HMRC has published further information about the process for repaying VAT deferred by businesses during the first COVID lockdown.
There will be an opportunity to opt-in to a scheme where a taxpayer can make up to 11 monthly instalments, interest free with all instalments required to be paid by the end of March 2022.
The scheme will allow to:
- pay deferred VAT in instalments without adding interest
- select the number of instalments from 2 to 11 equal monthly payments
Conditions of the scheme are that you must:
- still have deferred VAT to pay
- be up to date with your VAT returns
- opt in before the end of March 2021
- pay the first instalment before the end of March 2021
- be able to pay the deferred VAT by Direct Debit
If you opt in-to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.
In addition, businesses must submit any outstanding VAT returns from the last four years. Access to the scheme may be blocked for those with outstanding returns. If any corrections need to be made to the returns on which VAT was deferred, HMRC warn that corrections received after 31 December 2020 may not show in the deferred VAT balance.
The opt-in process will be opened by HMRC early next year.
