VAT Deferral New Payment Scheme - online service opens

Over half a million businesses who deferred VAT payments last year can now join the new online VAT Deferral New Payment Scheme to pay it in smaller monthly instalments, HMRC has announced today (23 February).

In order 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 from March 2021.

Businesses will need to opt-in to the VAT Deferral New Payment Scheme. They can do this via the online service that opens on 23 February and closes on 21 June 2021.

Jesse Norman, Financial Secretary to the Treasury, said:

“The Government has provided a package of support worth over £280bn 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.”

The new payment scheme is part of a wider government package of support, worth more than £280bn, which is helping to protect millions of jobs and businesses. So far around £34bn has been injected into the UK economy following the half a million businesses who deferred their VAT payment last year. The new payment scheme will continue to help the economy recover by enabling businesses, impacted by the pandemic, to manage their business cash flow at a critical time.

Payments can easily be set up via the new payment scheme portal. Businesses can spread their payments with two to 11 equal monthly instalments, interest free. Payments can start from March 2021 and the earlier businesses opt-in the more instalments are available to help spread the cost and provide further support.

Eligible businesses that are unable to use our online services can ring the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.

Notes to editors

1.The scheme is open to businesses that deferred VAT due from 20 March to 30 June 2020 (under the VAT Payment Deferral Scheme) and still have payments to make.

2.They can:

• Pay the deferred VAT in full, on or before 31 March 2021,
• Opt-in to the VAT Deferral New Payment Scheme online between 23 February and 21 June 2021,
• Contact HMRC by 30 June 2021 if they need to agree extra help to pay.

3.You can pay your deferred VAT in two to 11 consecutive instalments starting in March, April, May or June 2021, without adding interest.

4.Those joining online are able to set up Direct Debit payments. The joining date is slightly longer for those unable to use our online services due to the way payments are processed.

5.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

6.If you need extra help to pay and have not contacted HMRC by 30 June 2021, you may be charged interest or a penalty. https://www.gov.uk/difficulties-paying-hmrc

7.The VAT Deferral New Payment 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. Details of the VAT Deferral New Payment Scheme and its operation are available at www.gov.uk/hmrc/vat-deferral to allow agents to appropriately advise and support their clients both prior to and during the opt-in process.

8.The HMRC Coronavirus Helpline 0800 024 1222 is open 8am to 4pm Monday to Friday, except bank holidays.

9.More information is available about the VAT Deferral New Payment Scheme: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

10.Further detail for people who are unable to opt-in online, what to do if you are a Payment on Account or an Annual Accounting customer, can also be found here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19.

11.The VAT Deferral New Payment Scheme was announced by the Chancellor in the Winter Economy Plan: https://www.gov.uk/government/publications/winter-economy-plan

12.Over half a million businesses deferred their VAT payments: https://www.gov.uk/government/collections/hmrc-coronavirus-covid-19-statistics#vat-payments-deferral-scheme

13.The government has invested more than £280bn throughout the pandemic to protect millions of jobs and businesses.

14.Summary of existing support: https://www.gov.uk/government/publications/summary-of-existing-economic-support

15.Follow the National Cyber Security Centre’s six essential steps to keep yourself and your business secure online by visiting: https://www.ncsc.gov.uk/cyberaware/home?utm_source=HMRC&utm_medium=newsletter&utm_campaign=Cyber%20Aware%20Microbiz%20campaign

16.Follow HMRC’s Press Office on Twitter @HMRCpressoffice