The domestic reverse charge is a major change to the way VAT is collected in the building and construction industry and will affect both suppliers and…
Businesses who deferred VAT payments due to HMRC between 20 March 2020 and 30 June 2020 can opt into the new scheme between 23 February 2021 and 21 June 2021 or from March 2021 for businesses that operate the annual accounting scheme or make payments on account.
The Chancellor announced the new payment scheme in his Winter Economy Plan to allow businesses who were due to pay their deferred VAT liability by 31 March 2021 to spread the payment in up to 11 equal instalments to 31 March 2022.
Eligible businesses who wish to make use of this scheme will need to opt in via their Government Gateway accounts, in addition;
- The VAT that was due in the period from 20 March to 30 June 2020 should still be outstanding in full or part
- All VAT return submissions should be up to date
- The businesses must be able to pay the first instalment on joining the scheme
- Equal and consecutive monthly instalments by Direct Debit need to be set up
If a business is unable to set up a direct debit using the online service, then they should call HMRC’s Covid-19 helpline from 23 February 2021 to join the scheme.
Should you have any specific queries or require any further assistance please contact the VAT, Customs and Indirect Tax team at VATAdvice@pkf-francisclark.co.uk and a member of our team will contact you.