HMRC has updated the guidance on how to register for the online service to further defer VAT due between 20 March 2020 and 30 June 2020. If a business wants to join the new deferral scheme, this opened from 23 February 2021 and will close on 21 June 2021. If your business is on either the VAT Annual Accounting Scheme or the Payment on Account Scheme, an invite to join the new payment scheme will be issued in late March 2021.

The new deferral scheme lets you:

• pay your deferred VAT in equal instalments, interest free; and
• choose the number of instalments, from 2 to 11 (depending on when you join).

To use the online service, you must:

• join the scheme yourself, your agent cannot do this for you (we understand this is due to banking regulations as the scheme requires direct debits to be set up);
• still have deferred VAT to pay;
• be up to date with your VAT returns;
• join by 21 June 2021;
• pay the first instalment when you join; and
• pay your instalments by Direct Debit (if want to use the scheme but cannot pay by Direct Debit, there’s an alternative entry route for you).

If you join the scheme, you can still have a Time to Pay arrangement for other HMRC debts and outstanding tax.

The month of joining the scheme will determine the maximum number of instalments that are available. If you join the scheme in March 2021, you’ll be able to pay your deferred VAT in 11 instalments or fewer (if you so choose).

The table below sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):