THE Government provided VAT registered businesses with cashflow help during the first lockdown by offering to defer their VAT liability arising between March 20 and June 30, 2020.

This deferment ends very soon and HMRC will expect full payment by March 31, 2021.

However, if your business is still having difficulty in paying that VAT liability, HMRC have introduced a new online scheme to help.

To access this online service business owners must join the scheme themselves; they cannot ask their accountant to do so on their behalf.

The new VAT payment scheme will be open between 23 February and 21 June 2021 and when your business has been accepted the scheme allows you to pay deferred VAT in equal instalments, interest free.

The month you join will determine the maximum number of instalments, from 11 if you join by 19 March 2021 reducing to 8 by 21 June 2021.

The first payment must be made when you join and subsequent instalments by Direct Debit.

If you cannot pay by Direct Debit, there is an alternative entry route which you can use.

To be eligible for the scheme you must be up to date with your VAT returns for the last 4 years when you apply and make sure that you know how much you owe.

If you join the new payment scheme you can still access HMRC`s Time to Pay arrangements to help you spread the cost of other taxation liabilities such as income tax.

if there are circumstances which prevent you using the online service you can contact the COVID-19 helpline when the scheme opens on Telephone: 0800 024 1222.

If you do not pay by March 31, join the new scheme, or agree extra help directly with HMRC you may be charged interest or a penalty.

For further advice or information contact Nigel Clemit, at accountants and business advisers JWP Creers LLP in York by phoning 01904 717260 or visit www.jwpcreers.co.uk