In a bid to help with cash flow and as part of HMRC’s ongoing COVID-19 support, all VAT registered businesses are now able to defer their VAT liabilities generated between March 20th and June 30^th 2020.

This blog explores the new scheme, how it works, how to register and what you need to do.

How does the scheme work?

The full deferred VAT payment was due by March 31^st 2021, but on February 11^th HMRC introduced the VAT deferral new payment scheme in a bid to help businesses that might be experiencing difficulties when paying any outstanding amounts.

Available between the 23^rd of February and the 21^st of June 2021, once you’ve registered and your business has been accepted, you’ll be able to pay any deferred VAT interest free in equal instalments.

Depending on when you join the scheme, you’ll be able to choose the number of instalments, between two and eleven.

How do you register your business?

To register, visit the gov.uk website. We advise that you set up your government gateway account as soon as possible, so that you’re able choose as many instalments as possible, as more will be available to you the sooner you register.

How else can you register?

You’re able to contact HMRC’s COVID-19 helpline by calling 0800 024 1222 once the scheme has opened.

Can your accountant register your business on your behalf?

Unfortunately only you can register your own business.

What other caveats are there?

To be eligible you must:

• Have four up-to-date latest VAT tax returns
• Still have deferred VAT to pay
• Have joined the scheme by the 21^st of July 2021
• Pay your first instalment upon joining
• Pay all instalments using direct debit

You’ll also still be eligible for the new scheme, even if you’re currently using other HMRC payment arrangements, such as Time to Pay or other outstanding debt tax and debts.

What happens if your business is on the VAT Payment on Account Scheme or the VAT Annual Accounting Scheme?

You’ll still be eligible for the new scheme, and will be able to join from 10/03/2021.

What’ll happen if you don’t pay by March 31^st, join the new scheme or arrange any additional support with HMRC?

You may face a payment penalty or interest.

How can Vantage Accounting help?

When it comes to the latest announcements from HMRC, our team of expert accountants have their fingers on the pulse. Don’t miss a single beat, get in touch today to find out how we can help you stay up to date and on the right side of the taxman.