The Chancellor’s winter economy plan announced that businesses that took advantage of the VAT payment deferral earlier this year would be given extra time to pay under the so called ‘new payment scheme’.
Rather than paying deferred amounts in full by the end of March 2021, businesses can choose to make 11 equal, interest-free instalments over the financial year 2021-22 instead. All businesses that took advantage of the VAT deferral are eligible, though they will have to opt in.
As a further update to the VAT payment deferral measures, HMRC has now announced that they will be unable to provide an agent service for the opt-in scheme as the VAT deferral new payment scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder.
We will provide details of the new payment scheme, and specifically the opt-in process, as soon as these are available, expected in early 2021, but businesses should be aware that it is their responsibility to make the application for the scheme.
Any business that does not make an application will be required to settle any deferred VAT by 31 March 2021.
For more information on the VAT measures and how these could help your business, please contact Julian Millinchamp at julian.millinchamp@hazlewoods.co.uk or 01242 237661.