With the end of the financial year drawing closer, now is a good time to be reminded that any VAT deferred between 20 March and 30 June 2020 because of COVID-19 will be due by 31 March 2021. Whilst HMRC will of course be happy to take your payment in full before the due date, our clients are asking whether there’s an option to defer further given that we are back in lockdown again.
If you are eligible, the good news for your cashflow is that you can opt in to a new VAT payment scheme which will enable you to spread deferred VAT across interest free monthly instalments instead of paying it all in one go.
New deferred VAT payment scheme
Whilst the new scheme isn’t open just yet, HMRC claim that the online opt in process will be available “in early 2021” so it’s worth taking some time now to find out whether you will be able to take advantage of it or not. Naturally there are terms and conditions so a good next step is to visit the HMRC website, their information should help you ascertain whether you are eligible for the scheme and understand what you need to do to get ready to opt in. Importantly, you need to opt in through your Government Gateway account and pay your first instalment before the end of March 2021 and all instalments must be paid by the end of March 2022.
In it together
At Sagars, we continue to support our clients. We miss getting together in person but meeting virtually is proving to be a welcome substitute. With a national lockdown now in force, our office door unfortunately remains closed. We will only be able to accept client visitors in urgent or exceptional circumstances (and subject to strict COVID-secure protocols), but there will be team members in the office for drop-offs or collections. Stay safe and get in touch with your usual Sagars team member if there’s anything that you need help with.