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COVID – Paying deferred VAT

Taxpayers were permitted to defer any VAT return payments due to HMRC between 20 March and 30 June 2020 due to the COVID-19 pandemic.

HMRC requires the balance to be repaid in full by 31 March 2021, or the taxpayer needs to sign up to its VAT deferral new payment scheme by the same date.

HMRC has announced that if the taxpayer does not pay in full by 31 March 2021, it now only has to have joined the VAT deferral new payment scheme by 21 June 2021 – an extension period of nearly three months with no interest or penalty if signed up by the new deadline. The sign-up portal opens on 23 February.

Please note if the taxpayer signs up for the deferral payment scheme later in the sign up window, it reduces the number of instalments available for repayment:

If you join by:Number of instalments available to you:
19 March 202111
21 April 202110
19 May 20219
21 June 20218

You will find more information about the deferral of VAT payments due to Covid-19 on the Gov.uk website.

VAT is already complicated area already and this adds to its complexity, which is why we are on hand to help. Contact Rob Case on 01242 776000 or rob.case@randall-payne.co.uk.