Quick Picks: The Extension of VAT Repayment Terms

As a result of the second wave of coronavirus there has been a generous change to the terms for paying deferred VAT from early 2020.

It was announced on the 24th September 2020 by Chancellor Rishi Sunak that businesses who had used the incentive of VAT deferral from earlier on in 2020 were no longer obligated to pay the full deferred amount back by the 31st of March 2021 deadline. Alternatively there is an option of paying this back with interest free instalments which allows payments to be spread over 11 months.

This scheme of VAT deferral has an affect on payments that were due to be paid between 20 March 2020 and 30 June 2020. To begin with the deferred amount was meant to be made good by 31st March 2021. Therefore, if your business had made use of this scheme it may be wise to consider if you benefit from this new interest free instalment option.