The VAT Deferral New Payment Scheme is now open for businesses that deferred their VAT liabilities that were originally due for payment between 20 March and 30 June 2020. 

The deferred VAT was originally due to be paid on or before 31 March 2021 but businesses that opt into the VAT Deferral New Payment Scheme can pay the outstanding amounts by direct debit over a period up to 11 months.

To avoid interest and penalties being imposed businesses must either:

• Pay all of the deferred VAT by 31 March 2021

          You can pay the deferred VAT in any of the normal ways.  Further details can be found here.

• Opt into the VAT Deferral New Payment Scheme

 
         The online service for opting in went live on 23 February 2021 and will remain open until 21 June 2021.  The first instalment will           be due when you opt in and you can decide on the maximum number of monthly instalments based on when you opt in as                   follows:

HMRC have announced that Self-Assessment taxpayers will not be charged the 5% late payment penalty if the 2019/20 tax is paid or a payment plan is arranged by 1 April 2021.

The payment deadline for Self-Assessment was 31 January 2021 and interest is charged from 1 February 2021 on any amounts outstanding.  The 5% late payment penalty would normally be charged on any unpaid tax that is still outstanding on 3 March 2021 however, because of the impact of the Covid-19 pandemic HMRC are giving taxpayers more time to pay or set up a payment plan.
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Taxpayers can pay their tax bill or set up a monthly payment plan via their Government Gateway account.  The online Time to Pay facility allows taxpayers to spread the cost of their Self-Assessment tax bill into monthly instalments until January 2022.  If you are unable to set up a payment plan online, you can contact HMRC by telephone on 0300 200 3822.

As announced in November 2020, if you already have a Bounce Back Loan and originally borrowed less than the maximum amount available to you, you may be apple to apply for a top up.
 
As a reminder the maximum that can be borrowed with Bounce Back Loan facility is 25% of a business’ turnover (as declared in the original application) with a cap on the loan of £50,000.  
 
Top Up Features

• One top-up per borrower from their existing lender;
• Minimum top up amount of £1,000;
• The capital repayment holiday runs for 12 months from the initial drawdown date on the original Bounce Back Loan.  For            example, if the initial drawdown date of the original Bounce Back Loan was on 1 June 2020, and the drawdown date of the        top-up was on 1 February 2021, the capital repayment holiday period will run to 31 May 2021.

 
How to apply for a Top Up
Please contact your Bounce Back Loan provider to apply for a top up.

Originally announced in September 2020, Pay As You Grow will enable businesses greater flexibility in repaying their Bounce Back Loans. The Chancellor has recently provided further details on this flexibility.
 
Pay As You Grow will enable businesses who have started repaying their Bounce Back Loans to:
 

• request an extension of their loan term to ten years from six years, at the same fixed interest rate of 2.5%;
• reduce their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan.
• take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.

 
Borrowers can use these options individually or in combination with each other.
 
Borrowers should be aware that they will pay more interest overall if they use one or more of these options, and that the length of the loan will increase in line with any repayment holidays taken.
 
How to access Pay As You Grow
Pay as You Grow is available to those with a Bounce Back Loan and your lender should contact you three months before your repayments commence to discuss the options available under Pay As You Grow.
 
Note – Pay As You Grow does not apply to CBILS.

The deadline for applications for the Government’s three Coronavirus business interruption loan schemes - the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS) is 31 March 2021.
 
If you think you may need to utilise any of these schemes, we recommend taking action now so you have the best chance of completing your application by the deadline.
 
Ashgates has assisted several clients with successful applications so far and can assist you in this process. If you require advice or assistance, please contact us.
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HMRC have announced additional details of arrangements for further deferring the VAT that was originally due for payment between 20 March and 30 June 2020. 
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The deferred VAT was originally due to be paid on or before 31 March 2021 but businesses that opt into the VAT Deferral New Payment Scheme can pay the outstanding amounts by direct debit over a period up to 11 months.

To avoid interest and penalties being imposed businesses must either:

• Pay all of the deferred VAT by 31 March 2021

           You can pay the deferred VAT in any of the normal ways. Further details can be found here

• Opt into the VAT Deferral New Payment Scheme

           The online service for opting in will go live on 23 February 2021 and remain open until 21 June 2021. The first instalment will               be due when you opt in and you can decide on the maximum number of monthly instalments based on when you opt in as                   follows:

​        You must use the online service yourself through the Government Gateway account (we will not be able to do this for you) and             you should not have any outstanding VAT Returns for the last four years. 
 
        Businesses making VAT payments on account or using the annual accounting scheme will need to wait to be invited to use the            scheme which is expected later in March 2021.

If you are unable to make payment by 31 March 2021 or join the VAT Deferral New Payment Scheme then you should contact HMRC on 0800 0241222 to discuss making alternative arrangements.
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We are here to help, so if you have any queries or wish to discuss the above then please contact us.