HMRC Introduces Online Payment Plans for VAT-Registered Businesses
13/06/2023

HMRC has recently announced a convenient solution for VAT-registered businesses who owe less than £20,000 in unpaid VAT. Starting from 31 May 2023, these businesses can set up a payment plan online, referred to as time to pay agreements, with the condition of paying off the VAT within six months.

This initiative is part of HMRC's ongoing efforts to digitalize tax reporting and payment systems, aimed at reducing the need for direct interaction with HMRC advisers.

By allowing customers to establish online payment arrangements, HMRC aims to streamline the process, saving both time and resources for their Debt Management Operations. However, it's important to note that this service is not available for businesses using the VAT cash accounting or annual accounting schemes, or those making VAT payments on account.

To qualify for the VAT payment plan, eligible VAT-registered businesses must meet the following criteria:

1. Have filed their latest VAT return.
2. Owe £20,000 or less in unpaid VAT.
3. Have a bill due within 28 days of the payment deadline.
4. Do not have any other payment plans or outstanding debts with HMRC.
5. Intend to settle the debt within a six-month timeframe.

Sole traders, directors, landlords, partnerships, IR35 personal service companies, farmers, haulage companies, and international companies are among those who can benefit from this self-serve time to pay service.

For businesses that do not meet the eligibility requirements, they will need to contact HMRC through the usual channels to negotiate alternative payment terms.

This new online payment plan service introduced by HMRC offers VAT-registered businesses a convenient and efficient way to manage their outstanding VAT amounts. By utilizing the Government Gateway, eligible businesses can easily set up a payment plan and fulfill their VAT obligations within the specified time frame.