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Deferred VAT payment due 31 March 2021

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This is a reminder that if you have deferred paying your VAT for periods ending in February, March or April 2020 as part of the government’s COVID-19 response, then the payment is due by 31 March 2021 unless you apply for a “time to pay” arrangement.

HMRC have simplified the process of applying for these so that those who need it can access it more easily, but it is something that businesses must do for themselves; we cannot apply on your behalf as agents. The service opens on 23 February 2021 and businesses have until 21 June 2021 to sign up. You can apply to pay in up to 11 monthly interest free instalments prior to 31 March 2022.

In order to apply you must:

  • still have deferred VAT to pay
  • be up to date with VAT returns
  • be able pay the deferred VAT by Direct Debit
  • have a government gateway account through which to apply

Budget 2021 update:

The Chancellor has announced that where a business has an outstanding deferred VAT debt (as a result of COVID-19 in 2020) at 30 June 2021 and has not opted into the New Payment Scheme or made alternative arrangement to pay with HMRC, then a new 5% penalty will apply to the outstanding amount. The normal Default Surcharge approach will not apply to deferred VAT.

If you are affected and would like further support from us then please let us know.

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