During Lockdown 1.0, business owners had the option to delay (defer) paying their VAT bill for VAT payments due between 20th March 2020 and 30th June 2020.
For most businesses, these VAT return periods were the periods ending:
- February 2020
- March 2020
- April 2020
Delay your deferred payments further
If you deferred your VAT during these periods, then your VAT payments are now due on 31st March 2021. However, the good news is that you can apply for a payment plan online, to further delay parting with the cash.
To do this, you need to join this new ‘VAT Deferral Payment Scheme’ between 23rd Feb and 21st June 2021.
What time frame can I pay the money over?
When you join the VAT Deferral Payment Scheme, the online system determines how many months you can spread the cost over. This will be up to 11 months.
You will be asked to pay an instalment shortly after the application. Further instalments then run from the following month, on a date of your choosing.
What do I need to use the scheme?
Simply submit any outstanding VAT returns, and then apply to join the scheme online by 21st June 2021.
Sadly, your accountants cannot apply for you. You need to do this online using your own account at the Government Gateway.
If you don’t have an account, register now with the Government Gateway.
If you don’t apply online before 21st June 2021, you will need to contact HM Revenue & Customs by phone on 0800 024 1222 to discuss a payment plan.
Step by Step Guide to Applying
Step 1: Information
First, gather all the information you will need, including your:
VAT registered address
VAT registration date (found on registration certificate)
Last VAT return submitted (for dates and amount)
Bank details for the payments
Step 2: Go Online and Log in
Now, click here to go to the snappily named “Deferral of VAT payments due to coronavirus COVID 19” page.
- Sign into your Gateway Account
- Register for an account if you don’t have one
Step 3: VAT details
- Enter your VAT number
- Enter your postcode (from the address shown on your VAT certificate)
- Enter the amount that was due from your last VAT return (‘Box 5’)
- Select month of your last VAT return. BE CAREFUL ON THIS. HMRC appear to ask for the month you last submitted your VAT return. What they actually mean is the last period you submitted a VAT return. This is the date on your last return, i.e. 31/03/20).
- Enter the date you became VAT registered.
If you have got any of the above information wrong, the process will stop and tell you they can’t find your business. Go back and check and correct – you get three attempts at this.
Step 4: Agreement and Payment Details
If the scheme system finds your business OK, you can continue as follows:
- Agree to their terms
- Agree the VAT deferral amount (this is auto-generated from their records)
- Select your preferred payment plan from those offered
- Choose which day of the month you want your payments to be taken
- Check and confirm the payment plan
- Choose either your business bank or personal account
- Enter your bank details
- Confirm the Direct Debit details & Direct Debit guarantee
- Print out you payment plan before logging off!
You should then be complete! Congratulate yourself on a job well done and have a celebration mug of coffee!
Can my accountant or tax agent sort this for me?
Unfortunately tax agents like us cannot help you apply for the VAT Deferral Payment Scheme. However, we can help with your VAT administration. So, if you are behind and need those outstanding VAT returns sorted – we can help.