Deferred VAT Payment Update for E-commerce Entrepreneurs

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The Deferred VAT Payment scheme was part of the initial wave of support measures announced by the government last year in regards to the COVID pandemic. Now, the deadline for payment is approaching. If you used the scheme, here is what you need to know.

The Deferred VAT Payment scheme gave e-commerce business owners a bit of breathing room during the early days of the pandemic. If you took advantage of the scheme and are now in a position to pay, you should do so or sign up for the new deferred payment scheme to avoid penalty.

What is the Deferred VAT Payment Scheme?

Under the scheme, business owners could defer VAT payments due between 20th of March and 30th of June 2020. Payments were frozen with no interest or penalty applied. The scheme will come to an end on 31st of March. Those who do not follow one of the following options will be subject to interest and charges.

Paying your Deferred VAT

With e-commerce thriving under lockdown restrictions, you may now be in a position to make your deferred VAT payments. You can clear your full balance on the HMRC website.

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If you are unable to pay the full amount due, you should consider the below option.

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VAT Deferral New Payment Scheme

If it is not an option to clear your deferred tax payments, the new payment scheme (launched 23rd February) will allow monthly payments.

You can spread your payments across 2-11 equal monthly amounts. There is no interest charge. Payments can start from this month, and you will need to do so if you wish to take advantage of the full 11 months.

The scheme will close online on the 21st of June, 2021.

Deferred VAT payment schedule








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Additional assistance

If you are unable to make your deferred VAT payments in full, or through the monthly instalment plan, you must contact HMRC as soon as possible to discuss options. The longer you leave it, the fewer options will be available to you. We do, however, highly recommend you discuss your payment issues with your accountant before you call HMRC.

To gain extra assistance with your VAT payments, you should call HMRC on 0800 024 1222 by 30th June 2021.

What you will need to apply

Whether you are joining the deferred VAT payment scheme or seeking additional help from HMRC, you will need your Government Gateway ID:

You will also need clear calculations showing what you can pay or why you can’t. Your accountant will be able to tell you if you can apply for any further grants or assistance that may help you clear your bill.

Next Steps

E-commerce tax is a complicated area at the best of times. Throw in deferred VAT payments and you may be wondering what to do. If you would like assistance with your VAT, whether you are up to date or not, we will be happy to help you. You can check out our VAT guidance here and then get in touch with us to get things moving.

The best time to act is now.

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