A new VAT deferral scheme is due to open, providing another payment option for those that deferred VAT between 20 March and 30 June 2020 and still have payments to make.

Options for VAT deferral payments

Details of the new payment deferral scheme

  • VAT can be paid in monthly instalments, interest free; and
  • Payments can be in instalments of between two and eleven equal monthly amounts.


Users of the deferral scheme must

  • Still have deferred VAT to pay;
  • Be up to date with VAT returns; and
  • Be able to pay the deferred VAT by Direct Debit.

How to opt into the scheme

The scheme will be available to opt into online early this year. This page will be updated with details as soon as they become available.

Prior to opting into the scheme, users must

  • Have their own Government Gateway account;
  • Submit any outstanding VAT returns from the last four years;
  • Correct errors on VAT returns as soon as possible – see below for further details;
  • Understand how much VAT is owed, including the amount originally deferred, and how much has already been paid; and
  • If a VAT payment can be made, this should be done so as soon as possible to enable the correct amount to show on the deferred balance.

Correcting errors on VAT returns, relating to the VAT deferral scheme

If there are errors on a VAT return relating to a period covered by the new deferral scheme, the following action must be taken:

Fill in form VAT652

Send it to the VAT Error Correction Team

Error correction payments can be included in a deferred VAT balance after:

  • HMRC have processed the error correction; and
  • A Statement of Account has been received confirming the balance.

Contact the HMRC Covid-19 helpline, by 29 January 2021 to include extra payments in the deferral payment scheme resulting from confirmed error corrections or a HMRC VAT assessment. 

It may not be possible to include error correction payments if a Statement of Account is not received by 29 January 2021. Extra payments cannot be included in the deferral payment scheme once it has been opted into.

HMRC may be in contact if extra VAT payments are due for the period, the helpline should also be used to defer these payments.

Error correction payments can then be paid in full by 31 March 2021 or included in the payments when opting into the VAT deferral payment scheme.

Click here to find out what actions to take if a tax bill still cannot be paid on time.