MORE than half a million businesses who deferred VAT payments last year can now join the new online scheme to pay it in smaller monthly instalments.
Businesses need to opt-in to the VAT Deferral New Payment Scheme. They can do this through an online service that will remain open until June 21.
To take advantage of the 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.
Payments can easily be set up via the new payment scheme portal. Businesses can spread their payments with equal monthly instalments, interest free.
The earlier businesses opt-in the more instalments are available to help spread the cost and provide further support.
Details of what businesses must do before they opt-in can also be found at: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
If you need extra help to pay and have not contacted HMRC by June 30, you may be charged interest or a penalty.
Jesse Norman, Financial Secretary to the Treasury, says the payment scheme will help provide businesses with “the breathing space” they may need to manage their cashflows in the weeks and months ahead.
It is part of a wider government package of support, worth more than £280bn, to protect millions of jobs and businesses.
The scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder.
Because of that, HMRC is unable to provide an agent service for the scheme.
If you have any questions or queries surrounding the scheme, please contact me on 01772 430000.