Update 3 February 2021

VAT Deferral New Payment Scheme

1. Which Payment or Vat return did this refer to?

The Vat deferral scheme relates to the Vat payment due between 20 March and 30 June 2020.

This means the Vat return with a quarter end of either

Feb 2020

March 2020

April 2020

2. When do I need to pay it by?

You have two choices.

  •  You can pay it in full by 31 March OR
  • You can pay it in between 2 and 11 monthly instalments by 31 March 2022.

3. Will I pay interest if I pay in instalments?


4. Are there any conditions to allow payment by instalments?

Yes, to use this scheme you must:

  • still have the 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

5. How do I opt in?

  • 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.

6. Is there anything else I need to do?

  • You must create your own government gateway account if you don’t already have one. This can be done here
  • Submit any outstanding Vat returns for the last 4 years.
  • Correct any errors you have made previously.
  • Check how much you owe and have the amount ready.
  • Consider how many instalments you want to spread the amount over which can be between 2 and 11.

7. I am concerned that I might not be able to meet the new instalment plan?

If you still need time to pay beyond this then contact HMRC for a time to pay arrangement

8. I already have Time to Pay in place for other schemes will this be affected?

No, you can still have a time to pay arrangement for other HMRC  debts and outstanding tax.

Further details on this scheme can be found here.

This article is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or taking professional advice. The authors and the firm cannot accept any responsibility for loss arising from any person acting or refraining from acting on the basis of the material included herein.

Andy Fleet

Author Andy Fleet

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