Join VAT scheme or pay your deferred VAT now

Published: 08/03/2021 By Jane Price

Pay VAT deferred due to COVID-19 now or get ready to join the VAT deferral new payment scheme

If you deferred any VAT payments that were due between 20th March and 30th June 2020 and they are still outstanding you have three options:

Option 1 - Pay the deferred VAT in full on or before 31st March 2021
You can pay your deferred VAT by clicking here
Before you pay your VAT bill, you should make sure your deadline has not passed and remember you must allow time for the payment to clear HMRC’s account.  These deadlines are shown on your VAT return in your VAT online account.  

Option 2 - Join the VAT deferral new payment scheme
This is an on online service available between 23rd February and 21st June 2021.
If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you’ll be invited to join the new payment scheme later in March 2021.

The new scheme will enable you to pay in equal instalments, interest free over a period of 2 to 11 instalments.  When you join the scheme will determine the maximum number of instalments that are open to you.

If you want to join the scheme there are certain conditions that needs to be met:
  • You must apply to join the scheme yourself, your agent can't do this for you
  • You must be up to date with your VAT returns
  • Join by 21st June 2021
  • Pay the first instalment when you join
  • You must have a Government Gateway account
  • Ensure you know how much you owe, including the amount you originally deferred and how much you may have already paid
If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.

There may be circumstance where you cannot use the online service.  Maybe you don’t have a UK bank account, you cannot pay by Direct Debit or you have dual signatories on your account.  In this case you should contact the COVID-19 helpline when schemes open on 0800 024 1222 and an advisor will help you join.

Option 3 - If you need extra help to pay
You must contact HMRC by telephone on 0800 024 1222 by the 30th June.  

If you pay your tax bill late interest will be applied on the amount you owe until it is paid off in full.  You can avoid penalties by arranging a payment plan.  See here for more details.

Read our time to pay blog here