February 24, 2021: Wheelers Words

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February 24, 2021 : VAT Referral Payment Scheme, Bounce Back Loans and upcoming Budget

VAT Deferral Payment Scheme

If you deferred your VAT payments due between 20 March 2020 and 30 June 2020 you can pay now or join the VAT deferral new payment scheme. You have the following options:

  • pay the deferred VAT in full, on or before 31 March 2021
  • join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
  • contact HMRC on Telephone: 0800 024 1222 by 30 June 2021 if you need extra help to pay

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

If you wish to pay your VAT in full by 31 March 2021, you can find the details of how to pay on the link below (please note your VAT registration number should be used as the reference number when making payment): https://www.gov.uk/pay-vat

Alternatively, you can opt into the VAT deferral new payment scheme. 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)

The month you decide to join the scheme will determine the maximum number of instalments that are available to you. If you join the scheme in March, you’ll be able to pay your deferred VAT in 11 instalments or fewer.

The table below 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 by: Number of Instalments available to you:
March 19, 2021 11
April 21, 2021 10
May 19, 2021 9
June 21, 2021 8

 

In order to join this scheme you will need to use your Government Gateway account and follow the steps to set this up. If you do not have a Government Gateway account you can set one up. You will also need to ensure you have the amount deferred to hand and will need to ensure that any outstanding VAT returns from the last 4 years have been submitted. Please note, we are unable to set this up as agent. If you wish to join this scheme, please open the link below and press ‘join the scheme now’, you will then be prompted to sign in to your Government Gateway account or set one up:

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

If you are unable to use the online service you can contact the HMRC Coronavirus Helpline on 0800 024 1222.

If you’re on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, you’ll be invited to join the new payment scheme later in March 2021.

Bounce Back Loans

Bounce Back Loan borrowers will now have the option to tailor payments according to their individual circumstances with the option to delay all repayments for a further six months.

Originally the length of the loans was 6 years, with the option to repay early without paying a fee, and no repayments were due during the first 12 months.

The Chancellor has recently announced greater flexibility with respect to these loans. These options include:

  • extend the term of your loan to 10 years
  • move to interest-only repayments for a period of 6 months (you can use this option up to 3 times)
  • pause your repayments for a period of 6 months (you can use this option once)

Before your first repayment is due, your lender should contact you to discuss the options available to you.

This will mean that businesses can choose to make no payments on their loans until 18 months after they originally took them out. 

Budget 

The government will publish the Budget on Wednesday 3 March 2021 and we will update you as soon as we can.