VAT Deferral New Payment Scheme goes live
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HM Revenue & Customs (HMRC) has announced that its online VAT Deferral New Payment Scheme is now open for applications to help businesses arrange smaller monthly repayments of deferred VAT.
Under the New Payment Scheme, you can repay VAT deferred between 20 March and 30 June 2020 in up to 11 instalments from March 2021 (the length of repayment and number of instalments will depend on when you join).
To use the online service, you must:
- Join the scheme yourself – agents cannot directly assist you;
- Have deferred VAT to pay;
- Be up to date with VAT return filings for the last four years;
- Correct any errors on VAT returns, as soon as possible;
- Make sure you know how much VAT you owe;
- Pay the first instalment when you join; and
- Pay instalments by Direct Debit (there are alternative payment methods of payment on request).
If you intend to use this scheme, you will need to opt-in online between 23 February and 21 June 2021.
Click here to join the scheme today
Businesses can also repay their deferred VAT in full by 31 March 2021 or agree extra help to pay with HMRC by calling 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 by 31 March, opt-in to the VAT Deferral New Payment Scheme or seek additional help to repay deferred VAT by the deadlines outlined above.
If a business decides to use the New Payment Scheme it will not affect its ability to request a Time to Pay arrangement from HMRC in future.
Although agents, such as accountants, can’t join the scheme on your behalf, our team can help you get your VAT affairs in order and figure out how much VAT you may owe. To find out more, please contact us.
Do you know what your Personal Savings Allowance is? While most taxpayers in the UK will know the thresholds for Income Tax, a worrying few know the way in which personal savings can be subject to tax. With ISAs set for a significant overhaul, understanding the less tax-efficient saving options will soon be more important. How much tax do you pay on your savings? While your savings are not taxed, any interest generated by those savings could be subject to tax if it exceeds your Personal Savings Allowance. Depending on the rate of Income Tax you pay, your Personal Savings Allowance will differ. The thresholds are: £1,000 for Basic-rate taxpayers £500 for Higher-rate taxpayers £0 for Additional-rate taxpayers ISAs remain the more tax-efficient saving strategy as the interest generated from them is tax-free. It is therefore most effective to utilise the full £20,000 saving limit for an ISA as early in the tax year as possible to benefit the most from the accumulation of interest. How should tax on savings be managed? The main issue is that tax on savings is often overlooked, resulting in HMRC taking action for underpaid taxes. This will often manifest in a charge through PAYE, as employees are more likely to overlook this obligation. Those filing Self Assessment tax returns should already be declaring interest earned, so any compliance issue in that group points to a wider problem with handling tax obligations. When attempting to make the most of saving strategies, it is best to seek professional financial advice. This will be more important if the saving limit for Cash ISAs falls to £12,000 for under-65s in 2027 as proposed, leaving younger savers to have to find new ways to grow their wealth. Our professional team can help you to determine an effective saving strategy that suits your financial goals while helping you to be mindful of the tax obligations that you may face. We do not want to see anyone caught off-guard by an unexpected tax bill and understanding your exposure is vital for preventing this. Get in touch with our team to regain confidence in your saving strategy.
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