As the world begins to open up a little more, the schemes put in place to support businesses are starting to come to a close.
Any business that deferred VAT in the wake of the coronavirus pandemic must act before 30 June 2021.
What is the VAT deferral scheme?
In a bid to help businesses with cash flow, VAT-registered businesses could defer VAT payments that were due between 20 March and 30 June 2020.
The liability that arose could initially be deferred to 31 March 2021, but in September 2020 the government announced they were giving businesses until 30 June 2021 to repay, a deadline which is only weeks away.
What options are available?
Cashflow for many businesses may still be lacking due to extended lockdowns. For that reason, there are two options available. Either pay the deferred VAT liability in full by 30 June 2021 or arrange a payment plan by the same date.
The new online VAT Deferral New Payment Scheme, which launched in February, enables businesses to spread out the repayment of their deferred VAT liability over eight to 10 monthly interest-free instalments, depending on when they apply. Those businesses applying this month will only have the 8-month option given to them.
If you would like to take advantage of the payment plan, click this link.
All you need is your VAT registration number and Government Gateway ID handy.
Is there a penalty if the deadline is missed?
Yes. HMRC have confirmed that businesses could be fined up to five per cent of their total VAT liability if they do not register or pay in full by 30 June 2021.
If you are unsure how to register or want some extra advice regarding your cashflow please call us on 01482 888820.