17th June 2021Latest on the VAT Payments Holiday – all you need know

To support businesses during the COVID-19 pandemic, the UK Government announced temporary changes to the VAT system.

Many organisations took advantage of the VAT payment deferral scheme, allowing them to defer payments that fell between 20 March 2020 and 30 June 2020 until 31 March 2021, with no interest or penalties. This includes the VAT Return payments due for the periods ended 29 February, 31 March and 30 April 2020 and any VAT Payments on Account due in that period.

If you deferred VAT payments due between 20 March 2020 and 30 June 2020, you can:

• pay the deferred VAT in full now
• join the VAT deferral new payment scheme – the online service is open until 21 June 2021. Otherwise, any deferred payment must be paid in full by 30 June 2021
• If paid by 30 June 2021, no interest/surcharges applied by HMRC;
• If unable to pay by 30 June 2021, contact HMRC to ask for a “time to pay” arrangement with HMRC

The final date to request payment of the deferred VAT by instalments is 21 June 2021. Under the scheme, you can:

• pay your deferred VAT in equal instalments, interest free
• The number of instalments will vary, depending on when you join(ed) from 2 to 11
  • 19 March 2021 – 11
  • 21 April 2021– 10
  • 19 May 2021 – 9
  • 21 June 2021 – 8

How to join

Before joining, you must:

• have your VAT registration number
• create your own Government Gateway account (if you do not already have one)
• submit any outstanding VAT returns from the last 4 years – otherwise you’ll not be able to join the scheme
• correct errors on your VAT returns as soon as possible
• make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

If you have any questions about the above, or any other VAT query, please do not hesitate to contact us.