With budget day looming at the point of writing, but likely having passed by the time of reading, picking a topic where change is not expected in the short term has been quite a challenge! However, the end of March this year brings about a somewhat unusual deadline worthy of note for a good number of businesses, particularly those still being impacted by the effects of the pandemic and this latest lockdown.

Almost a year ago, the UK was heading into the first lockdown, and with that came one of the governments first business support proposals, being the deferral of VAT bills due between 20 March and 30 June 2020, until 31 March 2021.

Since then, the scheme has been extended to allow business to further defer their VAT bill into up to eleven equal, interest free instalments. To pay by eleven equal instalments, you must apply for the scheme no later than 19 March 2021. Applications between 20 March and 21 April will have to pay over ten equal instalments, 22 April and 19 May nine, and 20 May and 21 eight. In all cases, the first repayment must be made at the point of joining the scheme.

The scheme is available even if you already have time to pay arrangements in place with HMRC for other outstanding tax balances.

HMRC have stated that you may be charged interest and/or a penalty if you have not:

  • paid the deferred VAT in full by 31 March 2021
  • opted into the new payment scheme by 21 June 2021
  • agreed extra help to pay with HMRC on 0800 024 1222 by 30 June 2021

The scheme is already open and is set to close on 21 June 2021, with those having not paid the deferred VAT in full, or applied to pay by instalments by that date, likely to receive penalties. Applications can be made online at gov.uk or by telephone on 0800 024 1222.

This article originally appeared in the April/May edition of Wiltshire Business.