As the Covid-19 pandemic unfolded last year, so did the various support packages from the Government. These were created to make sure as many businesses as possible made it through the unprecedented (we’ve not heard that word for a while!) and uncertain events happening.
A year on and we are still feeling the impact of the virus, with the Government starting to remove some of the financial safeguards put in place and rolling out the systems and processes to follow up the initial support packages.
For any business that deferred VAT due between 20th March 2020 and 30th June 2020 and were unable to pay their VAT in full by 31st March 2021, the HMRC are now calling them in!
These payments are due to be with HRMC by 30th June 2021. However if you are still experiencing financial difficulties the new VAT deferral payment scheme is now open to provide support.
This new payment scheme will allow affected businesses to spread their VAT payments across 8 months, instead of having to pay it all in one lump sum.
As so many businesses are still operating under strict restrictions and not able to return to pre-Covid profits this could be a lifeline for cashflow.
However, businesses only have until 21st June to sign up for the scheme!
It’s simple process that you can complete on-line and doesn’t require you to call and speak with the HRMC. Apply here.
Before starting your application, make sure you have the following:
- Your VAT registration number
- Your Government Gateway account details
- Any outstanding VAT returns from the last 4 years have been submitted without any errors – otherwise you won’t be able to join the scheme
- Make sure you know how much is owed, including the amount originally deferred and how much you may have already paid
By signing up the new payment scheme, struggling businesses will be able to avoid the 5% penalty and interest they may incur if they do not either pay in full by the 30th June or sign up to the new payment scheme online, by 21st June 2021.
It’s going to be a long road to recovery for many businesses, especially with the recent extension in Covid restrictions, however we’ll endeavour to keep you up to date on all the support and schemes available to help get your business through.
If you have any questions about your VAT or the new payment scheme, please don’t hesitate to get in touch with us or you find out more and make your application here.