HMRC has advised that businesses with deferred VAT payments must begin paying the amounts they owe if they want to avoid a 5% penalty or interest now.
Afford Bond Associate Director, Ben Edwards said: “The VAT payments due are the ones that the Government deferred from 20 March 2020 to 30 June 2020 to help businesses survive the economic freeze of the time. Many businesses haven’t factored re-payment in, on time.”
Businesses must either pay the full amount they owe now, or arrange to pay their full deferment by 30 June 2021 to avoid extra costs. Alternatively, businesses can join the VAT deferral new payment scheme, which is open online between 23 February 2021 and 21 June 2021.
The new deferral programme allows companies to pay their deferred VAT in equal instalments interest free. Applicants can choose how many instalments they pay from two to a maximum amount which depends on when they join. There are a total of 11 instalments if the applicant business joined the scheme by 19 March 2021.
Important Note: If a busness joins by 21 April 2021, a maximum of 10 instalments are available; 9 if they join by 19 May 2021, and 8 if they join by 21 June 2021.
Contact Ben Edwards – Ben.Edwards@affordbond.com or Chris Regnauld (Tax Director) – Chris.Regnauld@affordbond.com if your business needs expert VAT and tax advice. Or called Afford Bond Nantwich accountants on 01270 623731.