Businesses who deferred their VAT payment which was due to be paid between 20 March and 30 June now have 3 options for payment.
1. You can pay the deferred amount in full by 31 March 2021
2. You can opt in to the VAT deferral payment scheme when it launches in early 2021
3. You can contact HMRC for additional time to pay
If you choose Option 1 you can make the payment at any time up to and including 31 March 2021. You do not have to contact HMRC to advise them when you are making the payment.
If you choose Option 2 you can make between 2 and 11 monthly instalments interest free with the final payment being made by 31 March 2022.
However you can only use Option 2 if you have deferred VAT outstanding, it will not apply to other unpaid VAT. You must have submitted all outstanding VAT returns, submitted corrections to VAT returns where due by 31 December 2020, be able to pay the first instalment by the end of March 2021 and the final one before the end of March 2022 and agree to pay by direct debit. This scheme will open early in 2021 and you must opt in to it before the end of March 2021.
You will be able to apply for this scheme through your business Government Gateway tax account as your VAT agent will not be able to do it for you.
If you are not able to choose either Option 1 or Option 2 you will need to contact HMRC to arrange a payment plan with them. This link to HMRC will give you details of how to do this for all taxes if you have difficulty paying.
