Impact assessment

VAT deferral new payment scheme

Published 13 October 2022

Project objectives

There were 3 major policy announcements on deferring VAT payments to support businesses with their cashflow:

1. VAT payments deferral scheme
2. VAT deferral new payment scheme
3. Four-month payment holiday on new payment scheme

VAT payments deferral scheme

This was announced on 20 March 2020 to coincide with the first lockdown, and allowed any VAT-registered business to automatically defer any VAT payments due between 20 March and 30 June 2020. The deferred VAT became due by 31 March 2021.

The deferral measure included:

• VAT returns – most customers submit quarterly, some monthly or annually, and the measure covered all returns ending February, March and April 2020
• central assessments raised automatically when customers do not file a return
• interim instalments due from payment on account customers (from businesses with a net annual liability of over £2 million)
• officer assessments
• error correction notices

VAT deferral new payment scheme

Announced on 24 September 2020 as the pandemic entered its second wave, the new payment scheme was available to all customers who deferred VAT payments between 20 March and 30 June 2020 (and submitted a corresponding return). Customers who chose to take up the new payment scheme offer were able to make smaller payments (up to 11 equal instalments) between March 2021 and March 2022.

The new payment scheme was not open to customers who had outstanding returns.

Four-month payment holiday on new payment scheme

This was announced on 15 January 2021 as the UK entered its third lockdown, and aimed to provide certainty to customers who had deferred their VAT liability. Business could join the new payment scheme by 31 March as normal or delay joining until 30 June 2021 – the later businesses joined, the fewer monthly instalments were available.

All instalments had to be paid by January 2022.

This screening template is in relation to the operational delivery of the scheme.

Customer groups affected

These are the customer groups affected by the scheme:

• individuals and small businesses
• mid-sized businesses
• large businesses
• public bodies

What customers needed to do

What customers needed to do as a result of the change

Customers who deferred the payment of their VAT liability due between 20 March and 30 June 2020 could opt into a payment plan to spread the payment into up to 11 equal instalments spread between March 2021 and March 2022.

How customers accessed this service

Customers had to opt in the new payment scheme themselves through an online service. Agents or third parties could not do this on their behalf, but there was a manual process to support digitally excluded customers who could not access the online service.

When customers needed to do this

The service was live between February and June 2021.

Businesses initially had to join by 31 March 2021, making their first payment by that date. This was later extended to 30 June 2021. The last payment instalment was due in January 2022, which meant the later businesses joined, the fewer monthly instalments were available.

Those intending to pay in full had to do so by 31 March 2021.

Assessing the impact

Before the scheme started, we assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act:

• racial groups
• sex
• gender reassignment
• sexual orientation
• pregnancy and maternity
• marriage and civil partnership
• people with dependents and those without
• political opinion (for Northern Ireland only)

There is no evidence to suggest any specific impacts on those customers within any of the protected characteristic groups (listed above).

The following equality impacts were identified:

Disabled and not disabled

Impact on customers

There may be impacts for individuals from this protected characteristic groups if they are unable to digitally access the scheme or require alternative formats.

Mitigation provided

HMRC provides additional assistance for customers who are deaf or hearing impaired, blind or partially sighted.

Digital content can also be provided in a variety of formats, including hard copy, on request. Formats available include braille, audio and large print. There is also a zoom facility to increase and reduce font sizes within online content.

Government Digital Service (GDS) assess and sign-off aspects of HMRC’s digital design to ensure that it meets accessibility requirements such as for the use of screen reader users.

All GOV.UK online content adheres to national and internationals standards, such as World Wide Web Consortium (W3C).

HMRC offers Extra Support Team services which can be accessed by those customers who cannot, for whatever reason, interact with HMRC digitally or who need additional support and reassurance.

Age

Impact on customers

The population consists of multiple age groups. There is no evidence to suggest any specific impacts on customers within this protected characteristic group; although consideration must be given regarding impact on older generation customers, who may be more hesitant to engage digitally (although it is recognised this may not be the case for all those in the older generation population).

Mitigation provided

HMRC offers Extra Support Team services that can be accessed by customers who cannot, for whatever reason, interact with HMRC digitally or who need additional support and reassurance.

Channel Shift strategies are considering the impact of age on digital capability so that access to alternative services is maintained for those customers who choose not to interact digitally.

Religion or belief

Impact on customers

Some religious groups, such as the Plymouth Brethren, follow rules related to computer use that may affect access to digital services.

Mitigation provided

HMRC offers Extra Support Team services that can be accessed by customers who cannot, for whatever reason, interact with HMRC digitally.

Digital provision offered choice to individuals in this group to self-serve outside of traditional business hours to suit their religious needs.

People who use different languages (including Welsh language and British Sign Language)

Impact on customers

There may be potentially a slight impact on Welsh speaking customers within this protected characteristic group.

Mitigation offered

The project engaged with Welsh Language Service (WLS) to ensure that there were communication channels available for customers who are Welsh language users. Other mitigations included the translation of guidance into Welsh.

Opportunities to promote equalities

We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group.

We have not identified any opportunities within the scope of this project.

A full equality impact assessment is not recommended.