In 2020 over half a million businesses deferred VAT payments. Those businesses can now join the new online VAT Deferral New Payment Scheme to pay in smaller monthly instalments. Businesses will need to have originally deferred VAT payments between March and June 2020 under the VAT payment scheme to take advantage of the new programme .
Companies will need to opt-in to the Deferral New Payment Scheme via the online service that opened on the 23rd of February 2021 and closes on 21st June 2021. Speaking on the matter, the Financial Secretary to the Treasury, says, “The government has provided a package of support worth over £280 billion during the pandemic to help protect millions of jobs and businesses.” He goes on to say, “This now includes the VAT Deferral New Payment Scheme, which will help provide businesses with the breathing space they may need to manage their cashflows in the weeks and months ahead.”
The aim of the new scheme is to help protect millions of businesses and jobs. Due to the half a million businesses deferring VAT payments in 2020, so far, an estimated £34 billion has been injected into the economy in the UK. This new arrangement will continue to help the recovery of the economy. It will help those organisations who have been financially impacted by the pandemic to better manage their cash flow during a critical time.
Payments can start from March 2021 and companies are able to pay in installments, spreading payments between as little as 2 months and up to a maximum of 11 equal monthly instalments. As a further benefit, payments are interest-free. The earlier businesses opt-in, the more instalments available.