Guidance

Pay VAT deferred due to coronavirus (COVID-19)

Find out how to pay VAT payments deferred between 20 March and 30 June 2020. You can pay now or join the VAT deferral new payment scheme.

If you deferred VAT payments due between 20 March 2020 and 30 June 2020 you can:

  • pay the deferred VAT in full now
  • join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
  • contact HMRC by 30 June 2021 if you need extra help to pay

You may be charged a 5% penalty or interest if you do not pay in full or make an arrangement to pay by 30 June 2021.

Pay your deferred VAT in full

If you were unable to pay in full by 31 March 2021, you may still be able to avoid being charged penalties or interest by either:

Join the VAT deferral new payment scheme

The VAT deferral new payment scheme is open from 23 February 2021 up to and including 21 June 2021.

The new scheme lets you:

  • pay your deferred VAT in equal instalments, interest free
  • choose the number of instalments, from 2 to 11 (depending on when you join)

Instalment options available to you

When you decide to join the scheme will determine the maximum number of instalments that are available to you.

The following table sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

If you join by Number of instalments available to you
19 March 2021 11
21 April 2021 10
19 May 2021 9
21 June 2021 8

How to join

Before joining, you must:

  • have your VAT registration number
  • create your own Government Gateway account (if you do not already have one)
  • submit any outstanding VAT returns from the last 4 years – otherwise you’ll not be able to join the scheme
  • correct errors on your VAT returns as soon as possible
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

To use the online service, you must:

  • join the scheme yourself, your agent cannot do this for you
  • still have deferred VAT to pay
  • be up to date with your VAT returns
  • join by 21 June 2021
  • pay the first instalment when you join
  • pay your instalments by Direct Debit (if you want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)

Join the scheme now

If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.

To find what other support is available, use the Help and support for VAT guide.

If you cannot use the online service

There may be circumstances where you cannot use the online service, for example if you:

  • do not have a UK bank account
  • cannot pay by Direct Debit
  • have dual signatories on your account

If you want to join the new payment scheme, but cannot use the online service, contact the COVID-19 helpline. An adviser will help you join.

Correcting errors on VAT returns for the VAT deferral period

The VAT deferral period covered accounting periods for:

  • February 2020
  • March 2020
  • April 2020
  • May 2020 – for payment on account customers and certain non-standard tax periods only, in addition to the above periods

If you notice an error on a VAT return which relates to a period covered by the scheme, you should:

  1. Fill in form VAT652.

  2. Send it to the VAT Error Correction Team.

Deferring extra payments resulting from error corrections

You cannot include extra payments after you’ve joined the scheme. Any error correction relating to the deferral period that is notified to HMRC after 31 March 2021, cannot be deferred and interest will apply.

You may be contacted by HMRC if we’ve carried out a VAT compliance check and found that extra payments are due for the deferral period. These extra payments cannot be deferred if notified to you after 31 March 2021 and interest will apply.

If you’re not able to pay your deferred VAT

If you’re still unable to pay and need more time, find out what to do if you cannot pay your tax bill on time. 

To find what other support is available, use the Get help and support for your business guide.

Published 26 March 2020
Last updated 14 April 2021 + show all updates
  1. Information has been added on penalties or interest that may be charged if you do not pay in full or make an arrangement to pay and how you may still be able to avoid these charges.

  2. Information about the maximum number of instalments that are available to you has been updated.

  3. This page was updated on 4 March 2021. If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you can join the scheme from 10 March 2021.

  4. The VAT deferral new payment scheme is now open. A link has been added to join the scheme.

  5. Information added about how to join the VAT deferral new payment scheme – the online service is open between 23 February and 21 June 2021.

  6. Added new section on 'Correcting errors on your VAT returns relating to the VAT payments deferral scheme'. Including information on how to defer any extra payments resulting error corrections and HMRC VAT assessments.

  7. Added translation

  8. Added translation

  9. Opt in to the the new payment scheme by the end of March 2021

  10. Added translation

  11. New payment scheme will be available in 2021. Guide updated with information on how to opt in to the scheme.

  12. Announcement by the Chancellor on 24 September 2020 about the option to pay smaller VAT payments over a longer period of time has been added to the page.

  13. Information about the VAT payments deferral scheme ending on 30 June 2020 has been added.

  14. Information regarding the ending of the VAT deferral period added

  15. Added translation

  16. HMRC's digital assistant link has been added to the 'get help' section.

  17. Updated details about how which VAT payments can be deferred including payments on account and monthly and quarterly payments.

  18. Welsh translation added.

  19. Information about deferring VAT payments because of coronavirus (COVID-19) has been updated to clarify that import VAT payments are not included.

  20. First published.