HMRC Launches New VAT Deferral Payment Scheme

Over half a million businesses that deferred VAT payments last year can join the new scheme to pay VAT in smaller monthly instalments announced HMRC today.

In order to take advantage of the VAT Deferral New Payment Scheme businesses will need to have deferred VAT payments between March and June 2020 under the VAT Payment Deferral Scheme. They will now be given the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021.

Businesses will need to opt-in to the VAT Deferral New Payment Scheme. They can do this via the online service that opens on 23 February 2021 and closes on 21 June 2021.

The new payment scheme is part of a wider government package of support, worth more than £280 billion, which is helping to protect millions of jobs and businesses. So far, around £34 billion has been injected into the UK economy following the half a million businesses that deferred their VAT payment last year.

The new payment scheme will continue to help the economy recover by enabling businesses, impacted by the pandemic, to manage their business cash flow at a critical time.

Businesses can spread their payments with 2 to 11 equal monthly instalments, interest free. Payments can start from March 2021, and the earlier businesses opt-in, the more instalments are available to help spread the cost and provide further support.