Businesses that deferred VAT payments last year have until 21 June 2021 to join the new online payment scheme to spread the cost of their deferred VAT, HMRC has said.
According to the tax authority, over half a million businesses deferred £34bn in VAT payments due between March and June 2020 under the VAT payment deferral scheme.
Businesses had until 31 March 2021 to pay this deferred VAT or, 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.
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.
HMRC data to 30 April 2021 shows 228,850 businesses that deferred their VAT last year have already paid their VAT in full.
This, along with instalments already made under the new payment scheme and other payment plans, totals £15.1bn . Since the online service opened on 23 February 2021 another £11.5bn has already been committed to future installments by 134,627 businesses.
HMRC has said that 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.
Jim Harra, chief executive for HMRC, said: “Businesses that deferred paying their VAT last spring have until 21 June to join the VAT deferral new payment scheme online. They should act now to avoid missing out on this opportunity to spread payment of their deferred VAT across monthly, interest-free, instalments.
“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. HMRC will continue to do all we can to help businesses as they reopen and rebuild.”