01 12 2020
UK Taxpayers May Arrange Payment Of Deferred VAT In 2021
HM Revenue and Customs has confirmed that UK businesses who wish to pay their deferred VAT liabilities in installments will be able to decide a payment schedule early next year.
Businesses that deferred VAT due between March 20 and June 30, 2020, were to be required to pay in full on or before March 31, 2021. However, as a concession, the Government previously announced that businesses will be able to pay in installments.
In a November 20 update to its guidance on these debts, HMRC said that the new payment scheme will launch in 2021. It will allow businesses to avoid the imposition of interest and pay the tax due in a chosen number of equal installments, of between 2 and 11, to be paid monthly.
To use the scheme, the business must be up to date with its VAT returns and be able to pay the deferred VAT by Direct Debit.
Before opting in, a business must:
- Create their own Government Gateway account if they don't already have one;
- Submit any outstanding VAT returns from the last four years; and
- Correct errors on their VAT returns as soon as possible.
HMRC said businesses who fail to correct VAT returns before December 31, 2020, may not have the correct amount of deferred VAT recorded when applying for the scheme.