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HMRC offers online self-service VAT payment plan for certain businesses

Resources

HMRC offers online self-service VAT payment plan for certain businesses

This page was last updated on June 12, 2023

Introduced on 31 May 2023, HMRC is now permitting certain businesses to set up their VAT payment plan online if they owe less than £20,000 of VAT.

This is essentially a self-service ‘time-to-pay’ option which businesses can set up online. It has been introduced at a time when many businesses are experiencing delays getting through to HMRC.

Time-to-pay agreements/ payment plans are used by businesses if they cannot pay their VAT bill on time. The agreements/ plans have to be agreed with HMRC and enable the business to spread the VAT they owe in instalments. This new development enables some businesses to set up a plan themselves through a dedicated online platform.

Qualifying businesses

A VAT-registered business can set up its own VAT payment plan online if it:

has filed its latest VAT return
owes £20,000 or less
is within 28 days of the payment deadline
does not have any other payment plans or debts with HMRC and
plans to pay off its debt within the next six months.

Excluded businesses

Those businesses currently not eligible to use the new online service include those who:

use the VAT cash accounting or annual accounting schemes
make VAT payments on account.

These businesses still need to contact HMRC if they need to set up a payment plan.

Setting up the plan online

While this is a welcome development given recent HMRC delays, the tight 28 days payment deadline window is likely to be an issue for many businesses looking to benefit from using the service.

If you do qualify for the new online VAT payment plan and wish to use it, you will need:

the relevant reference number for the tax you cannot pay, such as your unique tax reference number
your bank account details
details of any previous payments you’ve missed.

The payment plan portal and more information can be found via https://www.gov.uk/difficulties-paying-hmrc/pay-in-instalments

Can we help?

If you need advice regarding your VAT liabilities and payments to HMRC, contact one of our VAT specialists shown on this page.

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary.

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