Can VAT payment be deferred on W5 returns when releasing goods from bond, or must it be paid immediately?

The standard practice among members is to pay VAT on W5 returns when releasing goods from bond. However, one member recently encountered a distiller who was deferring VAT payment into their quarterly VAT return while still paying duty immediately on the W5.

**Current practice:** - Most bonded distilleries pay VAT on W5 returns immediately (not deferred) - Duty is typically not deferred either, as this keeps cashflow management simpler

**Potential alternatives:** - Some members speculate VAT deferment may be possible under a specific VAT payment plan agreed directly with HMRC, though this remains unclear - One member reported receiving confirmation from HMRC that VAT deferment on W5s is possible, though they noted this was "mind blowing" and unexpected

**Next steps:** Members recommend contacting HMRC directly to clarify the exact conditions under which VAT deferment is permitted on W5 releases, though the hold times are notoriously long. It may be worth asking whether the deferring distillery has a specific VAT payment arrangement in place that others could replicate.