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 on 0800 024 1222 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:
- joining the new payment scheme by 21 June 2021
- paying your deferred VAT in full by 30 June 2021
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)
If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.
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 0800 024 1222. 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:
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.