The VAT Deferral New Payment Scheme
Any business that deferred VAT payments due between 20 March and 30 June 2020 as a result of the Coronavirus pandemic, must now consider how they will repay this outstanding tax.
The VDNPS will remain open between 23 February and 21 June 2021 and will provide businesses with the option to pay deferred VAT in equal interest-free instalments.
They can choose from the following options in order to do this:
- Pay the deferred VAT in full by 31 March 2021;
- Join the VAT Deferral New Payment Scheme (VDNPS); or
- Contact HM Revenue & Customs (HMRC) to agree extra help to pay by 30 June 2021.
The VDNPS will remain open between 23 February and 21 June 2021 and will provide businesses with the option to pay deferred VAT in equal interest-free instalments.
Taxpayers will be given the option to make between two and 11 instalments to suit their needs (the length of repayment may depend on when a business joins the scheme).
Businesses that are already on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, will be invited to join the VDNPS in March.
Other businesses wishing to use the scheme will need to apply online. To use the online service, they must:
- Join the scheme themselves – agents cannot directly assist them;
- Still have deferred VAT to pay;
- Be up to date with their VAT return filings;
- Pay the first instalment when they join; and
- Pay instalments by Direct Debit (there are alternative payment methods for those without access to Direct Debit on request).
Before joining, businesses must:
- Obtain a Government Gateway account – if they do not already have one;
- Submit any outstanding VAT returns from the last four years;
- Correct any errors on VAT returns as soon as possible; and
- Make sure they know how much they owe, including the amount originally deferred and how much you may have already paid.
If a business decides to opt-in to the New Payment Scheme it will not affect its ability to request a Time to Pay arrangement from HMRC for other debts and outstanding tax payments in future.
Businesses who are unable to use the scheme or that need extra help repaying deferred tax must call HMRC on 0800 024 1222 by 30 June 2021.
Businesses may be charged interest or a penalty if they do not pay the deferred VAT in full, opt-in to the VDNPS or seek additional help to repay deferred VAT by the deadlines outlined above.
Discover accountant costs in Northampton, what affects fees and what accounting packages include. Contact 10CA for a tailored quote.
The 12 months since the last Budget was delivered have seen significant change. A more challenging global macroeconomic outlook, yet more inflationary pressures...
According to the latest Hiscox Cyber Readiness Report, almost two in five small businesses in the UK suffered a successful cyber-attack in the last year, with each attack costing an average of £26,650. Globally, cyber incidents cause around 32 hours of operational disruption a year on average. Cyber-attacks are no longer exceptional events, being viewed more as recurring costs, so businesses must prepare themselves financially for the impact. How should you prepare your finances in advance of a cyber-attack? A cyber-attack is slowly and sadly becoming a reality for many SME owners across the UK. To prepare, business owners should assess the potential financial risk a cyber-attack poses and forecast cash flow to ensure their business can survive one. It could also be beneficial to value your data assets to estimate the worth of any lost revenue and recovery expenses. Business owners may also want to keep offline playbooks. These are secure, printed offline copies of critical financial contacts, account numbers and recovery protocols to ensure that your business has key information in the event of a cyber-attack. Additionally, your business should establish strict double-check procedures for unusual payment requests or changes to supplier details to prevent business email compromise. You should also factor cyber insurance premiums into your operational risk management to ensure that you are prepared for any eventuality. What should you do to get your finances back in check after a cyber-attack? Should the worst-case scenario happen, once you are back on track, the first thing you should do is speak with your accountant. Your accountant will help you to calculate the exact monetary value of damaged assets, lost revenue and stolen money so that you know exactly where your business stands. They will then review your financial data and your tax records to establish a baseline for recovery and determine if the business can continue or if restructuring is necessary. Accountants can also help during complex cyber insurance claims by submitting the required evidence to ensure fair financial assessments of the business interruption costs. Once you have received any insurance payments, an accountant can advise on the tax implications. How can we help? Cyber-attacks are becoming more prevalent for businesses up and down the UK. That is why it is imperative that you receive advice on how you can best prepare your finances in a worst-case scenario. Our team of accountants can help you to prepare your business for a cyber-attack and in the event of a cyber-attack, we can help you pick up the financial pieces. Get in touch with our team for support with preparing your business for a cyber-attack.