HMRC has announced a new VAT referral scheme which allows for businesses to pay VAT in smaller monthly instalments.
According to the tax authority, over half a million businesses that deferred VAT payments last year can now join the new scheme online – with the service launching today, 23 February and closing on 21 June 2021.
In order to use the payment scheme businesses will need to have deferred VAT payments between March and June 2020 under the VAT Payment Deferral Scheme.
Businesses will now be given the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021.
The new payment scheme is part of a wider government package of support worth more than £280bn, which is “helping to protect millions of jobs and businesses”.
HMRC has said around £34bn has been “injected into the UK economy following the half a million businesses that deferred their VAT payment last year”.
Jesse Norman, financial secretary to the Treasury, said: “The government has provided a package of support worth over £280bn during the pandemic to help protect millions of jobs and businesses.
“This now includes the VAT Deferral New Payment Scheme, which will help provide businesses with the breathing space they may need to manage their cashflows in the weeks and months ahead.”