HMRC updates guidance on how to pay VAT deferred due to COVID-19

HMRC's guidance on how to pay VAT payments deferred between 20 March and 30 June 2020 has been updated. Businesses can either pay the deferred VAT by 31 March 2021, or get ready to opt into the new VAT deferral payment scheme which will allow businesses to make 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

Businesses are not able to opt in to the new scheme yet, as the online process will not be available until early 2021. However, the guidance lists a number of specific actions which business must take before opting in, including submitting any outstanding VAT returns from the last four years and correcting any errors on VAT returns as soon as possible.

The guidance also states that businesses must opt in to the scheme themselves; agents cannot do this for them.

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