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Paying back VAT deferred due to COVID-19 UPDATED

This guide details paying back VAT payments deferred between 20 March and 30 June 2020. You can pay now or join the VAT deferral new payment scheme.

paying back vat

Information has been added on penalties or interest that may be charged if you do not pay in full, or make an arrangement to pay, and how you may still be able to avoid these charges.

If you deferred VAT payments due between 20 March 2020 and 30 June 2020 you can:

  • pay the deferred VAT in full now
  • join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
  • contact HMRC on 0800 024 1222 by 30 June 2021 if you need extra help to pay

You may be charged a 5% penalty or interest if you do not pay in full or make an arrangement to pay by 30 June 2021.

Pay your deferred VAT in full

If you were unable to pay in full by 31 March 2021, you may still be able to avoid being charged penalties or interest by either:

  • joining the new payment scheme by 21 June 2021
  • paying your deferred VAT in full by 30 June 2021

Join the VAT deferral new payment scheme

The VAT deferral new payment scheme is open from 23 February 2021 up to and including 21 June 2021.

The new scheme lets you:

  • pay your deferred VAT in equal instalments, interest free
  • choose the number of instalments, from 2 to 11 (depending on when you join)

Instalment options available to you

When you decide to join the scheme will determine the maximum number of instalments that are available to you.

The following table sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

If you join byNumber of instalments available to you
19 March 202111
21 April 202110
19 May 20219
21 June 20218

How to join

Before joining, you must:

  • have your VAT registration number
  • create your own Government Gateway account (if you do not already have one)
  • submit any outstanding VAT returns from the last 4 years – otherwise you’ll not be able to join the scheme
  • correct errors on your VAT returns as soon as possible
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

To use the online service, you must:

  • join the scheme yourself, your agent cannot do this for you
  • still have deferred VAT to pay
  • be up to date with your VAT returns
  • join by 21 June 2021
  • pay the first instalment when you join
  • pay your instalments by Direct Debit (if you want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you)

Join the scheme now

See: Pay VAT deferred due to coronavirus (COVID-19) – GOV.UK (www.gov.uk)

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