Repayment of UK VAT deferred due to coronavirus

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Background

UK VAT registered businesses who had a VAT payment due between 20 March 2020 and 30 June 2020 were allowed to defer the payment until a later date, without paying any interest or penalties. Subsequent VAT payments due after that period were due as normal, but businesses had until 31 March 2021 to pay the deferred amount without incurring interest or penalties.

Repayment options

HMRC announced a further VAT deferral payment scheme to help businesses repay the deferred VAT. Under the scheme, you could choose to pay your deferred VAT in equal instalments, interest free and choose the number of instalments that suits you, from 2 to 11.

Applications to join this scheme closed on 21 June 2021 and for those businesses who didn't join the scheme, any deferred VAT outstanding after 30 June 2021 will be treated as debt and may incur a penalty. Read more >

If you're struggling to pay your outstanding VAT debt, you should contact HMRC.

Recording your repayments in Sage 50cloud Accounts

You can record your deferred VAT repayment as a bank payment to your VAT liability nominal code. 

TIP: As you're paying a number of equal instalments, to save time you can set up a recurring entry. Read more >

1. In Sage 50cloud Accounts click Bank accounts, click the relevant bank account then click Bank payment.
2. Enter the payment details as follows:
   

   Bank	Date	N/C	Details	Net	T/C	Tax
   Your bank account	Date of payment	VAT Liability account, for example, 2202	VAT deferral repayment	Instalment amount	T9	0.00

3. Click Save, then click Close.