Deferred VAT Payment Deadline
The deadline of 31 March 2021 to repay any deferred VAT fast approaching but the problem is that many businesses are in the same position, or worse, than they were back when they deferred the VAT in the first place.
With cash flow concerns a real worry and the road to recovery still unclear, you might be wondering where you are going to find the cash to pay the deferred VAT, and may even be contemplating applying for a CBILS or Bounce Back Loan to help with this.
VAT Deferral New Payment Scheme
Luckily HMRC has announced a new online VAT Deferral New Payment Scheme that gives you the option to pay the VAT in equal monthly installments from March 2021.
Under the VAT Deferral New Payment Scheme businesses can spread their payments between 2 and 11 equal monthly installments, interest-free. The window for applying opened on 23 February 2021 and closes on 21 June 2021.
How to join the VAT Deferral New Payment Scheme
Payments can start from March 2021 and the earlier businesses opt-in, the more installments are available to help spread the cost. Once set up you can make the payments by direct debit.
To access the VAT Deferral New Payment Scheme you will need to opt-in to the scheme through your Business Tax Account. Your agent cannot join the scheme for you.
If for some reason you are not able to use the online service, or if you need extra help to pay, you can call the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme. Do be aware that call times to HMRC numbers are even longer than normal at the moment.
HMRC Penalties and interest
.You may be charged interest or a penalty if you don’t
- pay the deferred VAT liability in full by 31 March 21; or
- opt into the new payment scheme by 21 June 21; or
- agree an alternative arrangement to pay with HMRC
How can we help?
If you worried about how you will pay your VAT or other taxes then do get in touch as there are a number of ways we can support you. We can:
- Help you apply for a CBILS loan to bring extra cash into your business.
- Work with you to create a live cashflow forecast for your business so you know exactly what is coming in and going out of your business and what the cash shortfall (or surplus) is at any point of time and plan for this
- Review your finances to see where you can increase the cash coming in to your business