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VAT Deferral of payments

September 7, 2020

Deferral of VAT payments due to coronavirus (COVID-19)

Temporary changes were made to the rules governing VAT payments due between 20 March 2020 and 30 June 2020 to help businesses manage their cash flow during the coronavirus (COVID-19) pandemic.

Under the temporary easement, a UK VAT registered business with a VAT payment due between 20 March 2020 and 30 June 2020 had two options:

a) defer the payment until a later date; or

b) pay the VAT due as normal.

Paying the tax that you have deferred

If you chose to defer your VAT payment as a result of coronavirus, you must pay the VAT on or before 31 March 2021. The VAT Deferral New Payment Scheme can be used to spread these payments over equal instalments up to 31‌‌‌‌‌‌‌‌‌ March‌‌‌ 2022. Alternatively, you or your can make payments as normal by 3‌‌‌1‌‌‌ March 2021, or make Time To Pay arrangements with HMRC if you need more tailored support.

Businesses must continue to submit their VAT returns to HMRC on time.

The due VAT payment date is normally the last day of the month following the end of the VAT return period. However, a seven-calendar-day extension for the submission of the return and the payment is available if the payment is made electronically.

Businesses using the payment-on-account scheme for large traders and those using the annual accounting scheme are not entitled to the additional seven day extension.

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