If you deferred your VAT payments between 20 March and 30 June 2020 and still have payments to make, you may be concerned what you need to do now, especially if your business circumstances are still challenging, and you’re worried you may not be able to pay. The good news is you have three options if you deferred your VAT payments. You can: Pay the deferred VAT in full on or before 31 March 2021 Opt-in to the VAT deferral new payment scheme when it launches shortly Contact HMRC if you need further help to pay VAT deferral payment scheme Instead of paying the full amount on 31 March 2021, you can choose to make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022. To be eligible for this scheme, you must: Still have deferred VAT to pay Be up to date with your VAT returns Opt-in before the end of March 2021 Pay the first instalment before the end of March 2021 Be able to pay the deferred VAT by Direct Debit If you opt-in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax. Get ready to opt in The new VAT deferral payment scheme is not open yet, but it will open shortly, and we will update you when we are notified of this. To prepare ahead of time, in order to opt in you must: Create your own Government Gateway account if you don’t already have one Submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so Correct errors on your VAT returns as soon as possible. Corrections received after 31 December 2020 may not show in your deferred VAT balance Make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid Pay what you can as soon as possible to allow us to show the correct deferred VAT balance Consider the number of equal instalments you’ll need, from 2 to 11 months Implications if you cannot make payments If you pay late or cannot make payments, you will be charged interest and may receive a penalty. To potentially avoid penalties, you need to contact HMRC as soon as possible. Head over to the Gov website to read your options if you cannot make payments. Other cash flow solutions Besides deferring your VAT, there are other measures to help if you are having cash flow difficulties: Apply for Coronavirus Business Interruption Loan Scheme (CBLS) or Bounce Back Loan Scheme (BBLS) – These are government backed loans that can help businesses access finance. The scheme ends on 31 March 2021. Read our full article to find out if you’re eligible, and how you can access this lending. You can check if you’re eligible for CBILS quickly now via Funding Circle Get a Company Voluntary Arrangement (CVA) – If your company is insolvent, liquidation is not your only option. A CVA can help give you some breathing space in order to sort out your finances and catch up with payments. Read our full article about CVA’s and your options here. Pay your Self-Assessment Tax bill in instalments You can still make claims via the Coronavirus Job Retention Scheme until April 2021 Contact your local council to see if you qualify for a grant We cannot set up the VAT deferral plan for you, but we can support you in making a decision of whether to opt-in and discuss your options if you have further cash flow concerns. Contact your Principal Adviser or get in touch with one of our advisers by emailing enquiries@a4g-llp.co.uk or calling 01474 853 856. Contact me today! Emma White FCA Partner 01474 853856 emma.white@a4g-llp.co.uk Send me a message Ask me a question Fill in your details below and I’ll come back to as soon as I can! If your enquiry is more urgent, please do give me a call. Your full name*Contact no.*Email address* Business name*Industry / Profession*Your messageOne last thing...*By ticking this box you agree to being contacted via email or phone by one of our Advisers, and for the information you provide us with to be kept securely for future communications in line with the new GDPR Yes, I agree Share this article Other posts of interest 25th April 2017 Worker Status and the ‘Gig Economy’ Read more 15th October 2020 How to save money when acquiring commercial vehicles Read more 26th November 2020 Compelling goals Read more See more articles