Here are three ways you can avoid paying a penalty or interest.
One of the COVID19 relief schemes in 2020 was the 'VAT Payments Deferral Scheme'. This automatically deferred any VAT liabilities from VAT quarters falling due between 20 March 2020 and 30 June 2020. Any amounts due between these dates were given a deferral until 31 March 2021.
If you haven’t yet paid these outstanding liabilities, don't worry – all is not lost!
With these three options, you may still be able to avoid the 5% penalty or interest.
You could:
Pay the full amount due by the 30 June 2021.
Join the 'VAT deferral new payment scheme' by 21 June 2021.
Contact HMRC by 30 June 2021 and apply for 'extra help to pay'.
VAT deferral new payment scheme
In the Winter Economy Plan, Rishi Sunak announced an update to this scheme, the 'VAT deferral new payment scheme' allowing businesses that deferred until the 31 March 2021 an opportunity to spread the cost, interest-free, equally in up to 11 monthly instalments. However, unlike the original deferral scheme this is not automatically applied and businesses need to make an application.
Applications for the 'VAT deferral new payment scheme' need to be submitted by the 21 June 2021.
The number of instalments permitted is based on when you join the scheme. If an application is made from now up until the deadline you will be granted a maximum of 8 instalments.
For information on how and where to join the scheme please visit the Government's guidance page.
Extra help to pay
HMRC has a special service to help with businesses struggling as a result of the pandemic. The Coronavirus (COVID-19) helpline for businesses and the self-employed provides access to advisors who can discuss the situation and suggest arrangements to pay liabilities. You can also discuss setting up a Time to Pay Arrangement with HMRC - see under the 'If you cannot pay other taxes' section.
FOR ACCOUNTING AND TAXATION HELP AND ADVICE
CONTACT WALSH WEST LAW 7 DAYS A WEEK:
+44 0203 488 7503 / 01992 236 110
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