VAT payment deferral scheme extended but dealers need to sign up by June 21 to avoid being caught out

Time 3 months ago

Car dealers who have taken advantage of the VAT payment deferral scheme are being reminded about when they need to settle up.

The time limit for repayment was due to end on March 31 but a new scheme allowing further deferral has been launched, taking the eligibility deadline to June 21.

Michelle Malone, tax director at dealer profitability experts ASE Global, said: ‘Depending on when you join the scheme you will have the option to spread your payments between two and 11 instalments and this will be interest-free.’


Applications to join the VAT deferral new payment scheme can be made from February 23 and the first instalment has to be paid when dealers join the scheme, with the remainder preferably made via direct debit.

An alternative payment method will be available for dealers unable to pay by direct debit.

To use the online service, dealers must also join the scheme themselves, still have outstanding VAT to pay, be up to date with their VAT returns and join it by June 21.

Full details of how the VAT deferral scheme is operating are on the website.


Dealers who are in the VAT payment-on-account regime will have the deferral scheme made available to them towards the end of March.

Payments can still be made in full by March 31 but dealers may be charged interest or a penalty if they don’t pay the deferred amount in full by then or opt into the new payment scheme by June 21 or agree extra help with HMRC to pay by June 30.

A poll of UK business managers has also shown that the vast majority of business managers want the end of the temporary VAT cut from 20 per cent to five per cent on hospitality and tourism extended from March 31.

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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