TC Group: Detailed guidance on VAT deferral scheme

HMRC has now provided further detailed guidance notes on your payment options for VAT that was deferred in 2020.

The original deferral scheme was introduced to assist VAT registered businesses so that they did not have to make a payment with their VAT return during the VAT period ending between 20th March and 30th June 2020.

The VAT deferral new payment scheme extends the original deferral and will be open from 23rd February up to and including 21st June 2021. You will need to use your Government Gateway access to join the scheme – we cannot do this for you through our agent account.

Anyone on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme will be invited to join the new payment scheme later in March 2021.

The new scheme lets your business pay its deferred VAT in equal instalments, interest-free; and choose the number of instalments, from two to eleven (depending on when you join).

It is important to note that in order to use the online service, businesses and sole traders registered for VAT must:

  • join the scheme yourself;
  • still have deferred VAT to pay;
  • be up to date with your VAT returns;
  • join by 21st June 2021;
  • pay the first instalment when you join; and
  • pay instalments by direct debit (if want to use the scheme but cannot pay by direct debit, there’s an alternative entry route for you).

If you join the scheme, you may still have a Time to Pay arrangement for other HMRC debts and outstanding tax (subject to acceptance).

Please call your usual TC Group contact if you require further assistance on 0330 088 7111.