Guidance

Deferral of VAT payments due to coronavirus (COVID-19)

The VAT payments deferral scheme ended on 30 June 2020 as previously set out.

On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.

Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.

You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.

Those that can pay their deferred VAT can to do so by 31 March 2021.

If you are still unable to pay the VAT due and need more time, see the guidance about what to do if you cannot pay your tax bill on time you can also contact us by phoning: 0300 200 3835.

More information on the scheme will be available on GOV.UK in the coming months.

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

If you’re a UK VAT-registered business that deferred VAT payments between 20 March 2020 and 30 June 2020, you now need to:

  • set-up cancelled Direct Debits in enough time for HMRC to take payment
  • continue to submit VAT returns as normal, and on time
  • pay the VAT in full on payments due after 30 June

Any VAT payments you have deferred between 20 March and 30 June should be paid in full on or before 31 March 2021. For more information see Pay your VAT bill.

What you need to do

If you have cancelled your Direct Debit to HMRC to take advantage of the deferral, you will need to set up a new Direct Debit arrangement in time for the first payment after 30 June.

Payments due after 30 June must be paid in full as normal and you must continue to file your VAT return on time.

Paying the tax that you have deferred

If you chose to defer your VAT payment as a result of coronavirus, you must pay the VAT on or before 31 March 2021.

You can pay or make payments towards your deferred VAT now or at any time up to 31 March 2021.

How to get help

If you need more help to pay your VAT, you may be eligible to get support with your tax affairs through HMRC’s Time To Pay service. This allows you to pay off your debt by instalments over a period of time.

Get more information if you cannot pay your tax bill on time.

Published 26 March 2020
Last updated 25 September 2020 + show all updates
  1. 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.

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

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

  4. Added translation

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

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

  7. Welsh translation added.

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

  9. First published.