Almost all businesses have been affected by lockdowns over the last year and are now looking for ways to boost their recovery as the easing of restrictions continues.
As the economy awaits the next boost from further relaxation on the roadmap out of lockdown, there are still things you can do to support your business with its recovery.
The most urgent of these has a looming deadline – June 21st is your last chance to join the new online payment scheme to spread the cost of their deferred VAT.
If you don’t opt into the scheme, your VAT bill is due in full on 30th June 2021.
What is it?
Over half a million businesses deferred £34 billion in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme and businesses had until 31 March 2021 to pay this deferred VAT.
However, if they could not afford to do so, they could go online from 23 February to set up a new payment scheme and pay by monthly instalments to spread the cost.
This was called the VAT Deferral New Payment Scheme.
The new payment scheme is part of the government package of support worth over £350 billion to help protect millions of jobs and businesses during the pandemic and as we emerge on the path to recovery.
Is it worth doing?
Absolutely.
The VAT Deferral New Payment Scheme means businesses can now manage their cashflow by paying their deferred VAT more gradually, continuing to protect jobs across the UK as we emerge from the pandemic.
The March, April and May joining dates have passed, but businesses can still spread their payments across up to eight equal monthly instalments, interest-free, if they join by 21 June 2021.
Payments can easily be set up via the VAT Deferral New Payment Scheme portal.
Eligible businesses that are unable to use the online service can call the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.
Businesses may be charged a 5% penalty and/or interest if they don’t join up to the scheme online by 21 June, or pay in full by 30 June, or contact HMRC to make an arrangement to pay by 30 June 2021.
Businesses should also contact HMRC by 30 June 2021 if they need to agree extra help to pay.
What do I need?
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 four 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
Helping you make the most of your money
We can’t help you join this scheme – you have to do this yourself. But we can keep you informed of what help is out there for you as your continue to get your businesses up and running again.
If you need any help, advice or support, do not hesitate to get in touch. We will do our best to answer questions and solve problems.