New Payment Scheme – Opt-in
Rather than paying in full at the end of March 2021, businesses will be able to choose to make 11 equal instalments over 2021/22. All businesses that took advantage of the VAT deferral can use the New Payment Scheme. Businesses will need to opt in, but all are eligible. HMRC will put in place an opt-in process in early 2021 and further details will be provided when it is published.
VAT deferral (20 March 2020 ― 30 June 2020)
Many businesses experienced a rapid and unexpected decrease in their revenue streams as a result of the coronavirus (COVID-19) outbreak, and consequently suffered cash flow problems that impacted their ability to pay any VAT due. In light of this, the Chancellor announced a delay in the requirement to make VAT payments that fell due between 20 March 2020 and 30 June 2020. Businesses that do not elect to take advantage of the ‘new payment scheme’ mentioned above have been given until 31 March 2021 to pay any liabilities accumulated in this period; they can opt to pay the VAT due at the usual time if they prefer.