If you do not pay your liability in full or set up a payment plan, you may be charged a 5% penalty or interest by HMRC. To avoid this, you can either join the new payment scheme or pay off your deferred VAT in full by 30 June 2021. If you wish to arrange paying your deferred VAT over nine instalments, you must set up the plan with HMRC by 19 May 2021.
The scheme allows you to:
- pay your deferred VAT in equal instalments, interest free
- choose the number of instalments, (depending on when you join)
- joining the scheme
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)
You can join the scheme through the guidance page
here.