The VAT deferral scheme ended on 30th June this year. In September the chancellor Rishi Sunak confirmed that businesses who opted to defer their VAT between March 2020 and June 2020 will now be able to pay the amount in instalments over a longer period of time.
Originally businesses who took advantage of the VAT deferral scheme were due to pay their deferred VAT by March 2021 in full. You now have the opportunity to spread the amount of VAT deferred over the following 12 months interest free. This only applies to VAT which was deferred between March 2020 and June 2020. VAT payments after June 2020 must still be paid.
Those who wish to pay the full amount by March 2021 can still do so, but the opportunity to spread the cost is available to everyone who made use of the VAT deferral scheme.
To take advantage of the interest free instalments you must;
- Set up a direct debit
- Continue to submit VAT returns
- Pay the VAT in full on payments due after June 2020
You should process your VAT return in the normal way in Sage 50.
If you need help with understanding tax codes in Sage, download our handy guide here
Did you know?
We are offering free weekly Sage 50 Accounts Masterclasses until the end of December 2020, to support businesses through these difficult times. The Masterclasses have been running since July and if you sign up you can get access to all previous recordings. Sign up here
To help you expand your learning, we are also providing free E-learning courses until the end of December:
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