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Sage 200 - Repayment of UK VAT deferred due to coronavirus

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Summary

To support businesses with their cash flow during the Coronavirus outbreak, UK businesses were allowed to defer VAT payments which were due between 20 March and 30 June 2020. If you deferred your VAT payments and you still have payments due, HMRC have announced a new repayment scheme to help you pay the VAT and avoid interest and penalties. This article supports the processing in the Sage 200 Standard/Education and Professional software.

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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 have 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 200

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

  1. In Sage 200 Standard/Education: Cash Book > Enter Transactions > Nominal Non-Vatable Payment.
    Sage 200 Professional: Cash Book > Payments and Receipts > Nominal > Nominal Non-Vatable Payment.
  2. Select the bank account you are paying from, enter a cheque number and 2nd reference if applicable.
  3. Enter the Transaction date as the date of payment
  4. Enter the Narrative as VAT deferral repayment.
  5. In the Nominal Transactions section:
    Code CC Dept Narrative Transaction Analysis Trans. Date Gross Value
    VAT Liability account, for example, 2202 Enter if applicable Enter if applicable VAT deferral repayment Enter if using Date of Payment Instalment amount
  6. Click Save, then click Close.
Additional questions you may have

To help support you, we've put together a handy coronavirus UK VAT deferral FAQs guide.

This article offers general guidance only. While accurate at the time of publication, it may not suit your specific needs. We make no express or implied warranties. For tailored advice, consult a professional. For VAT, customs, or duties queries, contact HMRC on 0300 200 3700 or visit www.hmrc.gov.uk. We accept no liability for any loss from using this content. VAT or tax codes shown reflect default software settings and may differ in your setup.