A&M Tax Advisor Update
To support businesses through Covid-19 the UK Government announced that VAT payments could be deferred for three months. The deferral applied to VAT payments due between 20 March 2020 to 30 June 2020. Businesses were not required to notify or apply to HMRC if they wished to defer their VAT payments and were given until 31 March 2021 to settle the VAT liability.
This has been extended and further support was provided as part of the Winter Economy Plan allowing businesses to exercise an option to pay the deferred VAT deferred in 11 equal installments by 31 March 2022, interest-free. This is known as the New Payment Scheme.
How does this work?
In order for businesses to utilise this option, they must ‘Opt-In’. The process requirements will be released in the early part of 2021, with further guidance due in the coming months.
Payment on Account and Annual Accounting Schemes:
Businesses using the Payments on Account or Annual Accounting Schemes also qualify for this deferral where these payments were due between 20 March 2020 and 30 June 2020 provided they opt-in…