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.
The revised version of FRS 102 accounting standards has already brought new reforms for accounting periods starting on or after 1 January 2026 and now the rules are changing again. The Financial Reporting Council (FRC) has announced further amendments to FRS 102 and FRS 105, affecting how certain businesses present their financial statements. With the changes taking effect over the next two years, now is the time to understand what is coming and how it could affect you. Why are the FRS 102 rules changing again? The updates follow the introduction of IFRS 18, which replaces IAS 1 on the presentation of financial statements. To ensure they are aligned with international accounting standards, the FRC has introduced amendments to UK GAAP. However, after consultation, it stopped short of adopting the full IFRS 18 model. What are the new FRS 102 changes? The latest amendments apply to entities using updated Companies Act formats. They include: · Revised presentation requirements for businesses applying adapted balance sheet and profit and loss formats · Moving presentation requirements into new appendices within Sections 4 and 5 · Updated definitions of current assets, non-current assets and current liabilities, plus additional application guidance These changes are taking effect for accounting periods beginning on or after 1 January 2027. Alongside this, earlier reforms came into force from 1 January 2026 and changed revenue recognition and lease accounting. Revenue must now follow a five-step control-based model and businesses must reassess customer contracts. Most leases must also now be recognised on the balance sheet as a right-of-use asset with a corresponding lease liability. Instead of a single lease expense, businesses will record depreciation and interest separately. How can you prepare? To prepare for the current FRS 102 changes, you should now be reviewing contracts and lease liabilities and ensuring you have the correct presentation formats. If you are unsure how the new FRS 102 rules will affect your business, now is the time to seek professional advice. For further support, contact our team today.
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