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 get ready to opt in to the VAT deferral new payment scheme.

If you deferred VAT between 20 March and 30 June 2020 and still have payments to make, you can:

  • pay the deferred VAT in full on or before 31 March 2021
  • opt in to the VAT deferral new payment scheme when it launches in 2021
  • contact HMRC if you need more help to pay

Pay your deferred VAT

You can pay your deferred VAT in full by 31 March 2021.

You do not need to contact HMRC.

If you want to opt in to the new payment scheme

You cannot opt in yet. The online opt in process will be available in early 2021. You must opt in yourself, your agent cannot do this for you.

Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

The scheme will allow you to:

  • pay your deferred VAT in instalments without adding interest
  • select the number of instalments from 2 to 11 equal monthly payments

To use this scheme you must:

  • still have deferred VAT to pay
  • be up to date with your VAT returns
  • opt in before the end of March 2021
  • pay the first instalment when you opt in

If you opt in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.

Get ready to opt in to the new payment scheme

Before opting in you must:

  • create your own Government Gateway account if you don’t already have one
  • submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so
  • 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

You should also:

  • pay what you can as soon as possible to allow us to show the correct deferred VAT balance
  • consider the number of equal instalments you’ll need, from 2 to 11 months

Correcting errors on your VAT returns relating to the VAT payments deferral scheme

The VAT payments deferral scheme covered accounting periods for:

  • February 2020
  • March 2020
  • April 2020
  • May 2020 - for customers using Payment on Account or with Non-Standard Tax Periods (NSTP)

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 can contact our COVID-19 helpline to ask us to include extra error correction payments in your deferred VAT balance after (both of the following):

  • HMRC have processed your error correction
  • you have received a Statement of Account confirming the balance

You can then:

You may also be contacted by HMRC if we’ve carried out a VAT assessment and found that extra payments are due for the deferral period. You must also contact our COVID-19 helpline if you want to defer these payments.

Including extra payments in the VAT deferral new payment scheme

You must contact our COVID-19 helpline by 29 January 2021 if you want to include extra payments in the new scheme resulting from:

  • confirmed error corrections
  • a HMRC VAT assessment

You may not be able to include extra error correction payments if you have not received your Statement of Account by 29 January 2021.

You cannot include extra payments after you have opted in. You will need to pay this to HMRC by 31 March 2021. 

If you are not able to pay your deferred VAT

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

For advice and information on other support available use the get help and support for your business guide.

Published 26 March 2020
Last updated 20 January 2021 + show all updates
  1. 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.

  2. Added translation

  3. Added translation

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

  5. Added translation

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

  7. 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.

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

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

  10. Added translation

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

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

  13. Welsh translation added.

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

  15. First published.