If your company took advantage of deferred UK VAT during the period 20 March 2020 to 30 June 2020, your payments will be due by 31 March 2021. The deferment was introduced to offer relief during the Covid-19 pandemic.
HMRC has issued new guidance clarifying that businesses have two means of complying with their obligation. First, your business can pay the deferred VAT in full by the 31 March due date. This is the simplest option and does not require you to contact HMRC.
Alternatively, you can apply to join the new VAT deferment scheme. This scheme allows for payments in up to 11 smaller installments (interest free) until the end of March 2022.
In order to take advantage of the 11 installment option, you will be required to join the scheme by 19 March 2021.
HMRC warns that businesses that do not comply with either option risk being charged a penalty or interest.
Please feel free to contact Vatglobal for advice or assistance.
How to take advantage of the new UK VAT deferment
In order to take advantage of the new scheme, you will need to opt in via HMRC’s online service. (You will need to create a Government Gateway account if you do not already have one.) The business must make the application directly. It cannot be performed via an agent.
You will also need to comply with a number of requirements. VAT returns must be up-to-date and any errors on returns must be corrected.
Note also that the additional deferment only applies to deferred VAT that is owing. It is not possible to defer ongoing VAT obligations. .
Optimise your VAT compliance
Effective VAT compliance is about more than merely meeting your obligations.
Leveraging VAT deferments and other benefits can help optimise cash flow and ensure uninterrupted business continuity.
Vatglobal’s team of global VAT experts will ensure your business always makes informed, effective business choices.
Get in touch to see how Vatglobal can help you optimise your VAT compliance, wherever you have an obligation.