Around a year ago many businesses decided to defer their VAT payments for payments due between the 20th March and 30th June 2020 to help with their cash flow. You may be one of those businesses that took up this option and are still struggling to clear the debt. If this is you then there is still time to take action and sign up to the VAT deferral new payment scheme.
The scheme closes on 21 June 2021 and allows you to spread your deferred VAT up to 8 months interest free, although you can opt for fewer months if you prefer. To avoid incurring any penalties and interest you need to either opt into the scheme before 21 June 2021 or pay the full deferred amount of VAT by 30 June 2021.
To opt into the scheme you will need to use your government gateway account, ensure all your VAT returns are up to date within the last 4 years and know how much of the deferred VAT you still owe as you may have already made some payments towards it.
By opting into the VAT deferral new payment scheme you are entering into a direct debit agreement and the first instalment will be required to be paid when you sign up. If you fail to pay the direct debit at any stage in the agreed term then the agreement will be cancelled and you will incur penalties and interest as well as being required to repay HMRC the VAT owed in full.
Many VAT businesses are already signed up to this scheme so please ensure you do not miss the deadline!
If you have any questions then please do not hesitate to contact your local Perrys office.