Over half a million businesses who deferred VAT payments last year can now pay the VAT they owe in smaller monthly instalments, thanks to a new government scheme.
The online VAT Deferral New Payment Scheme is aimed at UK businesses that deferred VAT payments between March and June 2020 under the VAT Payment Deferral Scheme and that still have payments to make. HMRC is now giving these firms the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021.
Businesses also have the option to pay the deferred VAT in full, on or before 31 March 2021. Those that want to spread their payments will need to opt in to the VAT Deferral New Payment Scheme. They can do this via the online service from 23 February; this service will close on 21 June 2021.
Any business that is struggling to pay, but has not contacted HMRC by 30 June 2021, could be charged interest or a penalty. Jesse Norman, financial secretary to the Treasury, said that the scheme would give businesses "the breathing space they may need to manage their cashflows in the weeks and months ahead".
Payments can be set up via the new payment scheme portal. Businesses can spread their payments with two to 11 equal monthly instalments starting in March, April, May or June 2021, without adding interest. The earlier businesses opt in the more instalments are available to help spread the cost.
Eligible businesses that are unable to use HMRC's online services can ring the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.
HMRC has also announced more help for self assessment taxpayers. Taxpayers will now not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April. Normally, a 5% late payment penalty is charged on any unpaid tax that is still outstanding on 3 March.
Taxpayers can either pay their tax bill or set up a monthly payment plan online. They need to do this by midnight on 1 April to avoid being charged a late payment penalty. The online Time to Pay facility allows taxpayers to spread the cost of their self assessment tax bill into monthly instalments until January 2022.
article from Start Up Donut