VAT Deferral 

Last year HMRC allowed VAT payments to be deferred that would have been due for payment between 20 March 2020 and 30 June 2020. If you still have payments to make in relation to this then there is now the option available to join a new scheme which allows the outstanding balance to be paid in instalments between now and March 2022.

The new scheme is not automatic, you must sign up to it if you want to make monthly payments to clear the remaining balance. You may be charged interest or a penalty if you do not:

  • pay the deferred VAT in full by 31 March 2021
  • opt into the new payment scheme by 21 June 2021
  • agree extra help to pay with HMRC by 30 June 2021

The VAT deferral new payment scheme opened on 23 February 2021 up to and will remain open to join until 21 June 2021. If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you can join the scheme from 10 March 2021.

The new scheme lets you pay your deferred VAT in equal instalments and interest free. You can choose the number of instalments, from between 2 and 11 instalments. There are monthly deadlines for joining the scheme to allow for the direct debit payment to be set up for that month's payment.

You join the scheme on your HMRC portal, agents are not able to do this on your behalf but we can talk you through it if you need help. You must be up to date with your VAT returns to be able to join the scheme.

If you’re not able to pay your deferred VAT and need more time, it may be possible to put in place a time to pay arrangement with HMRC. You must agree this with HMRC by 30 June to avoid interest and penalties on the debt.

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Advice and Support

Please visit the new Business Support Hub for advice or contact a member from our team on 0808 144 5575 or email