to join the new payment scheme?
The VAT deferral new payment scheme, which lets businesses pay deferred VAT in interest-free instalments by Direct Debit, opened on the 23 February and will run up to and including 21 June 2021.
The scheme also allows flexibility in respect of the number of instalments, with businesses being able to choose any number from two, up to 11. The first instalment must be paid when you join.
However, the extent of the schemes flexibility will depend upon when you join – i.e. those joining on the final day of the scheme will only be able to select a maximum of eight instalments.
It is also worth bearing in mind that to use the service, you must be up to date with your VAT returns, have corrected any errors on your VAT returns, have calculated how much you owe, and have created a Government Gateway account.
We, as agents, cannot join the scheme on a clients behalf and so you must do this yourself. If you find you are struggling to join online, you can contact HMRCs COVID-19 helpline when the scheme opens on, 0800 024 1222.
How can George Hay help?
Whilst we cannot join the scheme for you, we can certainly be on hand to help you prepare, or indeed to decide whether opting into the scheme is the right thing for your business.
Our friendly team of business advisers and chartered accountants can help you to assess your current financial position and, indeed, whether you have the ability to settle your liability in full.
If you’ve already decided you’d like to join the scheme, but you’re concerned about outstanding VAT returns or errors that need correcting, we can help you to ensure that all your affairs are in order to allow you to join without any problems.
To find out more about the ways in which we can support your business, wherever you’re based in the UK, contact us today.