VAT Deferral: New Payment Scheme

  1. How can I opt-in to the new payment scheme?
  2. How many instalments can I pay my deferred VAT in?
  3. I am having difficulty using the online service, what can I do?
  4. What if I am still not able to pay my deferred VAT?

If you deferred VAT between 20 March and 30 June 2020 and still have payments to make, it is not too late to opt-in to the VAT deferral new payment scheme but you must be quick! In this new scheme, instead of paying the full amount, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

How can I opt-in to the new payment scheme?

Please note that to use this scheme you must:

  • still have deferred VAT to pay.
  • be up to date with your VAT returns.
  • opt in before 21 June 2021.
  • be able to pay the deferred VAT by Direct Debit.

If you wish to opt-in to the scheme, you can do so by using the web portal on the gov.uk website. If you are going to use the portal, you will need to ensure that you:

  • create your own Government Gateway account if you don’t already have one.
  • submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so.
  • correct errors on your VAT returns as soon as possible. Corrections received after 31 December 2020 may not show in your deferred VAT balance.
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid.

You should also:

  • pay what you can as soon as possible to allow us to show the correct deferred VAT balance.
  • consider the number of equal instalments you’ll need, from 2 to 11 months.

If you opt in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.

How many instalments can I pay my deferred VAT in?

Those who joined on or before 19 March 2021 had the option to pay their deferred VAT in up to 11 monthly instalments. As almost three months have passed since then, if you join the scheme before the 21 June deadline, you will have the option to pay your deferred VAT in up to 8 monthly instalments.

I am having difficulty using the online service, what can I do?

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 have any of the above issues (or any other issue which means you can’t use the online service), you can contact the COVID-19 helpline. An advisor will then help you to join.

What if I am still not able to pay my deferred VAT?

If you are still unable to pay and need more time, find out what to do if you cannot pay your tax bill on time by clicking here.

If you have any questions regarding paying or deferring your VAT, please contact your usual Partner or Manager or call us on 01942 242 245 and we will be happy to help.