Businesses who deferred VAT due from 20 March to 30 June 2020 will have the option to pay this in smaller payments over a longer period instead of paying the full deferred amount by the end of March 2021 as previously required. However, if a business is able to pay the amount deferred by 31 March 2021, it is encouraged to do so.

The deferral takes the form of 11 smaller monthly interest free payments which must be paid by the end of March 2022. Those who wish to do so will need to opt-in to the scheme which will require a direct debit to be set up as part of the digital opt-in process. Under banking regulation, this must be done by the authorised bank account holder.

As advised previously by this Institute, HMRC is therefore unable to provide an agent service for the scheme. The guidance in this area has also been updated.