VAT Deferral New Payment Scheme opens for applications

Businesses who chose to defer VAT payments between March and June last year can now apply to pay their liabilities in smaller monthly instalments, it has been announced.

The report comes after the VAT Deferral New Payment Scheme opened to new applications at the end of last month.

Under the initiative, businesses who deferred VAT payments during the height of the coronavirus pandemic will be given the option to spread out their liabilities over two to 11 monthly instalments – depending on when you joined.

For example, those joining by 21 April 2021 can make up to 10 equal monthly payments, while those joining by 21 June 2021 can make just eight monthly payments – effectively increasing the value of each monthly repayment.

You must apply to the VAT Deferral New Payment Scheme before 21 June 2021 or you may be charged interest or penalties on the outstanding sum.

If you do not want to pay in monthly instalments, you must pay your liabilities in full, on or before 31 March 2021.

Commenting on the launch of the programme, Jesse Norman, Financial Secretary to the Treasury, said: “The government has provided a package of support worth over £280 billion during the pandemic to help protect millions of jobs and businesses.

“This now includes the VAT Deferral New Payment Scheme, which will help provide businesses with the breathing space they may need to manage their cashflows in the weeks and months ahead.”

Click here to learn more about the VAT Deferral New Payment Scheme.

For help and advice with related matters, please get in touch with our expert VAT team today.