HM Revenue and Customs (HMRC) has reminded businesses that deferred VAT payments last year to join the VAT Deferral New Payment Scheme to pay the amount in monthly instalments.
Businesses are being urged to join online before the portal for the new payment scheme closes in one month on 21 June. They also have the option to pay the deferred VAT in full by 30 June.
According to HMRC, over half a million businesses deferred £34 billion in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme. They had until 31 March 2021 to pay this deferred VAT or, if they could not afford to do so, they could go online from 23 February to set up a new payment scheme and pay by monthly instalments to spread the cost.
“Businesses that deferred paying their VAT last spring have until 21 June to join the VAT Deferral New Payment Scheme online. They should act now to avoid missing out on this opportunity to spread payment of their deferred VAT across monthly, interest-free, instalments,” Jim Harra, HMRC’s chief executive, said.
The new payment scheme is part of the government package of support worth over £350 billion to help protect jobs and businesses during the pandemic.
Jesse Norman, Financial Secretary to the Treasury, said: “The VAT Deferral New Payment Scheme means businesses can now manage their cashflow by paying their deferred VAT more gradually, continuing to protect jobs across the UK as we emerge from the pandemic and build back better.”
The March, April and May joining dates have passed, but businesses can still spread their payments across up to eight equal monthly instalments, interest-free, if they join by 21 June 2021.
As of 30 April 2021, 228,850 businesses that deferred their VAT last year have already paid their VAT in full, HMRC said, adding that a total of £15.1 billion has now received when combined with instalments already made under the new payment scheme and other payment plans.
Since the online service opened on 23 February another £11.5 billion has already been committed to future instalment payments by 134,627 businesses.
Eligible businesses that are unable to use online service by 21 June can ring the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June. Businesses may be charged a 5 per cent penalty and/or interest if they don’t join up to the scheme online by 21 June, or pay in full by 30 June, or contact HMRC to make an arrangement to pay by 30 June.
