VAT deadline imminent
If a business has used the VAT deferral scheme in 2020 they have less than two weeks to make their intentions for repayment known. What do they need to do and what are the consequences if they miss the cut-off?
The payments due under the deferred VAT scheme were strictly due by 31 March 2021. However, the government introduced its “VAT deferral new payment scheme” as a way to allow businesses to spread the cost over up to eleven instalments instead. Any business wanting to use the new scheme must enrol by 21 June. At this stage, the maximum number of instalments that can be used is eight.
If a business has deferred VAT and misses this deadline, it must pay in full by 30 June 2021 or a penalty of 5% of the outstanding amount may be applied. Any business struggling to make payment should contact the Payment Support Service on 0300 200 3835 before 30 June to try to agree an alternative arrangement.
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